II 

118TH CONGRESS 

2D SESSION S. 4943 

To amend the Electronic Fund Transfer Act to treat fraudulently induced 

electronic fund transfers in the same manner as unauthorized electronic 

fund transfers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2024 

Mr. BLUMENTHAL (for himself and Ms. WARREN) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

To amend the Electronic Fund Transfer Act to treat fraudulently induced electronic fund transfers in the same manner as unauthorized electronic fund transfers, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting Consumers 

5 From Payment Scams Act’’. 


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1 SEC. 2. TREATMENT OF FRAUDULENTLY INDUCED ELEC2 TRONIC FUND TRANSFERS. 

3 (a) DEFINITIONS.—Section 903 of the Electronic 

4 Fund Transfer Act (15 U.S.C. 1693a) is amended— 

5 (1) in paragraph (7)— 

6 (A) by striking subparagraphs (B) and 

7 (E); 

8 (B) by redesignating subparagraphs (C) 

9 and (D) as subparagraphs (B) and (C), respec10 tively; 

11 (C) in subparagraph (B), as so redesig12 nated, by adding ‘‘or’’ at the end; and 

13 (D) in subparagraph (C), as so redesig14 nated, by striking ‘‘or’’ at the end; 

15 (2) by striking paragraph (9) and inserting the 

16 following: 

17 ‘‘(9) the term ‘financial institution’ means— 

18 ‘‘(A) a State or National bank, a State or 

19 Federal savings and loan association, a mutual 

20 savings bank, a State or Federal credit union, 

21 or any other person who, directly or indirectly, 

22 holds an account belonging to a consumer; or 

23 ‘‘(B) any person that— 

24 ‘‘(i) issues an accepted card or other 

25 means of access or provides other means to 

26 facilitate an electronic fund transfer; and 


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1 ‘‘(ii) agrees, directly or indirectly, 

2 with a consumer to provide electronic fund 

3 transfer services;’’; and 

4 (3) by striking paragraph (12) and inserting 

5 the following: 

6 ‘‘(12) the term ‘unauthorized or fraudulently 

7 induced electronic fund transfer’— 

8 ‘‘(A) means an electronic fund transfer 

9 from a consumer’s account initiated by— 

10 ‘‘(i) a person other than the consumer 

11 without actual authority to initiate such 

12 transfer; or 

13 ‘‘(ii) the consumer, if the consumer’s 

14 authorization or initiation of the electronic 

15 fund transfer was fraudulently induced; 

16 and 

17 ‘‘(B) does not include any electronic fund 

18 transfer— 

19 ‘‘(i) initiated by a natural person 

20 other than the consumer who was fur21 nished with the card, code, or other means 

22 of access to such consumer’s account by 

23 such consumer, unless— 

24 ‘‘(I) the consumer has notified 

25 the financial institution involved that 


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1 transfers by such other person are no 

2 longer authorized; or 

3 ‘‘(II) the consumer was fraudu4 lently or coercively induced to furnish 

5 the card, code, or other means of ac6 cess; 

7 ‘‘(ii) initiated by a consumer who has 

8 fraudulent intent, or anyone acting in con9 cert with such a consumer; or 

10 ‘‘(iii) which constitutes an error com11 mitted by a financial institution.’’. 

12 (b) DEFINITION OF ERROR.—Section 908(f) of the 

13 Electronic Fund Transfer Act (15 U.S.C. 1693f(f)) is 

14 amended— 

15 (1) in paragraph (2), by inserting ‘‘, including 

16 a mistake or other error made by a consumer’’ be17 fore the semicolon; 

18 (2) by redesignating paragraphs (6) and (7) as 

19 paragraphs (8) and (9), respectively; and 

20 (3) by inserting after paragraph (5) the fol21 lowing: 

22 ‘‘(6) the consumer’s inability to access funds in 

23 a frozen, closed, or otherwise inaccessible account, 

24 except as required by a court order or law enforce25 ment or unless the financial institution determines 


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1 that the consumer obtained the funds through un2 lawful or fraudulent means; 

3 ‘‘(7) a reflection on a periodic statement of 

4 goods or services not accepted by the consumer or 

5 the designee of the consumer or not delivered to the 

6 consumer or the designee of the consumer;’’. 

7 (c) CONSUMER LIABILITY FOR UNAUTHORIZED OR

8 FRAUDULENTLY INDUCED TRANSFERS.—Section 909 of 

9 the Electronic Fund Transfer Act (15 U.S.C. 1693g) is 

10 amended— 

11 (1) in the heading, by striking ‘‘UNAUTHOR12 IZED TRANSFERS’’ and inserting ‘‘UNAUTHOR13 IZED OR FRAUDULENTLY INDUCED ELEC14 TRONIC FUND TRANSFERS’’; 

15 (2) by striking ‘‘unauthorized electronic fund 

16 transfer’’ each place such term appears and insert17 ing ‘‘unauthorized or fraudulently induced electronic 

18 fund transfer’’; 

19 (3) by striking ‘‘unauthorized electronic fund 

20 transfers’’ each place such term appears and insert21 ing ‘‘unauthorized or fraudulently induced electronic 

22 fund transfers’’; 

23 (4) in subsection (a)— 


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1 (A) by striking ‘‘unauthorized transfer’’ 

2 and inserting ‘‘unauthorized or fraudulently in3 duced electronic fund transfer’’; and 

4 (B) by inserting ‘‘fraudulently induced 

5 transfer or’’ before ‘‘loss or theft’’ each place 

6 such term appears; 

7 (5) in subsection (b)— 

8 (A) by striking ‘‘financial institution to 

9 show that’’ and inserting ‘‘financial institu10 tion— 

11 ‘‘(1) to show that’’; 

12 (B) by striking ‘‘was authorized or, if the 

13 electronic fund transfer was unauthorized, then 

14 the burden of proof is upon the financial insti15 tution’’ and inserting ‘‘was authorized or was 

16 not fraudulently induced, as applicable; or 

17 ‘‘(2) if the showing under paragraph (1) is not 

18 made,’’; and 

19 (C) by striking ‘‘, if the transfer was initi20 ated after the effective date of section 905,’’; 

21 and 

22 (6) by adding at the end the following: 

23 ‘‘(f) SHARED LIABILITY OF INSTITUTIONS INVOLVED

24 IN AN UNAUTHORIZED OR FRAUDULENTLY INDUCED

25 ELECTRONIC FUND TRANSFER.— 


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1 ‘‘(1) CREDITING OF CONSUMER ACCOUNT.—A 

2 financial institution shall reimburse the consumer 

3 for the amount of an electronic fund transfer that 

4 was unauthorized or fraudulently induced, subject to 

5 any liability of the consumer under subsection (a). 

6 ‘‘(2) LIABILITY SHARING.—Subject to para7 graph (3) and with respect to a loss suffered by a 

8 financial institution in connection with crediting a 

9 consumer’s account for an electronic fund transfer 

10 that was unauthorized or fraudulently induced, the 

11 liability for such loss shall be evenly shared between 

12 the financial institution holding the consumer’s ac13 count and the financial institution that received the 

14 transfer. 

15 ‘‘(3) LIABILITY OF CERTAIN INSTITUTIONS

16 THAT MATERIALLY SUPPORT OTHER FINANCIAL IN17 STITUTIONS.— 

18 ‘‘(A) RULEMAKING.—The Bureau may 

19 issue— 

20 ‘‘(i) a rule to identify certain financial 

21 institutions or classes of financial institu22 tions described in section 903(9)(B) that 

23 materially support other financial institu24 tions in carrying out electronic fund trans25 fers; and 


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1 ‘‘(ii) such other rules as the Bureau 

2 determines are necessary or appropriate to 

3 implement the shared liability provisions 

4 under this subsection. 

5 ‘‘(B) LIABILITY.—With respect to a loss 

6 described in paragraph (2) in connection with 

7 an electronic fund transfer, if any financial in8 stitution identified under subparagraph (A) is 

9 described in section 903(9)(B) with respect to 

10 such transfer, each financial institution and the 

11 2 financial institutions described in paragraph 

12 (2) shall evenly share the liability for such 

13 loss.’’. 

14 (d) RULE OF CONSTRUCTION.—Nothing in this Act 

15 or the amendments made by this Act may be construed 

16 to limit the authority of the Bureau of Consumer Finan17 cial Protection or the applicability of relevant consumer 

18 financial protection laws that may otherwise impose re19 quirements that are being amended by this Act. 

Æ 


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