WASHINGTON, D.C.— Dennis Kelleher, President, CEO and Co-founder, issued the following statement in response to the Consumer Financial Protection Bureau (CFPB) request for comment on a proposed interpretive rule outlining how the Electronic Fund Transfer Act (ETFA), which provides consumers with protections against errors and fraud, applies to new types of digital payment mechanisms, such as crypto and video games.
“Tens of millions of Americans routinely engage in video games and other virtual worlds, often putting up very significant amounts of their hard-earned money. However, when they are victims of unauthorized transactions, scams, hacking attempts and outright theft, they often have few if any consumer protections or recourse, losing lots of money as a result.
“That doesn’t happen at banks when customers’ funds are transferred from their savings and checking accounts because they get important anti-fraud consumer protections from the Electronic Fund Transfer Act (EFTA). That law allows consumers to dispute and requires banks to correct erroneous or fraudulent transactions, which puts consumers’ funds back in their accounts. This incentivizes banks to have robust systems and controls in place to prevent the loss of customer funds. The CFPB’s proposal today extends the EFTA protections to non-bank digital payment mechanisms. That would not only protect consumers, but also level the playing field among digital payment mechanisms whether involving a bank checking or savings account or another consumer asset account such as those used by crypto and video game firms.
“This proposal resulted from the CFPB and the Federal Trade Commission (FTC) receiving many consumer complaints, which prompted the CFPB to do a thorough study, leading to a detailed 60-page Report. The CFPB’s proposed rule would provide a framework for determining when EFTA’s protections apply to emerging digital payment mechanisms and consumer asset accounts, like video games and crypto, and ensure that consumers have the same rights to dispute fraud when it happens to their savings and checking accounts. We applaud the CFPB’s consumer protection proposal and look forward to reviewing it more carefully and commenting in due course.”
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