Connecticut Deserves Real Protection from International FInancial Cybercrime
/by Geoff Luxemberg
In early January, Connecticut Attorney General William Tong and the AARP launched a PSA warning older adults of the dangers of financial cybercrimes. The PSA featured the story of a 61-year-old women bilked out of more than $1 million in a romance scam. Now, instead of retiring in the next few years, she’ll be working to rebuild her savings and pay off the taxes on her early retirement account withdrawals.
Unfortunately, this story is far from unique.
Nationwide, 57,000 Americans fall victim to scams daily, with total annual losses approaching $160 billion. Seniors are hit particularly hard by these crimes, with their average per-victim losses of more than $33,000 nearly two-and-half times that of non-senior victims.
As a State Representative, I've heard countless stories from constituents who've been targeted. Whether it’s romance scams, imposter scams where someone claims to be a utility company or the government, phishing scams, or one of the many more types of scams impacting Nutmeggers, the impact is the same. Criminals walk away with a boatload of money and victims are left holding the bag.
But what complicates the situation further goes beyond the tactics the criminals are using, or the fact that most of the stolen funds are immediately transferred into untraceable cryptocurrency. The most difficult part about stopping these scams is that the perpetrators responsible are acting from beyond U.S. borders.
Americans are facing a coordinated assault from international crime syndicates operating predominantly out Southeast Asia. These syndicates run industrial-scale fraud operations targeting Americans around the clock. The scammers, victims themselves after having been trafficked, use every tactic in the scam playbook to build a relationship with a victim before getting them to hand over their money and disappearing without a trace.
“Americans are facing a coordinated assault from international crime syndicates ... Stopping them requires comprehensive solutions at the federal level. ”
At the state level, we can issue warnings and provide tips for how to protect oneself from falling victim to a cyber scam. But these warnings are no match for the foreign crime syndicates. Stopping them requires comprehensive solutions at the federal level.
Fortunately, Congressman Jim Himes recognizes the need to think boldly about stopping these crimes and last year he introduced the bipartisan TRAPS Act to create a federal public-private task force aimed at preventing scams. The legislation has garnered bipartisan support and backing from many consumer groups. But the TRAPS Act is still just a starting point. There’s more that can be done to protect Americans.
Congress can push for increased resources and training for law enforcement to identify and dismantle these criminal networks before they strike. They can also work to strengthen international partnerships to shut down foreign scam centers and hold these criminal enterprises accountable.
Additionally, they can look at solutions that have worked elsewhere. Some countries have implemented successful measures like mass text message registration requirements and enhanced transaction monitoring that have reduced scam activity.
Congress must, however, steer clear of solutions that could embolden criminals further while creating unnecessary risks for small businesses. Some have proposed regulations focusing exclusively on peer-to-peer payment platforms like Venmo or Zelle that would direct them to refund all scam victims. Proposals like this not only ignore the number of platforms and financial tools available to scammers but provide a funding stream for their misdeeds. They’re half measures akin to installing a new lock on your front door while leaving every window open.
Dismantling the scam infrastructure demands complex solutions. But above all else, it requires targeting the underlying problem: the criminals responsible. As our lawmakers in Washington look to address this issue, that should be their focus.
Geoff Luxenberg (D-Manchester) is a member of the Connecticut House of Representatives.
