What do lawmakers make of what’s happening in the US?

THE heads of the big American banks have been called to testify before the US Senate Banking, Housing, and Urban Affairs Committee.

On Thursday, JPMorgan Chase CEO Jamie Dimon was asked by the committee chairman Senator Elizabeth Warren about the instances of fraud that had been reported to the bank by customers using Zelle, a popular payment platform jointly owned by a number of banks, including JPMorgan.

Warren said Zelle had helped boost bank profits while allowing customers to be defrauded of at least US$500 million (RM2.3 billion). She said customers who fall victim to fraud on the platform are largely left to fend for themselves/

People sent US$490 million through Zelle in 2021, of which an estimated US$440 million were lost through fraud and scams, according to Early Warning Services, Zelle’s parent company.

The senator said she had reached out to JPMorgan and other banks in July for an answer but had been “stonewalled”.

The senator asked Dimon is the bank kept track of the fraudulent Zelle transactions and whether it was trying to hide the numbers.

A JPMorgan spokesman disputed the latter, saying in an email that “we reimburse customers for unauthorised transactions reported in a timely manner, and also reimburse for transactions where the consumer is fraudulently induced into providing account access credentials that are then used by a bad actor to make a payment”.

Separately, in late August, Warren called out to the Federal Reserve expressing her worries that its interest rate hikes were going to tip the nation’s economy into recession and put people out of work.

Are lawmakers taking note of the reports coming out of the Senate Banking, Housing, and Urban Affairs Committee hearing in the US?

The reports are relevant as Malaysia is experiencing the same problems of  going through these 2 issues at present.

With scams on the rise and banks washing their hands off any responsibilities, lawmakers need to be more proactive in urging for greater accountability from the financial sector and Bank Negara.

Bank Negara has justified the two recent overnight policy rate hikes. Will this result in high prices and millions of people out of work? – September 24, 2022.

* FLK reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.

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