WASHINGTON–Acting Comptroller of the Currency Michael Hsu said the U.S. should consider borrowing an idea from the U.K. and require financial institutions to reimburse customers for losses resulting from push-payments fraud, especially when the fraud is powered by AI.
In remarks to the National Community Reinvestment Coalition’s Just Economy Conference 2024, Hsu said the U.K. regulation requiring such reimbursements “deserves greater discussion and debate” in the U.S., particularly when the fraud is powered by artificial intelligence.
The comment was included as part of broader remarks around fairness being a priority of the OCC, which included his thoughts on AI in the banking sector. He noted AI can be both a tool for fighting fraud and for making fraud an even greater threat.
Those best positioned to help solve the challenge, according to Hsu, are financial institutions and AI companies.
The U.K.’s Rule
Under the U.K.’s new rule. when criminals trick a consumer into sending money to a fraudulent account, the reimbursement is split 50/50 between the customer’s bank and the receiving bank.
“In cases where AI plays a role in the fraud, splitting the liability evenly between the customer’s bank, the receiving bank and the AI platform would seem to be a good starting point for consideration,” Hsu told the meeting.. “Such a liability split would protect consumers while creating strong incentives for those best positioned to develop effective defenses.”
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