A Virginia Beach delegate has introduced legislation aimed at protecting consumers from a fraud scheme that has victimized more than 500 people across the region, following an ongoing WTKR investigation into what federal prosecutors call the "parking lot scam."
House Bill 190, proposed by Delegate Kelly Convirs-Fowler from District 96, would require financial institutions to temporarily suspend accounts, reverse fraudulent transactions, and prevent further fraud once they become aware of fraudulent activity.
The proposed legislation states that financial institutions would be required to take reasonable measures once they are receive knowledge of fraudulent activity. It would also require them to provide consumer education materials to the account holder.
The scam involves criminals approaching victims in parking lots, pretending to be in crisis and asking to borrow the victims cell phone. The perpetrators then quickly access banking apps and sometimes take out personal loans in the victim's name before transferring the money.
"I didn't get any of the loan money. I didn't personally use any of that, didn't help me at all so for me to have to keep paying the loan off it's just a hindrance almost," said Travis Minson, a victim of the scheme.
Federal court records show there have been over 500 victims across the region. WTKR's investigative reporting has highlighted numerous local cases over the past year and a half.
"I could relate to the scam, not because I have been scammed, but because my husband and I recently did a car loan, and it was all done through the app literally no checks and balances, so I could understand how it could happen so quickly," Convirs-Fowler said.
Several months ago, the WTKR investigation caught the attention of local attorney Gary Byler, who has filed two lawsuits and now represents dozens of victims.
"I knew nothing of it until I saw your probably third or fourth report, and immediately picked up the phone and said, Margaret, this is absolutely not the rule," Byler said.
While WTKR highlighted several cases involving Navy Federal customers, experts say fraud is a major problem with all banking institutions.
Convirs-Fowler acknowledged that some banking institutions may find it difficult to deal with changing technology that can present gray areas when it comes to the law.
"I don't think the banking institutes really know how to deal with this, honestly, but they are at the table with us, working on the solution so this bill might not be in the form that it passes in, but it's the starting point that we need to go ahead and get this in front of the governor, get it signed, and at least get a solution for our consumers and our especially our military members moving forward," she said.
"Basically, if they're made aware of fraudulent activity, then they need to deal with it," Convirs-Fowler said.
Byler credited the WTKR investigation with spurring legislative action.
"I don't think that Delegate Fowler would be looking at legislation if your reporting hadn't exposed so many unfair practices," Byler said.
The proposed legislation is expected to head to a subcommittee for discussion next.
