Published: April 2015

Operation Choke Point protects consumers from fraud

Coalition: Americans for Financail Reform (AFR)

In letters addressed to the House and the Senate, Consumer Action joined coalition advocates in urging legislators to uphold the Department of Justice’s Operation Choke Point and to oppose any legislation that tries to restrict its authority. Choke Point is focused on regulating banks that help scammers and other illegal activity. Weakening the Operation would only make consumers more susceptible to data breaches, terrorism threats and internet fraud.

Operation Choke Point was implemented to stop banks and third-party payment processors from supporting fraudulent activity. Financial institutions have long been required to watch out for and report criminal activity, yet there is a long history of these institutions looking the other way to support highly profitable customers.

During the recent rise of online commerce and automatic debiting, scammers have developed ways of systematically extracting money from consumer’s bank accounts. An enforcement effort aimed at stopping consumer fraud by targeting banks that served illegal businesses, Operation Choke Point is coming under more fire in Congress recently by members who claim the measure forces banks to end relationships with a wide variety of lawful and legitimate merchants. Passing Sen. Rubio’s Firearms Manufacturers and Dealers Protection Act 2015 (S. 477), Rep. Luetkemeyer's Financial Institution Customer Protection Act of 2015 (H.R. 766) and Firearms Manufacturers and Dealers Protection Act of 2015 (H.R.1413), or any bills similar, would make it harder for government agencies to protect the public.

The coalition urges Congress to support, not discourage, efforts that deprive criminals access to the banking system. None of Operation Choke Point’s activities are aimed at lawful businesses and Congress should support critical federal agency activities that protect their constituents.

Other Organizations

Americans for Financial Reform | Center for Responsible Lending | Consumer Action | Consumer Federation of America | The Leadership Conference on Civil and Human Rights | National Association of Consumer Advocates | National Consumer Law Center (on behalf of its low income clients) | National Consumers League | U.S. PIRG

More Information

For more information, please visit AFR's website.



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Operation Choke Point protects consumers from fraud   (ChokepointHouseLetter.pdf)




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