Children and Youth Committee - Senate

I thank you members if you take your seats we're going to call this meeting to order and first on the agenda is the bank department security sport miss marshall I think you're going to bring everybody up here. So. Good afternoon okay recognize you and then it says each one of you go to speak and you presentations recognize that thank you center king members of the committee my name is susan marshall I am the arkansas bank commissioner and the arkansas securities commissioner and very proud to be with you all today to give a little update about our agencies and answer any questions you may have and talk about some emerging trans and a more recent developments within the financial services sector we have a whole host of emerging technologies and advancements in products and services in and around the banking and financial services sector that is not anything new I am very proud that are industry have always been leaders in innovation and technology the adoption of products and services and i'm very proud of where are banking industry in our securities industry stands today in arkansas as the senator mentioned we were talking a couple weeks ago and visiting about different things that are happening in the banking and financial services sectors and he said would you come and speak to the committee I so i'm very happy to. Because these topics are way more than just banking in and financial services they're affecting every business sector of our lives and I think it's important to eliminate that and make sure that legislators and business people in the state are aware of it and also think about if there is anything that we need to be doing in that regard one area of topic where the sender and I spend a lot of time visiting about was actually artificial intelligence and so that is something that is not a lot often talked about publicly but I think there's a lot going to be a lot more conversations in the coming quite frankly weeks a month and years and sell one and share a few comments and talk about that as well. Just this past week i've seen and heard at least three or four news stories that had to do with artificial intelligence I read an article that had something to do with one of our big box retailers here in arkansas I read an article that hit something to do about higher education and artificial intelligence it's in the hospital and health care financial services to health care sector as well as the financial services sector and of course it may be in your day today businesses I think many people don't quite realize that are artificial intelligence is already here you know for some examples. If you have an alexa device if you use theory on your phone if you use gps to help god you hear today and you had a pop up that said there is a road block taken alternate round that's part of are and of course if you have a netflix account or in amazon account and they pop up and tell you what you need to buy next or what you need to watch next that is certainly part of a I as well and so it's already in our day to day lives but we're seeing it because more prevalent in regard to our banking products financial services and our personal business. You know one of the things that are doing and and in particular some of these other products and services is trying to take some of the I guess guess work out of day to day business it is the idea that machines and software vs our human aspect can help us maybe new things quicker easier maybe or cost effective and so's when you're talking to a banker or a financial service provider if they are engaging in a I and some already or many are in the experimental stages but if you're talking to one of them they're going to talk about things like I said such as a car savings fraud detection or maybe the quicker delivery of products and services because the customer is going to be the one that helps drive this conversation their demands for doing all types of business quicker and easier will help initiate more adoption if you will buy our banks are an investment firms insurance companies and the like we all know that you can do almost anything on a cell phone today and so I think that is going to continue uh in the coming weeks the man's to be more common and more expected. The benefit to some of these parks and services it helps on decision making and it helps institutions gain better knowledge to serve their customers. Some of the areas that you may think of well who all is going to be touching are or other developing technologies whether you're an inventor where they're an investor and educator and executive a consumer or a regulator as we are these are all these are all areas that will be touching this and we will need to be mindful of this technology and what that means for our consumers and for our citizens in what that means going forward state and federal regulators myself in my counterparts across the country we have tools that are already in development to help us work with institutions as they adopt new technologies and new innovation we want to encourage that and we we want them to do it in a safe and sound manner they need to develop strong rise management frameworks around new a technologies we need them to think about sober security risk and how best to manage that and protect our data we need them to think about it from a legal standpoint we want them to do due diligence with the companies that they're getting a involved with and of course we want them to think about it as far as consumer protection to insure that all users and in users of technology are doing so and a very thoughtful and well developed manner. There's a lot of makes few points when it comes to innovation and technology there will be supporters they will be detractors and then there will be those of us that are somewhere in the middle cautiously optimistic about the utilization of different products and services in the advancing technologies behind them. And just like with anything there are opportunities for increased fraud because there are bad actors and criminals who will use technology. To their own good and to the harm of others and so it's our job is regular to be monthly thinking about that as it affects all of us you know and and I think this committee is a great opportunity to think about that because so many young people have cell phones today and that is an area where they need to start thinking about good practices and smart practices early on and so those who should a few remarks and we wanted to share about our thoughts on technology I could said we are in a very good position and from a regulatory standpoint we are prepared to meet and make these challenges head on and work with their institutions as they look at the next generation of banking products and services and so with me I have representatives from these date securities department who also want to share some comments about other areas that we see in the state where there has been increased risk in fraud and so give it often and let them thank you good afternoon my name's campbell mclarn on the deputy commissioner at the arkansas securities department as commissioner marshall mentioned scary department with is responsible for oversight of the securities industry but also the non depository mortgage and the money services industries in arkansas. The industries under a regulation have a a large economic footprint in contributing measurably to the arkansas economy we include a slide in the meeting material show and specific numbers for the department's registrance and licensees a few note notable figures include a total of fourteen hundred and forty nine securities registered firms a hundred and sixty thousand registered securities individuals seven hundred and eighty license non bank entities and six thousand eight hundred and twenty three license non bank individuals at registered securities firms have hundreds of billions of dollars in assets under management and our mortgage licensees originated and serviced over forty one billion dollars and loans in calendar year twenty twenty two my colleague karen tyranny will follow me in and discuss money services activity in our console that broken down into plain language the the primary missions of the arkansas securities department are to promote healthy securities and financial industry markets while simultaneously working to protect consumers and educate investors we accomplish these missions through our primary statutory responsibilities of licensing examination securities registration enforcement and investor education I did want to take a minute to highlight two emerging areas of concern in the security sector elder financial abuse and frauds related to new technologies these are typically threats originating from unregistered sources that calls harm to our legitimate industry are economy and are arkansas citizens now called the crime of the twenty first century by field experts elder financial abuse can take many forms and is the fastest growing form of elder abuse in the united states as reflected on a presentation slide included a report from the f b i's internet crown complaint center details that nearly six hundred and fifty victims over age sixty suffered over twenty four million dollars in losses due to financial frauds in arkansas during calendar year twenty twenty two some of these frauds include activity that falls under the juris. Diction of our department and these frauds have a major impact on local economies and families technological innovation and the proliferation of digital assets have provided benefits and new investment options for a main street investors however bad actors have used their growing popularity to purpose trade large large scale unregistered frauds on the public as one of the end close slide shows frauds and schemes in this space have led to an increase in enforcement activity and actions over the last few years our department are department has sought to combat these two rising threats through all our areas of work but primarily through investor education our work with industry and enforcement of applicable loss. The goal of our investor education section is to increase financial literacy and provide anti fraud education in arkansas we issue investor alerts informational releases and educational guards to encourage healthy saving habits and worn ending frauds and scams we have a director and deputy director of investor education who provide educational programs to schools organizations and civic groups throughout the state. Our investor education section also administers a grant program that awards equipment and resources to eligible schools in nonprofits throughout arkansas that provide investment education to students age grades five through twelve the grand program is funded by special revenue with the first hundred and fifty thousand dollars of securities enforcement finds received bar office and a fiscal year going to fund the program there are grant program we partner with economics arkansas and the walton foundation to ensure that the stock market game is available free of charge to every interest in. The. On the specific issue of elder for all we work closely with the industry to stop attempted frauds and prevent financial harm in two thousand seventeen the legislature amended the arkansas securities act to include a new section entitled protection of vulnerable doors from financial exploitation this section allow securities registered to place the hold on transactions and disbursements in a qualified securities account at financial fraud of the vulnerable adult is suspected. The securities firm and our department can investigate the potential fraud. In exchange for reporting the firm is provided immunity from any civil liability that may otherwise arise from reporting the transaction our agency receives approximately fifty reports from registrance each year pursuant to this section alone. The last primary way our agency addresses these emerging threats is to enforcement of applicable laws under our jurisdiction. These enforcement actions in president impose appropriate penalties against those running a foul financial regulations including restitution to victims and finds to the stay. Since fiscal year twenty twenty two are enforcement actions that resulted in fine penalties of over one point five million dollars in contributions of over one point one million dollars to the state's general revenue fine. And i'll now turn it over to carrying tyranny who will speak more about technology and are oversight of the mortgage and money service. Thank you karen to any director of consumer services in legislative affairs with arkansas security we wanted to turn a little bit more directly to the money services business in arkansas wine because it is an area that we see younger people engaged in more than what it's specifically younger people they used on the found computers not having it access traditional banks as much. And two we know that not everybody knows that we hang on money services for the state and then license in a registration so just a little bit a background on the money services business is a five trillion dollars sector in the united states the dates back to the mid eighteen hundreds is comprised of money transmission seller payment instruments stored value foreign currency exchange and virtual currency exchange. Many service businesses are among the first vintage leveraging technology to create new business models near delivery channels. And new automated decision uh decisions with partnerships with traditional banks as recently as nineteen ninety nine consumer payment options were limited to checks credit and debit cards wires or agent based many transmission and many orders today can do a consumers have a variety of options with consumer ready products accessible on phones and computers many services as a large growing and increasingly technology based they urgency the emergence of online capital capabilities in the eight nineties the other start of this error as internet in mobile technologies empowered users direct finds from their accounts leveraging the existing infrastructure today the financial account system is experiences another transformative phase with the incorporation of artificial intelligence amazing learning and payment systems financial institutions are currently leveraging block chain several coins in actor a I technologies to facilitate grape global trade and enhance international financial connectivity thereby reinforcing the role in the global financial infrastructure. Instant payment innovation and the rise of digital payments as a source and destination a much of the flow of funds and visited payments are booming looking forward we are seeing new providers such as platform as a service that are promising seamless customer transactions across products and services and a in machine learning will be used to personalize customer experience streamlined payment processes in protect against frida. As confident commission marshall mentioned there are positives to a I were seeing it in the money transmission space the reason it for approved efficiencies emergence cost a I can optimize in automate repairative manual task that help reduce human error and in reduce costs for the companies and it streamlines processes where financial institutions can compete more effectively in the involving market. Now so enhances consumer service where they can have chat by they can have translation services available for customers that speak in other language it can provide instant responses for could consumers consumers are now wanting immediate responses in major immediate results and this is a way that a I can really help companies across the spectrum but as a certainly in the financial institutions. It had also strengthened security a I can as this companies in a divine pattern detecting threats in responding to swept later to detect that threats. This can reduce the rest of data breaches in enhance overall security. However we also see sim some issues with a I that we want to point out one is just the inherent risk of technology companies mass priorities protection of the systems and consumer data including investment in protocols and ensure that data imposes are clean and accurate. Additionally some consumers may not be comfortable with an algorithm handling their personal information. And companies need to. Be proactive in communicating what they use the exact alcohol read them for in what they use a I for. There's also some buyers in discrimination in a I company's mess and. Make sure that the data that they're using it and that principles on which it's built our. That it reflects the accurate principles and people who at the built. A I will now be able to replace critical thinking necessary for the excess of a company companies will need employees who understand how systems are built and how those conclusions are reached and that also leaves into the regulatory issues that commissioner martial mentions currently there's no specific regulations on aid but they're still the federal and state frameworks in place that companies must comply with including glba fair landing and hundred. And there's also reputation on risk unreliable data info at least a unreliable output misinformation that spread through I can harm my financial avenue challenged institutions reputation eroding customer tristan loyalty and then finally at as mentioned by both commission marshall in campbell bad actors bad actors are using a I to try to find weaknesses and a company systems and attack that and get the consumer saturday cause that data is valuable and there's so much that out there right now. Turn it back over to commission marshall. Get afternoon i'm lorry truck dent and the president and CEO of the arkansas bankers association I will cave off this with I am not a cyber security expert so i'm giving you the information that I have if there's something I cannot answer today i'm happy to track down that information and get it back to you as the commissioner mentioned this is a subject that banks have been dealing with for many years our industry has some of the most stringent sober security and customer protection laws out of india industry out there so we've been dealing with with this for a long time so today i'd like to cover you know what is happening in fraud there's already been some instance it's mentioned here you know how the industries using a item friday for security rest and then consumer education which is an extremely important aspect of this any time we talk about that talking about how consumers can help themselves and how we are helping consumers so i'm going to read some of these points because there are a little bit nuts and I want to make sure I don't mistake anything and the these points that i'm about to to bring you well actually first and plus start with fraud so I want to share story and this did not happen in this state it happened in another side but I found out about this last week a teller takes a car it's a customer and the voice sounds a little off but you know sell phones she could have been in a bad spot wasn't sure continued with the call customers inquiring about their account so she starts asking the security questions she notices there is a slight delay in when the questions are being answered from when she asked them and so she continues to get suspicious and finally says well I think you're going to need to come in and complete this transaction you know just here are the bank hours come in any time in this was an elderly customer. And so she hangs up she notates the account with a fried alert that you know there was a suspicious phone call just so that whoever pulls up that account if the customer comes in they'll know what's they'll know what's going on and what's happened so then another call comes in to a different teller and it is a customer on the phone who says am afraid that i've accidentally given some information to fraudsters aka criminals and I think we should refer to the miscriminals because that's what they are and they called and said they were with the social security department and they were asking me questions in relation to my social security check and getting it into my bank account they said there were problems and they just kept asking me all these questions and finally I was just really worried that you know they were fraudulent and so I hung up and called you all well the teller pulls up that account sure enough it is the account that was just notated for friday by the other teller and they were able to say there has been brought on your account here's what's happened and you know able to help our do what she needed to do luckily because the teller recognized it it didn't go any further than that so that an impart of talking about a you will never lose the human interaction with that you will always need that front line that's their every day working to combine that friday and they are trained all the time the association offers training in that along with many other uh banking associations but they they constantly go through that training because as you all know fraud is ever evolving so that human element will never be lost there and as far as. Some ways that banks are using ai to navigate that landscape first we have enhanced some security and risk manager measures many banks use the office of the controller of the currencies model risk management guidance to drive their own risk and controls there's also just just recently the national institute of standards technology in ist released in january of this year a new arrist management framework r m so those are two different pass whether together or separate banks communities to to focus their risk management programs advance brad detection mechanisms a I enhanced friday detection methods I believe were mentioned over here in particular leveraging genai for early identification and mitigation of fraud counteracting adversarily eyes so our banks are prepping for sophisticated a I and able to tax so just complex fishing and social engineering tactics you wouldn't believe the amount of people that will still clip on a link and despite all the education that is out there in the in the public on that uh and banks train on that continuously continuously don't click on the link in both their employees and the general public sector wide collaboration in standardization I mentioned a couple things there that are creating a sector wide specific guidelines based on those a I frameworks and they're those are leading to more effective mitigation and emerging threats and they're ensuring alignment with regulatory requirements and super basically expectation expectations and as i'm mentioned the arguments are bankers association we are constantly watching those things and we are getting that out in disseminating that information to our members we have several education channels that we do that with and we also put things out to the public on top of that investment in humor and expertise I just talked about that human judgment into taping fraud will always be irreplaceable banks as well as banking associations including us constantly developed training programs to a quick scat the staff with right skills and we have local training here on that. And there's also national training that's focused on that subject. And lastly risk base regulation and it's so important that our policy makers and that includes you here at the state level as well as our fegal federal regulators and at congress work together with the private sector when crafting new policies aimed at ai so that we can harmonize those rules and regs at both the state and the federal level so they're not fighting with one another which is something that we're always on the look out for and across all the government agencies so in closing i'll say that consumer education I mean that is just vital we also work on that from an association standpoint because aside from educating our banks it's really important that the public knows what's happening in fraud and how to come back that we do offer some of that on our website if you would like to look at that it's bankers are cape bankers dot org we have a consumer resources page there that that goes through all kinds of financial education and and cyber education and things like that that's out there our banks and our association we we participate in the campaign called banks never asked that you can find that at banks never asked that dot com and you'll see a lot of our stuff issued out with the hash tag banks never asked that that is something you all we put that out on our socials we put it out on our website all of you have very public platforms and I would encourage you if you see it posted on our social or somewhere else that you share that with your constituents because it is it is a basic up to you know games and things like that and just messages in so it's a really really good program that the american bankers association foundation puts on and and finances and so we are very active in that and then the last thing I would leave you with airs the association wants customers used the far what I have deemed the fore method f AR and first if you think you've been a victim of fraud or you think somebody's just trying to defraud you flip the card over with your debit card or whatever it is you have credit card and call the bank number on the. Back of the card never call and number that you get in an email or a text because they will give you the wrong number you call they answer as the bank or or whoever else you're dealing with and they get you down that pass though always flip that card over and call it from the back the a and fore is account information at banks will never ever ever ask you for your security passwords never nor should any other entity that you're dealing with that they start asking you for your passwords hang up the phone just hang up the phone flip the card call the number and say hey did you just call me and then lastly report but that's the are infar is reports if you think you have been a victim of fraud immediately reported it to your bank and to local law enforcement the faster that you notify the bank the quicker they can actitry and counteract the measures that have been taken they can always do that but they will do their best to try and call back that money they work with the FBI they work with all kinds of law enforcement agencies to help to help them do that so if if there's one thing easy that you can remember it's banks never asked that and far. Happy to answer any questions that that concludes are prepared remarks we have been a pleasure to present an overview and we're happy to answer any questions okay thanks until the members committee where we're at today on this elder abuse and and fraud and they on everything was but basically I went to income bit with the elections up there in a special and they were talking about hey I was going to be using possibly in campaigns you know somebody's voice and everything and sending everything out it's from you and all these potential problems I was talking to one of my bank respect home he said well that's that's an our business you know when he was talking about how. As we say elder I mean my wife reminds me that i'm eighty five years old how to do things but you know the days of just he said me calling you and in doing normal top things of transfer and money or you know some loan amount or someone credit all those things he said where they can replicate your voice have enough information to be able to and he said also the reverse side that it can be as you mentioned the banker and it sounds like the banker I mean. Sounds like we're already starting to have that in so that's why I was the purpose of this meeting is trying to get out these broads and schemes and potential new things that we see going on on so you know in in the thing with **** as we had our other meeting about is that. I mean you talk about the law enforcement thing about how we turn it over a bit in his a situation it may be something watermallow or simple or country that is the the old days of broaden checks and it's maybe went over to another county and and that it's expanded out right is for is trying to find out who disease or who is behind these things right. All right well we'll have some questions I think senator love you are recognized thank you mr cheer and thank you are or the presentation and this is this wasn't interesting reading let let me first ask you all looking at policies that we have in what they're doing on the federal level um. Do you aren't see that there are any gaps that we may need to feel at the state level that may not be covered at the federal levels in regards to and for our protections or anything like that any any legislation that you can see that you might say how you know what this is good we need to do this for. I'll take that one is at this time I do not believe there is an interview really what. What was my opinion around that is so all banks that are actual commercial banks whether their state chartered national chartered have fdc insurance and so that means they also have a federal regulator in so the federal regulatory regime is always going to develop broadbased laws and rules and regulations and frameworks and guides and principles all those wonderful words that will apply to all institutions it is always a a desire of mind for us not to be overly burdensome on these private sector businesses because they they are operating in a good heavily regulated compliant driven industry and so our charge is to also enforce federal compliance or federal laws that exist and apply and so at this time and in these are emerging technologies and II will certainly say that that you know even the federal regulators at this time are working to develop frameworks and enhancing their existing oversight in supervisory programs. And so I think the best stage for us right now is to partner with them is is as lori said working with a state and federal lawn forcement working with federal congressional leaders and the federal agencies regulatory agencies to make sure we're all on the same page and then we will be at their able to ensure that we are pushing down the same guidance but I don't believe there's anything specifically at the state level where we have a gap right now but I appreciate that and we certainly would come to you quickly for a assistance if we felt like there is something that we needed to help us to our job better and protect a or kansas and and users have financial services I would just add to that I am on every friday I am on a call call the states is used work force group and so it's myself in my counterparts from across all the other states and it's specifically driven by state legislation so I get to hear what's going on in banking across the states and there's been nothing specific that's come up this for that is ring a bell as for as any kind of state while that's needed in the space thank you my next question i'm looking at the the report. And i'm just looking at the dollars that there are. There have been span i'm looking for one on down the twenty three it seems like you know like money transmission we talked about that it seemed like all the dollars are going down I guess we're coming out of covet and you know it may not have been recovered but can you can explain while we're kind of down in something II appreciate you asking that questioning and did need a car be up out we don't have the data from the fourth quarter of twenty twenty three yet cash and so we have been looking at the transit i'll be about the same in each of the quarters but we can update that information we'll get it in two weeks okay because I was looking at slightly mortgage originations and definitely working origination that one will be down because of the interest rates there have been across the country just your houses have been buy it or refinanced so that that so that number is going to steal that that was on the twenty twenty one twenty twenty two and if you'll remember the interest rates back in twenty twenty one I know it's the same on the bank side you know they it was definitely a great year or two refine and buy new house you know people are holding off on there at hoping the interest rates go down before they make a change okay but then mortgage servicing. That sounds showed but yes. Yes that is correct and talk to me that the net that number. The well the housing prices have gone up over the last few years so that and paid for a principle balance. Because the high school housing prices went out in twenty twenty one and twenty two and paid for some balance is still it especially because so many people you know bought new houses then and they haven't paid a much down on the unpaid principle balance thank you thank you mister chair links that you mentioned about and I forgot it what it what was the link since you mentioned banks never asked that is it yet banks never asked that dot com and then you can also get a our website which links to that many other things bankers are bankers all one word dot org okay can you share that with the stash people in in maybe we could get that out because that that that would be good for a lot of people to know so absolutely let me ask you a question if so we're going this way I mean they'll days to get in bank written statements and balance in your checkbook I mean if I would have told myself today that I we use in the credit card as much as I do today thirty years ago I want to set up that somebody in responsible but now you know I use a credit card when it times that early on I use the debit card a little bit with me now I don't use the debit card because. With the lease with a credit card I have some top of buffer balance there but it seems like with technology now you have to pay some banks I guess or pitch charging for paper statements if you want to do that so I mean are we going to get to the point where we're just going to be. That's going to be moved out I mean as general is the older generations get owner. Or II won't speak for all banks because each bank has to develop their own business model so you you mentioned some charge for this or some charge for that i'll tell you what these charges stim from in at banks band billions with the capital be billions of dollars a year to fight fried or to make hall things like things that they don't even have any control over we know target has had a data breach banks had to reissue every single one of those cards that chips are not expensive even though it had nothing to do with their own breach and to pay for that so so in a preventing fraud and then paying for things like that that happened with broad that's real that those are real dollars that the banks themselves absorb and so they decide based on their business model what makes sense that might need a fee a small fee or what does it so e- each bank is going to have their own business model sender add like the to add on that you don't. I believe that in different sectors of this country maybe here in arkansas we may have a little different look of what the future banking will look like compared to maybe new york or california certainly because we still have a population that they use their own automobiles they they drive to work they drive to their place have employment they drop home they do their banking business in person they want that one on one personal relationship and they still want to utilize cash or a check my household still does so I think that overtime individual consumers preferences may evolve to a point where there's not as much of our traditional at check riding or current cash or getting a paper statement I think over time some of that may may develop you know we have a a ten of we have a lot of new employees that are fresh college graduates and many of them will never go to a bank they will not you know visit a bank other than through their job but I think a lot of you know how school college students young adults and that may not be the way they get their banking products and services in the future it may be all through an online banking platform or a mobile app in so I think over time we will see more of that but I do not believe that but traditional way of delivering banking products and services will go away anytime soon and i'm very proud of that because arkansas banks are focused on that strong customer service and at that relationship it is changing my dad is eighty six he turns eighty seventies in nineteen fifty five so you know I was while he would have to write a check what he went into particular restaurant chain restaurant and I would say the name that they had front chicken any box for a chicken they quit taken checks. And he's like i'm there were coming back here if you can't take and he's very offended by that that he's went around the country never wrote a bad chicken's lot like if they won't take a check out things for changing I get what you're saying but you know and we're seeing fraud in every aspect I mean just because it comes in the mail doesn't mean it can't be fraudulent he asked their retired post inspector and he said yeah fraud's worse in it ever is now we have ports pirates stealing your stuff I mean so it it is certainly a different world. Fraud problem is with the elderly. Well I mention a report that was included here in our packet that was report from the fbi and their internet crown complaint center which anyone can go in and follow complaint fee I will go and investigate it at the end of each year they release the report that state specific that shows how many victims ever a certain number certain age and the amount of loss and the types of frauds and scams that were were perpetrated in that state and so in twenty twenty two there were six hundred and fifty victims over age sixty in arkansas and twenty four million dollars in losses just here in the state of arkansas and that numbers have been increasing each year and so I think if you poll people and ask around everyone that you talk to no someone or has a close family member who is either being perpetrated I had a fraud perpetrated upon them or nearly perpetrated upon them and it's become a you know and an issue close to everyone and I think there are few reasons for this I think one is that the the barriers to social media or lower than they've ever been you know if you get on facebook you'll the the first people that you see on facebook or generally your grandparents you're your answer uncles they're active there and and I think you know the dynamics of family situations have changed to you know people don't live in the same home town that they grew up in you know me my father lives in mississippi seventy one years old he's pretty old and crossed the heat can handle himself is a judge but I do worry about in being down there and i'd check on it to make sure that you know things are okay because people are lonely and they have access to social media and anyone in the world any bad actor in the world can perpetrate a fraud right here in arkansas well outside this country and from from anywhere else and so. They're generally targeting our elders because they have money yeah that's one thing had a fraudster will look at is they're not gonna target young people because young people generally percentage wise don't have that nest day and elderly people may have that they can you know if they perpetrate that fraud it's a bigger leg for them and and their instances were elderly people are conditionally impaired so they may be alone they may be vulnerable they may be looking for contact and their people out there who will sort of bring them and eventually you know pitch of fraud and investment and to fraud them so it is a growing problem and it's the problem with access and you we always encourage family members to check in on your love once you know even if you especially if you don't live nearby you know consider our ad that what i'm worried about that there may be a a fair amount of fried that goes on reported because quite frequently someone may be embarrassed to report it or they may not have a lot of one that is aware of helping them with their you know business or financial matters and and just simply are not familiar that something has happened or or is in progress in so I feel like that part of it is going to be a challenge for us going forward as well for all of us is trying to get our hands on just that that's your volume we'll thank you for that because I we could add to yeah I was just going to add that you know we passed the stapler act I believe it was mentioned earlier in twenty twenty one the state the state legislature passed that and I believe the attorney general's office keeps up with a the number of money saved through a you know when that when I passed it gave banks additional tools to help fight you know helped bite the friday in they can temporarily hold a transaction if they find it to be fraudulent and they can also makes it easier for them to work directly with law enforcement to get that process kicked off a lot faster to get it reported. And they I know they do track that number I don't have it off the top of my head but they could give you that the appreciate the second comment there because I find six hundred fifty. Last year low or in a year low twenty four me and may not be I don't know the numbers. But six hundred fifty certainly seems low because you I do a lot of. Are facebook marketplace and and other things and and plus being in business I get multiple scam. Text private messages and more daily. And the it on my watch come to probably about one to month or once over two months with a letter. Or a text and says is this real or is it a scale. And i'll ask a couple of questions and will usually come up with it's a scam. But then I got a in fact I got a message that appeared to be from the post office about I know had got lots from ups and and maybe for the positive office about package not being delivered and but got lots of packages going both directions and. This one looked legit are responded to it. And I do region bunch is a personal information before I get down in their asking me for a password and it's a scam you are being scam but i've already given them all this this personal information that they can use. And i'm a fairly intelligent you know dealing with it every day person and then I remember my paper before facebook and social media and he didn't have anything to steal other than a sole security but it was a constant thing you know and it was bothering never reported but you know he thought he had a fortune for his family here and there were he had responded to these different things and and he loved to talk to people in and so it must not be as high as I would think it is or yall would be screaming that we needed to do something. But it seems to be higher than they wouldn't be doing it if they were I wouldn't get these multiple requests per day if it wasn't working. And it's got to work more on the balance that then others and so this I mean it in your sector this really alarms me because what they've got to be making a lot of money at it and too there seems to be little way to catch them little processes for doing it am I wrong about that. It will enter nest are in and to center king's point so many of these criminals and whatever mode of fraud they are committing whatever method their utilizing many of them they're they're not across town or I mean they are international or hiding behind the screen and someone's basement I hate to be negative about that but that description is is not entrying and we may never even with the highest level of law enforcement oversight or tools may never be able to track down and identify and and then when you do then yes or the ability to fully prosecute them or bring bring you know a sense of justice to be impacted but let me also add your good safeguards and for me to remember home and press to put him out as one thing. But you know i've got multiple deals from supposedly from walmart about the. Packages that were shipped in my name and so they were all scams then I got one that almost didn't respond to and somebody actually had had my account and it was walmart how in the world do you you know you're used to ignoring them because it's just a cost at scam scam scam how do you had you sift out the legitimate from the scale because fortunately I was I just bought it in airplane by the time I got to the other ear not went in and stopped it and they actually stopped the packages before they for they went out it took two days to change my password which I thought was in saying but it's a homework issue but. Now because we do get legitimate you know I got a got a legitimate call from credit card copy I didn't call back for two days and it turned out to just somebody in our business had had problems entering the numbers tips on a new credit card but it could have been something much more served but I didn't take it seriously because my voicemail made text my measures are all filled up with scan. And I do believe and tell me this point earlier now one of the biggest challenges is once I fraud or a scam has been uncovered and unfortunately that is usually when someone has been harmed someone has as a realize that they have been at you know either lost money or or lost data or other information or loss access to something certainly everybody would like to find someone to help resolve that for them or look to someone else for restitution and often times they're there's no one to look too because you know they were an individual who conducted that transaction legitimately legally and you know the banks and other financial providers are in a difficult position because they they want to help their customers our customer ask for help them facilitate a transaction in and there's no reason to believe that it's not legitimate than the next thing you know someone's been harm financially and there is no I can said no good restitution for it in the in often times just a complete loss to the individual and that's hard because banks always want to help their customers they want to take care of them but it it's it's a very big challenge that i'd do not see that part of it with any future resolution the education and the training and the awareness is what I think we can all work to do in any business were in but especially we as regulators and and the industry leadership to try to make sure that we're messaging. Individuals if you'll come up with the magic bullet that we can help the elderly and protect them better because the balance in this world just seems unreal I would I would add that and check with your your specific bank in your account to see what broad controls you can't turn on I have with my bank credit card everything is everything they offer is turned on for instance anytime my credit card is used online if it's not run through a terminal I get a text that says you just received a charge in this amount from at the store or whatever it is and so I use all those bright controls so they are i'm getting automated texts and things like that because I just like to monitor it I have other other things you know with the with the credit bills and things like that turned on just so that I have to actually go in and unlock my credit before somebody can run a lot of application or something like that on me so I all of those tools are out there to utilize I would just encourage you to check and see what's available i'm and i'll just touch on a check running really quick and we have check fraud is rampant rampant right now about you know back in the day you remember them washing the checks well that has come back with the vengeance and it's not just you know your local guy down the street doing it these there are crime rings of people washing checks and a lot of business checks for thousands of one thousand of dollars and so I would just say a don't put your check in your mailbox because mailboxes are getting robbed postal carriers are getting robbed the robbing the postal courier for the blue box key and they will actually go and unlike the blue box and take me out of that or they'll they've got a little devices they can reach down into the mailbox and get the cheques out of and then you know throw away everything else so I would just say take it to the post office if you are going to mail a check and if you're writing a cheque use and deliberable ink. That soaks into the paper such as a felt at pin or just something that's got a really heavy I just wanted to get that public service announcement and there have just because that is such a major more than. Would make one recommendation to you for your customers I wouldn't do paypal for years because he detects your check and account to it. And finally I did so much business online that had no choice. Recommend to them that they create a separate checking account with a small amount of money just for just for that that because then your losses can only be that much and I put a thousand dollars in it ever so often because that's my you know that's the could lose it because people can scan paypal. And sometimes paypal knows elected med they've been scam so. Thanks mr chair if you do maintain a large balance in paypal. You are defrauded that money once it's gone it's it's gone it's not a bank. And and I just wanted to add one more thing senator in answer to your question about what to do how can we help the the elders they are being abused out there and and like commissioner marshall mentioned there's there's often very little recourse once the money's gone you know it's it's generally gone and and hard to recoup but one thing that we do look at is is the fact that you know an outside prevention is worth the pound of cure and so what we try to do is we have this investor education section that goes out into communities and we try to present on so do anti fraud subject matter we have presentations for civic groups and charges and we're going to retirement homes in all the like to try to educate people across the state about these frauds and scams that are out there what they can do who they can contact if if they're being if there's a fraud attempted to be perpetrated on them and we have this act that we we include where we can work with industry to try a stop and prevent the money from leaving the account and so these losses and the success stories are hard to quantify but the the if we can reach an arkansas and before bad actor we feel like we have a good chance to success there and so we're trying to get out as often as we can to reach people before the bad actors from wherever do and that's that's been our approach and and we also you know we do take these enforcement actions and in some cases what we do recoup money but we always try to caution people that you know that's not a normal outcome and a lot of these actions are taken to try to raise awareness and issue press releases about frauds and scams at her ongoing to try to to make the public aware. Well thank you and you know what you stop that people not report and I think there's a lot of times people are embarrassed or you know my wife worked for a major credit card banking for some time said that you know these fraudulent scammers are very good they've already thought the flow charter out before you went down that road in somebody that had had been snaped before. So some of these people were calling feel like the mistake was on their part and they they would really you know and so it's brought him so we have representative in it in and I think senator. Thank you mister chair I want to go back to it depending commissioner campbell was talking about with the schools fat at every soft and I do get something to mail seeing it you gave some money to a particular school how does that work is it for every school or do a school had to play for these grant money unless a great question we we have a grant program that we sponsored through our investor education section and is funded with enforcement find money so it's special revenue but we advertise the schools that these grants are available and we work with economics arkansas and other organizations to try to get out the word that if schools and eligible non profits that teach investor education to students grades five three twelve have a need that we have resources that we can provide and so we had this those grand eligibilities we encourage schools and i'm probably to apply and then they'll submit their program for it for eligibility and we'll make a decision on it but we have increased our program over the last year we've had such great interest that we came back to you all and asked for a appropriation of additional hundred thousand dollars this year we gave out closer to two hundred and fifty thousand dollars and to schools and nonprofits which is a great thing we'd like to continue to grow that program and so we would like you know all a legislators to let their we're gonna stations and their community know that these funds are available as well and would love to partner with all you to to get out the word and continue to grow that program for because we do have programs with other educational programs the schools as well and we you know port pair that with the resources and we we feel like again the earlier that we can help raise financial literacy and and teach children about healthy savings service that the the less likely they are to fall victims. Scan in the future and our programs went all over the state about was there about forty or fifty recipients I can't remember the exact number of programs but they were in every corner of the state and so we would love to have like said as many as as we can find it as many are interesting when does those applications go out. Generally in the fall and then we make our awards you know november december but you know if there's money left over we can we can do that into the new year as well that we don't have a cut off date in october november this is ali's wine school and that cause out several schools in my district but always want school get it so I was just wondering how do people come out talk about it ours is something that they just now to do so I think it's a great thing to do. So yeah we have some historically you are aware of the programming and submit grants and then we do go out to schools and in advertise the grants and economics arkansas has some good virtual programs online that reach out throughout the state to teachers and so those are a few ways that we. Advertise. Thank you thank you mister chair am thank you for this quickly and at this southern probably missed it but on the elder funding it took friday and arkansas because the easy stand for again. It's at twelve million. I believe. Page of your. Presentation. That is. I think that's related to crypto currency frauds. Ec yeah that's an acronym but it it relates to a. At frauds and crypto currency and cryptocurrent. It was just the biggest you know the biggest amount so I just didn't know what bc stead for and so i'm not familiar with with that and then at appreciate the the topic very much I was you know appreciate and got talk to hurry about this but we i've had a constituent where the bank actually had recognized an older fraud. A situation and when. The constituent called me and asking for. I don't know it's fines to pay some girls medical bills I mean it was just clear that these people were taking advantage of him but he refused to believe it and that that was remarkable to me that there were so many people that just refuse me arguing with me that that was not the case then I don't know what category that would fall into you if that would be confidence and romance that category probably I guess because. You know she was convincing this elder man who had a lot of money that it's just a good story that everybody should really pay attention to you but she was giving him all these fake medical bills and convincing him to send money not to the institution where the medical bill was owed but to her bank account and then there was no file up that she was giving to say that you know that this was real or not so I couldn't believe you know but the people at the bank that they had tried for you because I called them and and are our new legislation they had some tools but I mean it was just that their hands were kind of tired too because the person wasn't so I don't know what you do about that at all I mean there's just hardly anything to do about it etc at some point and I do think that we've got to like partner with law enforcement on some of those cases because that is abusing somebody in my opinion that is a mental manipulation and a mental abuse of an elderly person and I think we do need to look at the statutes on the state on the books. To see if we can actually build a case based on that you know abuse of that of that individual because because you're talking about financial abuse here and you're talking about a high level of just manipulation and and downright evil that is occurring. From the case that I personally you know have worked with somebody and etc I ever family friend that was impacted and I will take that your verge one step further even to quite frankly use the word threat that they're lives or threatened and nor maybe their family members are threatened which it crosses certainly crosses the line from our criminal standpoint and and and it praise on individuals fear. Fear for themselves and their families and and and certainly you know. Banks have been just an app you know don't want to put it near historical perspective but with other types of fraud over the years banks know that to get law enforcement involved immediately your local alarm for spent all the way up to the fbr secret service and that that is very some something very common traditional for them to do an mn we encourage that as well because that's where it fits you're exactly right and you know some has we don't hear the back story of the outcome of that you're absolutely right that it needs to flow through the criminal just a meet absolutely because I mean people are not going into I mean generally speaking you know or not the wild wild worst and we're not going into a bank and robin a bank or whatever but this is the way they're robbing people and there's no difference I mean you can use the word fraud but this is robbery that's what the says and so this is you know this is just as big of a crime as anything else and so II think we just have to do a better job working with our law enforcement to really go after in our prosecution attorneys to go after this type of stuff because it's just so wrong but I really appreciate the topic thank you. The. Thank you for doing this and I think that if you don't care we'll kind of continue to visit and if the members the committee ring by attendant as any more questions let me know as far as the senate ageing children youth were looking at some of the issues of work this is not a she report sextortion with young people today or so that's been a rising crime so that's one of the topics we're looking at in this one maybe one that we're going to continue with an auction communicate with you and thanks for test phone on this because it's certainly being discussed out there I mean there is things that happen it's almost seemed like if you check something online these do you see this issues colorado a lot in stroke issue you almost have to be struck with it or have somebody close to you before you start paying. I mean I certainly think that people are aware but maybe it's it couldn't happen to me and and then unfortunately it does now a painting you know if I check my online account it's not coming up for something it's just something that happens my gosh what's going to happen is you know happens but anyway well thank you guys very much in our visit with you yeah in in trying to educate people and if you get the information to the staff people will get that out of the members committee in i'll visit with you guys a little bit more as we progress banks were bringing us I think this was interesting so if you ever have a case of like somebody a I want to deposit somebody in some areas account if they do i'm probably not going to report that anyway thank you very much in