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Minnesota Legislature

Scam regulation could increase

Published (3/2/2012)
By Erin Schmidtke
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Scam and fraud regulations in Minnesota could soon intensify. Lawmakers are hoping to stop these crimes before they happen.

Sponsored by Rep. Joe Atkins (DFL-Inver Grove Heights), HF343 would require telecommunications providers and money transmitters to change their policies to help the state prevent fraud. The bill received bipartisan support in the House Commerce and Regulatory Reform Committee, which sent it to the House floor Feb. 29.

Atkins said that fraud affects innocent Minnesotans on a regular basis.

“You can’t go a week without seeing it in the news,” he said.

Under the bill, telecommunication companies would need to cooperate with state government by surrendering customer account information that could be helpful in a criminal investigation. Customers could also direct telecom providers to block international activity in their accounts.

Money transmitters would have to combat fraud by enacting anti-scam policies, paying anti-fraud fees, and increasing communication with consumers regarding outgoing money transfers.

The committee heard testimony from Jim Arlt, the director for the Alcohol and Gambling Enforcement Division of the Department of Public Safety. His mission is to investigate foreign giveaway and lottery scams in Minnesota, which cost residents millions of dollars each year. Arlt said that since 2007, his department has received over 100,000 complaints related to fraud.

“We got tired of telling people there was nothing they could do. … There are things we could and should do,” he said.

Arlt explained that scammers are often part of organized crime rings. They target senior citizens, who may not realize that the people asking them for money are criminals.

“One family had to stop their mother from sending money by cutting her phone line and flattening her tires,” Arlt said. The woman lost over $800,000. Arlt voiced support for the bill, saying it would provide a “one-stop shop” for victims of scams.

The bill’s companion, SF227, is sponsored by Sen. Linda Scheid (DFL-Brooklyn Park). It awaits action by the Senate Judiciary and Public Safety Committee.

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