Bill > AB2674

This bill requires depository institutions, such as banks and credit unions, to implement preventive measures to protect their customers from financial abuse or deception, which is defined as wrongfully taking or attempting to take a customer's property, inducing payments through misrepresentation, or obtaining control over a customer's assets through deception or undue influence. These measures include training employees to recognize signs of financial abuse and deception, not disregarding signs based on a customer's age or other characteristics, and intervening to prevent financial harm in "suspect transactions" – those that appear unusual or consistent with known scams. For in-person transactions, institutions must advise customers to verify the transaction with the initiator if the customer didn't initiate the contact, suggest contacting a fraud hotline, and may contact a trusted third party (like a spouse or authorized agent) if one is designated. For non-in-person, non-expedited transactions, institutions must provide a prominent warning to the customer about potential scams and the inability to reverse the transaction. If a financial institution complies with these requirements, it is generally shielded from liability for harms resulting from financial abuse or deception in that specific transaction, with an exception for minors. The bill also outlines a process for customers who believe they did not receive a required preventive measure to notify the institution, which must then investigate and potentially refund the transaction amount plus interest to avoid liability. Customers can also bring civil actions to enforce these provisions, potentially seeking damages and other relief if the institution fails to comply.

Budget and Finance, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB2674