Crossed Wires: How Current Federal Laws and Regulations Are Inadequate at Protecting Consumers from Sophisticated Wire Fraud Schemes

Authors

• Emily Brafman, University of Miami School of Law

Document Type

Notes and Comments

Abstract

The shift to digital banking has redefined the financial services industry, allowing consumers to conduct everyday transactions, such as wire transfers, at the touch of a button. However, this convenience comes at a steep price: as digital banking becomes the norm, consumers are increasingly exploited by sophisticated cybercriminals, enabled by a legal system that is ill-equipped to handle modern phishing and wire fraud schemes, ultimately draining consumer accounts. Unfortunately, existing protective measures, such as the Electronic Funds Transfer Act (EFTA) and the Uniform Commercial Code (UCC), have proven to be outdated and inadequate to address the unique risks posed by modern financial fraud. Their outdated provisions leave consumers vulnerable, with limited recourse against increasingly complex cybercrimes.

This Note highlights the urgent need for reform, using New York v. Citibank as a prime example of the disconnect between consumer expectations and the legal safeguards in place. The case, brought by the Attorney General of New York, challenges traditional interpretations of the EFTA and UCC Article 4A, arguing for a broader application of the EFTA to wire transfers. By exploring this legal argument, the case underscores the need for a stronger consumer protection framework, enhanced security protocols, and more transparent banking practices to ensure consumer’s funds are protected. This Note argues that the EFTA and UCC must be reformed to better reflect the realities of the evolving digital banking landscape. Proposed solutions include extending legal protections to cover modern digital transactions, holding banks more accountable for inadequate security practices, and sealing loopholes that allow cybercriminals to exploit consumers. By addressing these gaps, legislators will strengthen consumer protections and foster a more secure, resilient financial system capable of combating emerging digital threats.

Recommended Citation

Emily Brafman, Crossed Wires: How Current Federal Laws and Regulations Are Inadequate at Protecting Consumers from Sophisticated Wire Fraud Schemes, 34 U. MIA Bus. L. Rev. 483 (2026).
Available at: https://repository.law.miami.edu/umblr/vol34/iss3/6