House Standing Committee on Consumer Protection & Commerce

Good morning everyone. It is Wednesday, December 3rd. Wow, look at those mics. It is Wednesday, December 3rd, 2025, about 10am in Conference Room 325. We are here for an informational briefing, briefing on fraud in our communities. And I want to thank everyone for being here today.

We've got AARP with us, Coin Flip, HPD, Hawaii Bankers Association, DCCA, Office of Consumer Protection and the Department of Law Enforcement who just walked in. So we will the structure of this is going to be we're going to be asking each presenter to speak.

Really the purpose of this is to address the fraud that we've seen in the community. It seems like fraud scams are increasing exponentially.

A lot of stories I've heard from the community are of mostly Kupuna getting ripped off, sending a lot of money overseas, believing that they are helping their grandson, grandchild out of, to pay their parole out of jail or that they want a lottery or some kind of inheritance that they need to pay for. And.

It'S crushing it really. I feel like we can all feel it as if our grandparents or our parents or our siblings are getting money stolen from them that they need to live. So it's become a real burden on our community and I think that it's touched just about everyone I've ever talked to knows someone who's been scammed.

I'd like this briefing to get information out into the community so that people know what to do or know what to look for, can identify the scam, can avoid the scam, and if they've already been scammed or know someone who's been scammed, can know what kind of resources are available to them.

The very last portion will be touching on some legislation that we are considering for next session in order to try to address this problem.

We don't have a silver bullet here, but I'm glad that everyone here has the resources that we need and honestly the expertise to try to guide our community to avoid the scams and to advise them on what to do after they've been scammed. So with that I'll turn it over to AARP.

The way you're going to have about 10 minutes to talk, try to stay in that. Less is good, less is more. And then we'll open it up to some questions from the Committee as well. So AARP please.

Thank you. Thank you Chair Matayoshi for scheduling this and having us here. As you say, Kupuna and others, young people get scammed too. The challenge is that Kupuna have, over their entire lifetime of working, have saved up resources. And that's what makes it tragic, is when they lose.

Their resources to a scam, they don't have 1020 years to make up that loss. And so in many cases, they aren't just losing money if it's significant. They're losing their homes, they're losing their retirement savings. So in truth, scams really are an epidemic. And I want to make sure I'm sharing my screen. There we go.

And it's not working. Now. Hold on.

I see your mouse moving.

Yeah, there we go. Okay, so one of the things, as I said, it's an epidemic, and Kupuna and others are victims of scam. And part of that is because for many Kupuna, one, they're just trusting. Two, as you indicated, they have concerns about their loved ones. And one of the things that scammers definitely rely on is emotion.

They get you into an emotional state where you're basically not thinking logically. Literally, people say to themselves, well, I'm too smart to be scammed. The truth of the matter is it can happen to anyone because it all matters on the situation. These scammers have been prepared, trained, and work hard at it.

In some cases, they're actually incentivized to do well at these scams because in some cases, these are offshore criminal entities where people themselves are victims and put into a situation where for their livelihood and their ability to remain alive, they have to meet certain thresholds.

So here, what I want to talk about is some of the types of scams. So, Cher, you asked about what kinds of scams are out there. One is imposter scams.

You talked about the grandson, but they also have, whether it's the IRS, the Tax Department, sheriff's office, they'll give people the impression that something they're at risk or someone they love is at risk. Or in some cases, what they call romance scams. They impersonate someone that someone believes is interested in falling in love with them.

Another one is online shopping. If you don't know about 4 in 10. Social media fake sites for purchasing are themselves scams. So the truth is, if you're looking at purchasing something, especially during the holidays where the price just seems unbelievable, it's likely a scam. So, again, lots of different ones. Investment scams, Internet scams.

So they rely on people not being able to spot a scam. So avoiding them are much harder, is much harder, and it's going to get much more difficult. Here. We wanted to show that in 2024, the FBI identified how much complaints there were as well, as loss.

And you'll see people 60 plus out, you know, out as far as how much was lost, 4.8 billion. This is nationally, not in Hawaii, but disproportionately, they've basically lost four times all the other age groups across, across the whole age range. So the point there is that again, they often have considerable resources.

Not all kupuna I know have that kind of resource, but many do. Again, pensions, 401ks, their home, people have mortgaged their homes. They've. Again, they're people who normally can make very sound decisions, but the emotions get in there. And these scammers absolutely know how to psychologically exploit these people.

And that's why it's hard to get people to come forward because they're victims and their shame. And the point there is exactly that they've been exploited in some ways. I know folks don't like the term grooming, but it's a different type.

There's a particular term they use but I don't like to use, has to do with farm animals. So the thing is, they're life savings. They're targeted. For that reason. And again, as I said, the tragedy is the fact that they're not going to have 102030 years to recoup that loss. So it's significant.

So here are some of the common things. You know, as you said, grandma, I'm in jail, I've been arrested.

And again, with AI, that's going to be even more difficult because you can have someone that in fact can do a FaceTime or video call with you and it will look like your grandchild, it may sound like your grandchild, but again, in those instances, hey, you know, say, look, give me your phone number, I'll call you back and call their parent.

Or you call them and find out, no, they're actually, you know, at CVS or somewhere and they're not in trouble. So same thing with banks. They're not going to normally call you or ask you to provide sensitive information. The other one that's very common is tech, tech scams.

You'll get something where it looks like something's wrong with your computer and they'll you call that number, it might look like an official phone number, and they'll tell you your account's been hacked.

And in order to save your make sure your money doesn't get lost, we're going to have you take all your money out of your bank account and put it into a safe, blockchain type secure account. Again, it's using that fear to get people going.

So my thing for folks, if you start feeling scared or really torn, just stop, call a family Member, call the Police Department, whatever the case may be. Again, during the holidays, Arp did a survey. Nine in 10 people have been exposed to a holiday scam.

Whether it's a fake text message or an email, again, it's just going to proliferate. So again, calling it an epidemic is probably too light. Quickly. I'm going to move quickly. Sorry. One of the things that we're seeing, going to speak to and appreciate that Coin Flip 's going to be here, not specific to them.

The challenge with fraudsters is they use all the different scam techniques that they have. It used to be and maybe still is gift cards, money orders. I've heard gold. Well, cryptocurrency is a big one that people use now. So here in Hawaii, there was in 202464 complaints totaling. $922,000. Again, probably a good portion of that.

And the key piece there is to talk is seeing that the number of complaints have almost doubled in a year. So imagine what happens if we don't do anything. So with cryptocurrency ATMs, the ATMs themselves is not aren't the bad actors, but they use scammers, use that as a way to separate people very easily from their resources.

So again, one of the key things that we're looking at and look to you, Sher Matayoshi, is looking at what cryptocurrency ATMs do they look like regular ATMs. In fact, some of them are ATMs as well as Bitcoin ATMs. And this piece there is that it's. There's no friction. What we call friction.

Like, even when you would purchase, say, gift cards, you're still having to pay a tell, you know, Cashier or whichever money order you're dealing with someone cryptocurrency ATMs. It's just you and that atmosphere. So I'm going to show a brief clip because I know we're running late, and I'll just.

Chances are you've walked by one of these Bitcoin ATMs. AARP estimates there are more than 45,000 of these machines across the country. And this morning we found that they've increasingly become a tool of sophisticated criminal networks trying to separate Americans from their money. Hello. She's at $23,000. Where's she at right now?

You're watching a cryptocurrency scam caught in real time. Can I talk to you For a second, please. I have to bank on the phone. Okay, Let me talk to who you're talking to on the bank. I'm in danger. Okay? Stop putting money in there.

Fran Bates is loading tens of thousands of dollars of her life savings into something called a bitcoin ATM. This is the security team, so no, you're not. And is one click away from losing it all. Don't click. I'm done. Do not click anything.

Over the course of two days, a scammer convinced the 85 year old her bank account had been hacked and she needed to put her money into a machine she'd never seen before for safety. That seems so hard to believe.

I know. And you think if you had to listen to it, you would wonder what's going on with that woman. Does, doesn't she realize what they're doing to her? No, you don't.

It's a horrible, horrible experience. Fran is just one of dozens of victims ABC News and our owned television stations have found whose scams ended at a bitcoin ATM, a machine popular.

So again, in that, in that situation, right, the woman looked like someone who would probably make really good business decisions, but again was given the impression that her life savings in her bank account was going to be jeopardized and that she needed to.

And if you had heard she had already put in $23,000 when someone close by realized what she was doing.

I've heard situations where someone, again, a salesperson or someone in the establishment maybe didn't realize what was happening and saw an older person putting in money and offered to give them a chair so they could sit while they're feeding in the money. Again not realizing perhaps that it was a scam.

The truth of the matter is Kupuna overwhelmingly are the victims of these scams. And the reason we think again. The Bitcoin ATMs or whatever you want to call them, the cryptocurrency kiosks aren't the bad actor, but the truth is they're utilizing that ability to get that. So again, if you don't know, this says 1,000.

I think we were actually looking at 2,000. And then here's the number of ATMs. This is double what it was last year. The number of ATMs here in Hawaii has doubled. Again, my sense is it's because it's very lucrative. For, you know, those using it, but also for the cryptocurrency kiosk operators.

There's a good amount of money as part of the transaction. There's nothing Wrong with that, with making money. Here's some of the things that ARP is recommending with regards to cryptocurrency. ATMs limiting transactions, refunds, live consumer operators, a number that law enforcement can actually call and get a hold of someone within the company to address the issue.

So just a lot of information there and I hope I'm not running too long. So one of the things you talked about, who can they call? Fraud Watch Network. Arp has Fraud Watch Network.

We have volunteers who are trained, they'll take your call, help you right there and then look at what you need to do, whether it's freeze your credit, who to contact. The other thing is if you sign up for the Fraud Watch Network, they will actually let you know what scams are currently prevalent in the community you're in.

So please call Fraud Watch Network.

Do you have to be AARP Member to access these?

You don't have to be an ARP Member, you don't have to be 60 plus. I will stop sharing my screen.

Thank you. And coin Flip will be coming up shortly. But you mentioned two pieces of legislation there. One is to limit the amount of money that someone can purchase in Bitcoin per day. I think it was 2000 in my Committee last year. I changed it to 1000. I'll also be introducing legislation to make that number zero.

So that you cannot purchase money purchase Bitcoin through an ATM at all. You can withdraw money if you want, if you already have it in crypto, but you cannot purchase money purchase crypto through an ATM.

Coin Flip also has an interesting Proposition that they'll talk about, I'm sure, where there's a single wallet system which gives a little more control over me not being able to put money in someone else's wallet associated with them. But I'll let them deal with that. Are there any questions from the Committee for Arp?

Do you mind? Yeah. Okay. So you mentioned like the woman in this situation, she got a call from her bank. I would imagine if I got a call from my bank and if I bank locally, I would go to the teller of my bank. Right.

So is part of the problem too that there's all this online, non local online banks that people are. Is that part of it too?

Well, the challenge is scammers can spoof a phone number. So they can use an 808 phone number or even make it look like they're using an official phone number and. Or you can have the impression they can have a website that looks very much like your. The website of your banking institution.

The issue is to basically look on your card or whatever it is that shows you a phone number that's not, you know, from that fake site to call your bank directly. Again, it's really rare that you might hear from that.

But the other thing that banks have done and you're going to hear from them is as much as possible, it's training the tellers. I've heard of scams where tellers actually were able to stop the scam before it could move forward. That's obviously doesn't happen all the time. Yeah. So people have lost.

I've heard stories, you know, I wish that people would come forward. You asked us to have real stories. The fact is people are too embarrassed to say they've been scammed. I know of someone who's law, who, whose wife's aunt lost 30,000 in a Bitcoin kiosk scam here in Hawaii. So.

But again, it's hard for them to come forward.

And as I told you, I had a. I had a client who we were trying to Protect who gave $2.2 million to scammers overseas. And this was years ago, so this has been going on a long time. Back then it was a green.card scam.

But again, with sophistication, people can lose a lot of money, especially if they're willing to do mortgages on mortgages on their house or reverse mortgages.

And the other thing I'll just add to that is they also are great at utilizing whatever's in the news. One of the things we were very worried about was when there are issues related to Social Security, people start getting calls and scams related to that Medicare enrollment.

They'll use those opportunities that seem real because it's happening at that time and that that's an issue. So anyway, just for people to keep in mind, it's, it's, it's just challenging, difficult.

Thank you. Thank you. Great point. Flip. They're. They're joining us virtually.

Good morning, everyone. My name is John Turk. I'm the Director of Government Affairs with Coin Flip. I'm in Wisconsin, where the high is going to be 11 degrees tomorrow. So you have no idea how much I'd prefer to be there with you doing this in person rather than online.

First of all, I appreciate everything the ARP just said. We've worked well with the ARP across the country as we work to implement some positive consumer protection legislation surrounding our product. We've passed several good pieces of legislation over the last year and look forward to doing that here in Hawaii as well.

I will open up my PowerPoint real quick and I know I shared a lot of slides. I'm not going to go over all of them in the for the sake of time.

At the end of the slideshow, there are a bunch of slides related to what a kiosk transaction looks like on a coin flip kiosk, which we can either do if, if there's interest or, you know, you can just look at those slides. So like the example in the ARP legislation, this is what our kiosks look like.

Pretty standard kiosk looking machine.

Can you share screen? Can you share screen?

Oh, am I not doing that? Sorry.

There we go. Okay, these are our kiosks. What they look like. Are you seeing that now? Okay, yeah. These are our machines and what they look like. We're on slide three. Okay. So we serve about 3,000 customers in Hawaii. We have 6,000 locations worldwide.

We operate in 10 countries here in the U.S. we're in 49 states as well as Puerto Rico. And maybe surprised to know, I was surprised when I heard this stat when I joined the company. But 30 already, 30% of Americans already own cryptocurrency, so it is definitely expanding in the market.

And our product, we have several lines of business, but this is our main product, the kiosk. And it gives consumers a safe and convenient way to buy cash. Buy bitcoin with cash.

That's important because when our company was founded in 2015, typical tech company, startup, four friends at Northwestern University in the dorm room came up with this idea. At the time, the only way to buy cryptocurrency with cash was you meet somebody in a parking lot essentially, and very unsafe. No reporting to the Federal Government on any transactions.

And yeah, just very personally unsafe. So they came up with this company to tackle that issue. And in addition, they thought of our CEOs MOP, who despite the, you know, growth of online banking, she still prefers to go to a branch, use ATMs, write out physical checks.

She likes the physical nature of the financial services products in that sense. And this gives kind of brings the cryptocurrency world to the physical world. So when you're at our transaction, at our kiosk, making a transaction, safety is our number one priority.

So you will see several scam warning screens before you even are able to process your transaction. It's transparent. All of our disclosures are there, fees fully displayed. It's very quick to get your crypto to your wallet. And it's reliable. We have, we offer us 24/7 live US based customer service.

Our customer service agents are trained twice a year in anti money laundering.

Sorry to interrupt you. I was hoping you could talk more generally about crypto ATMs, not specifically what coin flip is doing, although I do appreciate the steps you folks are taking to minimize it. But maybe we could talk more.

Sure, yeah. Well, I guess to start with, for regulatory purposes. A, you have to register with the Federal Government Financial Crimes Enforcement Network when you are doing about $1000 per day in volume as a money service business.

So any reasonably sized cryptocurrency kiosk company would have to register with the Federal Government as a money service business. Once you register as a money service business, you are required to follow the rules and regulations of the Bank Secrecy act and the USA Patriot Act just like every other financial institution.

What that means is we have to file suspicious activity reports, we have to file currency transaction reports and have robust compliance controls put in place. In addition to our federal regulations, Coin Flip applies for money transmitter licenses in every jurisdiction that we operate in. To date, we have been given 38 money transmitters. That's 36 cents.

States plus the District of Columbia and Puerto Rico have granted us money transmitter licenses of the other states, seven of them are like Hawaii where we do not fall under the definition of qualifying for a money transmitter license. Based on current statutory language.

And so that's one of the things that we would like to, to work on in legislation here in. Hawaii. Additionally, not only do our customers use our kiosk here, but we also pay our host Bill businesses and monthly rent to host the kiosk in their businesses. That's a steady stream of income for, for the hosts in Hawaii.

And we've paid over $200,000 in revenue to those hosts at our locations. So this is how we protect consumers of the kiosk. I would say the other big operators do similar practices.

I would say part of the reason why we are going state to state and passing important regulations, many of which the Arp listed on one of their last slides that we agree with as well. I don't know if you're switching them. Well, we'll just, I'll just stop sharing.

I know I sent my slides over and we can just go that way. We agree with a lot of the proposals of the Arp on one of their last slides they shared there.

And one of the reasons that we're going state by state doing this is because there are frankly a lot of smaller operators that do not comply with what they should be doing. And one of the reasons is it's very expensive to have a robust compliance program.

So you know, we have here at Coin Flip, we do risk assessments and audits, we have automated case management, we do transaction monitoring. We have a robust anti money laundering program. We utilize blockchain analytics, which is one of the things that Arp mentioned in their list of proposed legislation.

And those are all important because that protects the consumer. So blockchain analytics, when you scan your cryptocurrency wallet at our kiosk to get the crypto put into your wallet on the back end, that is scanning that wallet to see it's ever been associated with any scams, criminal Activity or sanctioned by any foreign government.

And if that's the case, then that transaction shut down and it's not completed. Chair Mario she had mentioned what we call wallet pinning. That is tying one wallet to one bank, to one account at our of our customers, so that a wallet cannot be shared between anyone else other than that person that set up an account.

With our company. And it's to the point where we do not allow spouses to share one wallet. We will shut down and blacklist your wallet from our account if we. Learn that you're sharing it, even just between spouses. So that's how detailed the wallet painting goes into.

So one of the questions we often get is, why does anyone use our product? Well, you know, I'm not somebody that uses a lot of cash, but there are still a lot of people in this world that use cash as their regular means of buying things. And machines like ours are the only way that you can.

Access the cryptocurrency market with cash. People are hesitant to connect their bank account to an online platform. For one, these are hacked all the time and your information can be put out there. But two, we saw when FTX collapsed, they were literally taking money out of customers wallets to help pop Prop up their business.

When you're using a cryptocurrency kiosk to buy your crypto, it is sent to your wallet, and we never have access to that wallet. If coin flip were to unfortunately go bankrupt tomorrow and go out of business, your crypto is safe. We literally cannot access that. So there's just a few of the reasons why people use our machine.

Happy to answer any of the questions about that or walk you through what a transaction would look like.

Like, okay, thank you Members. We have any brief questions, go ahead.

So if, if somebody like we saw in the video earlier started feeding cash from the ATM into the Bitcoin ATM.

Yeah.

Would you keep a record when you, when you service your machines, you're like, wow, there's a lot of cash in here. Where did all this cash go? And if the FBI is investigating, would you be able to, are you allowed to then share the information of who it went to?

Yes. So we, we have to file suspicious activity reports just like banks do for transactions over $2,000. And then we file currency transaction reports for transactions over $10,000, just like banks do. So yes, we keep logs of all transactions and with that, and we work with law enforcement all the time. If there's an issue that they're investigating.

Would you be able to impound that physical money in your ATM for a period of time while it's being investigated. I know that you've already transferred value along the blockchain through some kind of cryptocurrency.

But I'm wondering if there's any kind of recovery mechanism for people who have gotten scammed through ATMs by you holding that physical money and being able to return it to them.

Yeah. So we, regardless of any statutory requirement, we refund fees to any scam victim because we do not want to profit off fees or our profit off scheme. But not the actual money that they put in. Sure. We have agreed to certain refund provisions in state law.

We are the only financial service company that would be required to do any sort of refunds. If you send a wire to a scam scammer at a bank, the bank is under no obligation to refund you that money at either. Just for the record. And but in certain states, especially for new users.

So I would encourage you all to look at what Illinois passed this last session. We us in Arp were very supportive of that law. In Illinois we have that is a seven day new user period and.

Three transactions within that seven day new user period are eligible for a refund if you are a victim of a scam and type of skin.

I'll be honest with you and I've told you this before, but I just don't see cost benefit wise why we need Bitcoin ATMs for this purpose. And I don't see why people I, I would think that most people who want to purchase cryptocurrency have the means to do it online through their phones etc.

It seems like if we're just taking a cost benefit analysis here, the people who are being scammed that the harm being done by those scams vastly outweighs the handful of people who need this kind of specific service of turning cash into cryptocurrency. And I cannot, I just can't see the justification for continuing to allow that practice.

I appreciate that and I think maybe it's good to level set on the amount of scams that we're talking about that we see at our kiosks. And I will stipulate that $1 scammed out of somebody at a kiosk is $1 too many.

But that same FBI report referenced by the AARP representative in their presentation showed less than 3% of all money that was lost via cryptocurrency scams was at a cryptocurrency kiosk. Over 97% was elsewhere on you know, a online portal of some sort.

And then you add in all of the other financial scams that happen which far outweigh all cryptocurrency. Whether you're talking about traditional banks, gift cards, PayPal, Venmo, that's even smaller amount. So this is a new technology. I understand there's a lot of attention on it because we're in communities.

Unlike an exchange where people don't report that to your local community necessarily you're reporting it to an FBI or a statewide investigator. So there's a lot of press related to cryptocurrency kiosks right now. But the amount of scams that we're seeing at them are vastly outweighed by every other financial service product.

That's fair. It's tough too because people don't necessarily report scams.

I. I will share with you that when a scammer called me to try to scam me out of somebody claiming to be a court officer actually from you guys from dle, they directed me to one of your or not, not your, not your crypto ATM in particular, but they directed me to a crypto ATM to pay this fee or fine that I would.

That I owed. So it, they certainly exist and it's alarming I think. Okay, but thank you for being here. Any other questions? Otherwise we should really move on.

My question is, and you touched on it, but I am wondering if you can elaborate on the differences in the processes of redressing victims of fraud when it occurs through your. Kiosks versus another financial institution and maybe Bankers Association can answer that better.

But yeah, yeah, I would leave it to the bankers. I used to work at our state Bankers Association here in Wisconsin, but it's been quite some time, 10 years almost. So I won't. Speak to current banking regulations in particular. But yes, when somebody reports a scam to us, obviously depends on state statute.

Obviously more states are passing law related cryptocurrency kiosk. So it depends on what happens. But our we have a lot of friction in place at our kiosk in particular to hopefully stop that on the front end.

And then we have our customer service that again is trained twice a year in how to handle these calls because we don't want to just stop the transaction because they will just go somewhere else and use some other financial product to send the money to the scammer. We need them to understand that they are being scammed.

So our customer service is trained into helping them further understand that. But if it goes all the way through and they are scammed. We have several different processes in place. We do holds on certain types of transactions, one of which is what we call interstate transactions.

So if an account was created in say California and that account is now doing transactions in Hawaii for the first time, we hold that transaction to ensure that the person that took the selfie and uploaded their ID, their driver's license is the same person that's standing in front of the kiosk.

And if the that person is different and what we often see are scammers will give their accounts to a individual in another state, we can stop that transaction from even going and refund the victim their money.

We also do it for high dollar scams, so anything over $3,000, we confirm that the person that created the account is the same person that's in front of the kiosk.

And then if it does, if the, if it did go through, we also do have a refund policy, like I said, to refund first fees, which again is more than most other financial services companies even do.

And then second, if a state law, many of which that we've supported, have a refund provision, especially for new customers, we refund the full amount of that transaction.

So I have one question to follow up with that. If someone has been scammed, should they call whatever company owns that ATM or is it just too late at that point? How much time do they have to call that ATM to try to remediate?

Zero, you should definitely call the ATM company. I would say. We've had, we've been in testimony in a lot of states across the country on this and I can say almost to a tee, people that were testifying as victims of scams recognized the next day that they made a mistake.

And so we have, that's why we Advocate for a 72 hour new user period because our data shows almost within 48 hours, they for sure know that they made a mistake. So we had another day just to provide a little buffer there. But yes, you should call us, you should call local law enforcement, all the above.

And then we work with local law enforcement or whatever law enforcement agency is investigating.

I second question is, do you have the transaction fee? Do you also, when somebody buys cryptocurrency at your kiosk, are they buying it at a markup?

Yeah. So just like other commodities, it's, it's at a markup? Yes, we charge anywhere from 8 to 18% depending on the location of the kiosk.

And do they get that money refunded or just the transaction?

Yeah, the fees they get refunded? Yes.

Okay, we need to move on HPD. Thank you for being here. Thank you. Everyone. Let's go to HPD.

Here we are. All right, thanks for the invite. I'm Ioana Kehu. I'm a Lieutenant with the Financial Crimes Detail in the Criminal Investigation Division with Honolulu Police Department. So AARP covered a lot of what my presentation was covering on about who gets scammed. A lot of elders, Kupuna.

But we're also seeing that it's not only the elders, it's also younger people. I brought my forensic Auditor here who's keeping track. We've been keeping track of all the stats for all the frauds and scams get reported to HPD over the past year.

And just by age we can look at the average age of people that's being scammed is actually 51 years old, not that old. So it is being seen as more prevalent and out there in the community.

And a lot of what we're seeing is impersonation scams and scams of people pretending to be law enforcement, pretending to be government agents and directing people to pay a lot of money either in gift cards, cryptocurrency or wire transfers for any Tom, Dick and Harry reasons. Hey, you missed jury duty.

It's like, you know, young people don't realize what the penalty is for missing jury duty, so they're just going to go out and dump money into a wire transfer or cryptocurrency. With elderly, we see a lot of fixed income, so they are targeted and they are more likely easily scammed.

But we're also seeing college age individuals looking at rental scams. That's prevalent. We had one this morning that was reported to us where a woman was getting. A rental unit off of Craigslist and it put a down, down payment of $3,600 for her daughters to go to come back to Hawaii and stay in this rental unit.

So even today we saw one professionals targeted via investment scams. We had one yesterday where people are putting a lot of money into an investment and a lot of times it's through cryptocurrency with high rate of return, quick return, and they just get convinced to do this and, you know, make a quick buck.

And it turns out they end up losing a lot more than they, they thought they would make. Some common type of scams. We have romance scams. We had one reported to us last week.

Even romance scams has been something that we've seen in the past, but it's kind of died off because it does take a long time for a suspect to gain the trust of somebody, but in turn, they get a lot of money over, over a period of time.

For those romance scams, we are seeing them more prevalent of rental and real estate scams. That's just easy. They make fake listings. They use pictures from Zillow or they'll go and take pictures off Google Maps or whatever. And they're getting deposits online, and it's gone. We've seen some where it's even.

They're asking for deposits for an application for a rental, and they're doing that off of Facebook Marketplace or Craigslist or something like that. And even though it's a small amount, hey, 30 bucks here, 30 bucks there. They're scamming hundreds of people. And so that quickly builds up. Another more prevalent one is government impersonation. That's huge.

And they spoof numbers. Sorry, AARP covered a lot of that. But they do threat. They do threaten people with warrants of arrest. They say that, hey, units are down the road from your house and they're conducting warrant sweeps and they're going to be coming to your house next.

And don't tell anybody, because if you tell anybody, the warrant out for your arrest is going to be $10,000. But if we can take care of this right now, it'll be $7,000. zero, you don't have that. Okay, $3,000. But it's $3,000 now. But if it's.

If you don't do it right now, it's going to be $10,000 and someone's coming to your house to arrest. And so they get people on the hook on the phone and convince them to stay on the phone with these kind of schemes and tactics, a lot.

Of demand for media people. For one second. I have noticed that a lot of these scammers try to keep you on the phone and don't want you to hang up. Is that kind of a red flag that someone might be trying to scam you? Huge red flag. Trying to.

Huge red flag. Don't tell anyone. Huge red flag. Stay on the line. Huge red flag. If you hang up now, you know I have to tell my supervisor and we have to come and arrest you. Huge red flags. And also that, hey, the government doesn't take money from cryptocurrency gift cards or wire transfers for warrant arrest.

Yeah. The other thing is what people will see with the cryptocurrency scams. At the cryptocurrency ATM, if someone says, I'll stay on the line with you and walk you through the ATM as you're using it, that's likely a scam as well.

Yeah. So the scammers know that they got the person on the hook when the scammer is saying, you know what, we're going to hang up. If you're not going to take care of this, we're going to hang up on you and we're just going to send someone to your house to arrest you. zero, no, wait, wait, wait.

I'll go, I'll go, I'll go to Safeway. No. Or wherever the ATM may be. So there's a lot of urgency today only. You're going to be arrested. Don't tell anybody. An authority with fake badges. You know, I pulled up the HPD badge in my PowerPoint. I pulled that off of our website.

So anybody can take that and put it on anybody's website. So, you know, getting, you know, just having a government logo or anything like that is not, you know, it's not legitimate anymore because you can pull it off of the Internet. But yeah, we talked about frictionless payments with cryptocurrency and stuff.

And some tools that we would like to see is how to make that a little bit more difficult, add some more friction to conducting those transactions. We have some case examples. You know, we had grandson in jail and somebody calls claiming to be their grandson and hey, wire $15,000 for bail. And they were in Indonesia. Again.

They're doing it quickly. Hey, I need bail money now, now, now. Or else, you know, they're not going to bail me out or I'm going to get caned. You know, crypto, ATM, government scams, we went over that, too. A lot of pressure to deposit a lot of money.

So some challenges that we see as a law enforcement agency, the scammers operate overseas. Payments are on crypto. A lot of multi jurisdictional banking. Banking issues that we have to deal with. And also victims don't always report it in a timely manner or sometimes not at all. Sometimes they're too embarrassed to report it.

So if we can get people to report it, we, you know, at least we can help, you know, funnel them to the correct federal website where they can report it.

And the United States Secret Service can look into it, the FBI can look into it, because those are the two federal agencies that can look into cryptocurrency theft and put holds on those money.

So should they be. If someone's been scammed, should they be dialing 911 as soon as they. As soon as possible, or is there a period of time where they should be turning to a different resource rather than both?

Okay, so they should call 911 as soon as they think that they're scammed. And sometimes it's a family Member that calls 911 on behalf of a family Member, family Member that's being scammed. And that's fine. We've also had adult protective services reach out to us.

We've also had banks, you know, fax us saying, hey, you know, this person just pulled out $20,000. Can you go to their house and check on them? Like, what's going on with this? So we do have those in place, but we would like to see that 911 report.

And, you know, either patrol officer come to your house or you come to the police station, any of the police stations and make that report. It also helps us with tracking because we've been keeping tracks of these scams and you're going to see just the dollar amounts is kind of staggering.

With just what we've been tracking in. Hpd, is there a time when it's too late? If I got scammed a year ago, should I still call 911?

Yeah, you should still call 911 and we can still help you out. Even though you may not get the money back. At least let us or give us the information. Maybe we can help stop somebody else from being scammed is what we'll always tell people. That's great.

These are very time consuming investigations, but where the legislative opportunities, you know, supporting statewide fraud and reporting data sharing platforms, you know, outside of just what HPD has, I don't know what the other counties have. So there's no real connectivity between the other counties.

I'm not sure if there's connectivity yet with the state on what we're going to do with regards to reporting on fraud and keeping track of all of that, the crypto ATMs, there's got to be some friction.

And one of the things we're probably suggesting is some kind of signage on ATMs, signage on bank ATMs about withdrawing a lot of money and signage on crypto ATMs about depositing a lot of money. You know, hey, red flags. What are the red flags and what to look out for?

I don't know if there, if it's possible to have banks adopt cooling off periods for high risk transfers. But another thing, just education, just reaching out to the doe, uh, or any of the private schools, looking more at high school level. Students and educating them on what red flags to look out for with regards to these scams.

Because we are seeing college age students, people in their 20s, making police reports that they've been scammed. And it's simple things that they could have just avoided. It's like, no, don't go buy a bunch of gift cards.

Don't drain your bank account on gift cards and then take pictures of those gift card numbers and send it to someone. You have no idea who you know. And they're 23 years old. It's like, no. So early education is really going to help.

I know we try to harken on the elderly, but it's not only the elderly anymore. But you know, Kupuna focused outreach programs, social media based scam monitoring. I don't know about the strengthening penalties for impersonating government agencies because we're not at this point, we're not in the, we're not really in the realm of prosecution of the scammers.

A lot of them are out of our jurisdiction, state jurisdiction, even. So if we can reduce the victimization through prevention and prevent people from spending all that money or losing all that money or being scammed, that would be great. Slowing down the payments and the financial decisions of people.

The slower we can make it for the victim to actually conduct that payment, the higher likelihood they are of not making that payment and the more frustrated the scammers.

If you can keep scanner on or a scammer on the phone, the longer you keep them on the phone, the less likely they are to be scamming someone else even.

I've had it where scammers called me and I'm like, I pretend to be an old person I for an hour because I know the hour that I'm talking to them they're not scamming somebody else. And it's fun sometimes.

Reporting early to HPD as soon as you know you're scammed or as soon as a family Member, you know, a family Member is, has been scammed, letting them report or pushing them to make that report. HPD now has or we've had it for a while but online reporting.

So you can go to our website, HonoluluPd.org and file reports or you can set up an appointment online and someone will call you back to actually make that report. So you don't even have to go to the station.

Should we be reporting scam attempts?

Yes, scam attempts, absolutely. Because we'll just log it down as like an attempted theft called 911 for.

That or I mean no one hesitant to call 911 unless it's a true right.

So 911 non emergency or go down to one of the stations or more conveniently go online on to go ahead and file a Police report.

And then if somebody, you know, as somebody just mentioned people realize within 24 hours that they were scammed and they just, let's say fed the bitcoin ATM kiosk. If they realize that like within six hours, they go back to that kiosk and whoever the store attendant is. Has this kiosk been serviced?

No, my money is still in there. That's evidence. Would you guys actually confiscate the machine? No. Knowing that there it hasn't been serviced, their cash is in there as evidence, you wouldn't be able to confiscate that machine?

No, that has not come up. We have now looked at seizing any kind of ATM for that kind of crime because even though the crime is committed at the ATM, it the, the cash has turned into cryptocurrency and it's sent off. So just seizing the ATM. It'S not necessarily going to help.

Maybe at a legislative level that could be something in the future to look towards. Hey, are we allowed to seize ATMs? But then you're also looking at storing that ATM for months, if not years. So the ATM or the crypto ATM company is going to be losing out on that ATM too. So. It'S a really good.

Brain thought to think about and dissect. How can we do that? How can we seize an ATM if someone's putting in money as a scab.

It would be more impounding the actual money in there. Maybe not seizing the ATM but requiring an impoundment of. Right, but you're 20,000.

So we're also impounding somebody else's property.

So actually I don't think it'd be you guys. I think it would be on us to regulate the cryptocurrency companies to say you cannot release that $23,000 that is in there.

You can take the rest of it, you know, but anything that's subject to a scam that was fed in that they're clearly tracking should be held for a period of time. And maybe make that a bounty for another info briefing though, I think. But thank you.

Great idea. I like that idea. I mean if we can stop it by seizing the ATM, it may put the onus on the owners of the ATMs, the ATM machine companies, to really put regulations or signage in place to stop that or else your ATM is going to get seized. I like the signage idea. Beautiful.

We're going to. Are you done or should we move on? Put our website up there. And the last slide I wanted to get to was the dollar amount from 2025, only 222 cases. $7.6 million in losses. That's just the reported losses. That's just reported losses scratching the surface. And that's only for one year, so.

And what we haven't put up there is the average age of victims is 51.

Thank you for your presentation. Great presentation for the other presenters too. If kind of do what he did. If someone's already talked about it, the scam, you can either glaze by it or if you have something to add, please do. But a lot of, a lot of the presenters will have doubled up info.

So I don't want to take too much time. Thank you very much for being here. Next up is Hawaii Bankers Association.

Great, thank you. Chair Matayoshi, Committee Members. I'm Linda Izuku with Hawaii Bankers Association and I'm going to get my deck. It's saying I can't share. Sorry. How do I stop steal it here. Okay, here we go. Is this presenting? Okay. Okay, great. Okay.

So I'm with Hawaii Bakers Association and I also have Jolie Chung here from First Wine Bank. She also has a background in consumer protection and Senior Vice President at First Wine Bank as our subject matter expert. So she can answer a lot of the detailed questions around holds and regulations and the mechanics of protecting our consumer deposits.

So we wanted to share a little bit. We won't cover what is covered because there's some duplication but we wanted to go through impact of Hawaii top fraud scams, some tips which I think is most important of trying to stop and to prevent and then what to do in case you suspect fraud.

So I'm going to turn over to. Jolie and then I'll wrap it up.

Thank you again. My name is Jolee Chung. I'm Senior Vice President at First Wine Bank. So I do oversee the fraud program at First Wine Bank as well as operational risk there. Prior to that I was managing in bank secrecy act in the bsa. So also familiar with aml.

So what we did want to point out to here is the population as mentioned. This is specific to Hawaii as reported by FTC in 2024. What is notable about this is this number is only a drop in the bucket because most victims of this age do not report. And that's what's really scary about this. The top scan.

Sorry, how much was that number? It was real small.

The total loss right there is $3,000,777 $44 for that age range. Right. And that's for just last year or is that. Yes2024. So it's very, it's a drop in the bucket of what's being. What we're seeing is their median loss higher than the other age groups.

Yes, it always will be because they have more money to lose. Right. We all know as a college student we don't have much money so we're not losing very much. So we do see the number of reports significantly higher with the younger age. The number of loss, the value is higher in the older ages.

Mention the top scams that we see. This actually is what we're seeing in the bank and in the financial industry as well. Financial scam, investment scams. For each scam that I go over, I will not reiterate what they say, but I'll just pull out some keynotes that I think the takeaway should be for our audience.

So for the investment scams that we talked about, the real things that you want to look at is that these are unsolicited offers. These are offers that are coming out of nowhere.

It may be from people that you know or do not know because they will take the form of somebody else and they will portray that they are somebody else and that payments will be in an unusual form. So it will not be your typical wires. Ach, it will usually be some crypto and more recently gift cards.

When we're talking about gift cards and to our audience we want to explain that we're not actually physically mailing those gift cards. The way that they transfer money is they read the back of the PIN numbers or the numbers on the back of it.

It's the easiest way to transfer any money because you don't have to actually do anything except use a technique they send to text those numbers or they can just convey it over the telephone. That's all they.

For the financial services impersonation, the thing that we want to make sure that our customers are aware of is that these are unsolicited calls, emails or text messages. They are strongly advised do not click on any messages in your text. Do not click on any messages or pop ups on your screen, on your computer.

And a lot of these messages are going to be asking for confidential information. So they're going to be asking for your email address. Bless you. They're going to be asking for your email address, your login passwords. They're going to ask for very sensitive information that no banks would ever ask.

We are never going to ask you for your account numbers, your passwords, your Social Security numbers, nothing like that. And those are the Kind of questions that these impersonators are asking for. For the romance scam. What we are seeing here is that a lot of the fraudsters are trolling our senior romance sites.

So I think there is Sea of Fish is one those that are dedicated to senior population or audience. And that's because we understand that they're looking for companionship. They also have the means, like we said, the older they are, the more money that they have exposed. But they are trolling these senior sites specific to pick up somebody.

They also are going to ask for money transfers through wires, gift cards and cryptos. And usually the total sign for this is they're asking for the money to be sent to a third person. So if I'm in a relationship, for example, with Kim, I ask, I'm going to then just ask.

Kim's gonna ask me, can you send it to my sister Linda? And that's that third party that makes it. We start seeing that trend as a red flag that is involved in a romance scam. I did wanna highlight that one thing that we are seeing an uptick in on the romance scam.

And this is actually spans all age populations, but more so in the elderly is now it's going into sextortion. So romance scams will lead into send me some provocative or nude photos and then they end up using those photos against the elderly to say, you do not want me to expose it. You need to give me money.

And that kind of leads into the whole companionship that they're looking for. They think they're in a real relationship and will do anything for them. Tech support. This is probably our biggest at the bank that we see victims falling to.

And this is the red flags is that you will see pop up messages on their screen and we again advise them, do not click on that and do not download. Those are the two things that fraudsters really need is they need you to click onto that link and then they need you to download what they sent you.

That download that you're doing gives them remote access into your computer that allows them to copy the code. They don't even have to. You don't have to tell them what your passwords are. But by downloading that driver, you are then giving them control to see everything on your site, on your computer.

So even when you shut your computer down, as long as they have that captured, they can go into your bank account and steal the money. And then you have account takeovers. They can change your password into your logins, into your bank account, changing your email. They can do all that and you would never know.

So it's those two components. Do not click on the link and do not download or app or they'll ask you, can you download this, this driver?

I'm assuming they can steal passwords that you've saved for convenience on your browser.

And things like that too, because now it's in your system once you've downloaded that. I'm not sure if anyone has had it, that we have IT internal support. So when I and I'm not IT savvy at all, so I call our IT Department, they'll say, can I network into your computer? I'm like, sure.

And I see my mouse moving. That's essentially what they're asking you to do, is to download something where they can just sweep your computer. But it's those two things that we strongly urge people do not do.

And this happened to my father and you know, in a different state. And it's interesting because then when you're trying to have recourse and to research. It's perceived that he was acting on behalf of his IP address. Correct. But in fact it was this other player that he didn't know that was actually access to everything. It's crazy.

And the last one that we see is mentioned by law enforcement as well as AARP is the government impersonations. And these are threats for legal action. And again, the unusual red flag here would be demand for immediate payments. And payments will be cash, check, cashapp, ach or wires.

What we have seen several instances here, which is scary, is that we've heard of customers actually meeting people in parking lots. So it's not just limited to overseas suspects, but they're actually meeting them here. And transferring cash.

So all of this red flags, and I know it's a lot, and because all of us are relatively close to it, we know these terminologies and we can kind of really spot the red flags. But most, I would say your average banker, especially those that are older, they may not be as seasoned to identify this.

So what we try to express and train our tellers and everyone at the bank at First Wine Bank is we have an initiative to really foster a culture of risk, aware of fraud awareness.

It's been my initiative to really drive home with our employees that we cannot offer services or products to customers or without recognizing the risks that come with it. Example, online banking provides a wonderful tool to everyone.

But to turning that tool over to someone who may not be technically savvy could be very harmful to them, despite the benefits. So we have actually Made it a point that when we're offering services and products that we're giving, we're educating our customers about it.

That when you get online banking, nobody's going to ask you for your password. If anybody does, hang up the phone. That's something that at first one, we really want to press upon. Because our strongest line of defense, unfortunately, is education. It oversees any kind of systematic process. It's education.

But the weakest defense or the weakest aspect or weakest link in this fraud is customer performance. Meaning because we can't control what the customers do. Right. So all fraud, again, is based on trust and fear. We have to keep that in mind.

And what I've created is an acronym for the way I made it easy when I explained it to customers or when I explained it to the branch is if you don't remember anything that was said that I said, please remember this. If you need to determine if you are being scammed, remember tips. That's it. Tips, tips.

Okay, the first one is threats is the communication that was presented to you, threatening in any way. If you don't do this, you're going to jail. If you don't do this, we're going to expose X, Y and Z. If it's threatening in any matter, I tell my customers, I'm giving you the authority to hang up immediately.

Do not talk any further. The second is I. It's immediate. So if you receive a form of communication that is saying, if you don't do this, you will lose out on this opportunity. If you don't give me the money now, your son's going to go to jail.

If you don't do this now, you know so and so is going to die on life support. Immediate, lightly, a fraud, hang up the phone. P is promise. If you're having a conversation and someone is promising you that if you give this, I promise you will get this great investment return.

Property in Asia, a large crypto, large bank account, whatever, any type of promise, hang up the phone. And the last one is secret. And this is the key. If anyone is communicating with you and tells you, you cannot tell anyone, whether it be law enforcement, the bank, loved ones or family, because one, they won't believe you.

Two, they'll steal your money. Or three, they will think that we're not in love and they'll never believe you, that is a fraud. So anytime you see any of these, we empower our customers to hang up to, you know, if you have any questions.

And if after you hang up, you still really think it's a good opportunity or it's the truth to contact the information that you are, that you have independent of that. So call the bank, look at the back of your credit card, look at a statement. Don't call the number that they call from the email.

Don't call the numbers and information that's in the email. Call the number that you are aware of. Law enforcement, call 911. Hey, someone just said that I owe money and you're going to come to my house. They can help you that so hang up the phone.

You have doubt, call the number that is listed in a public forum to confirm any of your questions.

Great, thank you. Okay, just a few more slides. So we also Hawaii Bankers Association is part of the American Bankers Association and we have a lot of national resources, banks never ask that and national campaigns to educate and to really foster prevention.

So we also have a handout that will list some of these resources for everyone as well. We're also launching this week a holiday fraud campaign on social media to highlight some of the ways that, you know, fraud happens during the holidays, which increases in frequency, as many have said.

So we created this campaign ourselves and are launching it through social this week. What to do? Many people have already talked but I think you wanted me to talk about, well, when is it too late? Late. We don't believe if it, if it's a bank transaction that happened that you suspect there was fraud, call immediately.

If you remotely think, call immediately, your bankers are there to support you and to protect deposits. That's our number one concern, is to ensure trust and protect deposits. Right. So immediately respond is really, really important. Important. We have a resource that we can distribute after we can share the tips as well. There's a lot that we're doing.

We care deeply about this. This costs, you know, our industry a lot as well as others. And this is a global issue. We're trying to, through our advocacy at the national level, address this on telecoms and social media platforms.

And there's just so many stakeholders here that we are thankful for your focus and the opportunity today and want to continue the conversation.

So obviously they should call you immediately. Call 911-there-there are things that you can do immediately. From the bank's perspective, though, I'm wondering what the timeline is to get any kind of recourse is if 24 hours have already passed, is the money gone? If 10 minutes have already passed, is the money gone?

What kind of timeline is there for any kind of recovery? If there's going to be any kind of recovery through the bank.

Sure. So there are. That's a loaded question because it really depends on the channel in which the transaction was performed as well as. The timing of your transaction that you perform the transaction. So checks, for example, have governing regs. If you sent a check, there's a certain time period that you can, you can recall it.

Ach transaction, there's a different reg. Buyers, there's a different reg. If you're a consumer versus a business, there's different regs. Online banking versus in person, there's different banks that cover as to your recourse. Additionally, if different banks will process files, transaction files, different times of day.

So if you perform something at 8 o' clock in the morning and you realize at 9 o' clock I made a mistake, that transaction may not have left the bank and we can easily cancel it. However, if you did it at 8:55 and the job is at 9 o', clock, it may have left already.

For certain types of transactions or any type of fraud that comes through us, we will try to. We will always work within our regulatory requirements, but we will try to work with the counterparty bank to get your recourse for certain transactions.

The counterparty bank doesn't have any obligation to return it, but a lot of times they will return because it's reciprocal. They'll return what's remaining in the account. So if you sent a million and already 500,000 went out, we might be able to retrieve 500,000. But that's why it's imperative that you called as soon as possible.

So, I mean, I think the point I'm trying to make too is that there is still hope. If you've been scammed. There's a lot of regulations. You guys can help them sort through them. But don't think that if you've been scammed and the money's out of your account that it's too late. They should call immediately.

There may be something you could still do for them.

Absolutely. And with, especially with wires and that go international. There is a legal arm that Homeland Security and Secret Service does within a. I believe it's 72 hours and 75,000 that is lost. They actually will do a quick action and try to stop that through internationals.

Doesn't mean that we might be able to get all of it, but that's the best chance that we have to get some.

That's great to know. Any questions from the. Thank you. Can you D Technology or D Online banking your account? Like if I had an elderly parent at this point, I would be like go old school. Just if you need some cash, go to the teller, show your ID. No more ATM, no more, no online banking.

So can you do technology, all of this stuff once?

Yeah, a customer can always De enroll. You have to work with the banks. I mean, I would say I don't know all banks. I could say these are banks you could De enroll if that's the right word into online banking. Online banking does provide a valid service.

It's really just empowering the population as to how to use it. And I think it's something that they can use. You know, elderly can use it. If you see that they can check text messages now they have that utilization. They have the ability to manage it, but they have to be educated on how to manage it.

I think that's the difference. Right. So we try to do our best to explain it, but again there's only so much that we can do. At the same time, a lot of elderly's want that independent. They don't want you to tell them you can't bank on them.

They want to be able to be independent and get access to their money. But that's where you have that friction, right. Is because we have to make sure that we're pressing enough to get to educate them but not stalking them completely because then we lose business. Right.

Because nobody wants to be told how they can spend their money or where they can send it. Right. So we have to be really mindful about what restrictions we put around that.

Honestly, that might be where the state comes in. What I was talking to Linda about earlier, if the state makes all the banks create friction, you can just blame us. You can say, no, it's not us trying to stop you from getting your money, it's the state that's requiring it because xyz.

But that might be a way for an opportunity for us as the state to step in to create that friction on a statewide all banking level and then not have you folks take the blame. I know First Hawaiian Bank creates a lot of friction and bank of Hawaii or another bank doesn't.

They might go to the other bank. But if it's uniform and it's our fault, then maybe that gives you guys some coverage and maybe could stop some scams. I know you don't friction.

But we have a lot of friction already. Yeah, there's a lot. So we uniformly do through our federal rigor. Right. And constraints. So I wouldn't say there's no friction. And First Hawaiian's policies are very similar to the other financial institutions and credit Unions.

Would you guys be willing to. On your ATMs foot, what HPD suggested put some notice on it for the tips kind of, you know, your. Your acronym on there. Of alerting people that a scam might be happening. I mean, that might be a great way to at least put it on ATMs.

To create a little bit of not, maybe not friction, but alert.

We're willing to look at anything that would support, you know, the prevention of fraud. So we'll have to look at that.

Thank you.

Yeah.

Also along those lines, the ATM questions, when you're logging in, it could be like. Have you been asked to withdraw right now? You know what I mean? It's just a simple even click. Could cause a stumble. But regarding. Okay, credit cards. So I've experienced my credit card credit limit going up without it asking me.

Do you want to. It just went up. And so I have to call and I keep a really low credit limit because of fraud. Like, I'm afraid of fraud. And so if I want to make a big purchase, I'll actually upload cash or upload money and then whatever.

But I mean, so even just increasing people's credit limits without asking.

Yes.

Creates.

So that. Yes, I agree with you. And that is. That is actually a flow fraud attribute that we look at the bank. So we are looking. We look at our customer segments and we'll analyze their limits because that does reduce the fraud risk. I would agree. And we do that regularly on loans.

So it's not only a credit risk, but it's also a fraud risk. We control your limits for that. There are a lot of. We train this to our tellers that they can ask the customers. Right. When you're getting loans or lines or opening a deposit or doing withdrawals, are you doing this because someone asked you to?

If someone threaten you, it's kind of the same thing. Did someone threaten you? Did someone tell, you need to do this now? Did someone promise you something? Are you doing this because someone's asking you to keep it a secret? You don't got to tell me what the secret is, but they're trained to, kind of.

So our tellers do a really good job as well as the bankers. We do have systems in place. But what we have to press upon everybody, employees and customers, is that you cannot rely on the system.

You have to be able to take responsibility and do due diligence on your own, whether a consumer or a business, to analyze what is being said to you. Apply this TIPS methodology. Right. And then make a decision and go for it. That's really what we try to get across to people. You can't rely on one silver bullet.

Let's move on, though. We're gonna run out of time. DCCA.

Yeah. Thank you. Mana Moriarty, Executive Director, Office of Consumer Protection with the Department of Commerce and Consumer Affairs. Wanted to thank you and talk today a little bit about particular predatory practices in the home solar system industry.

And this is something very close to home for a lot of people. HECO reported recently that there were 118,841 rooftop solar installations in the third quarter this year. We're talking about a significant part of our economy and a significant financial decision for a lot of people.

And because the federal tax credits for residential owned solar systems and owned battery storage solar systems are expiring at the end of 2025, our office expects that an uptick in high pressure sales tactics will be seen or has already been seen by a lot of Hawaii residents.

Solar system companies are targeting Hawaii homeowners for sales, including low to moderate income homeowners and non English proficient homeowners. Companies may exaggerate the benefits of installing a solar system and fail to disclose the risks, including the risk of losing your home if you can't make payments on a loan that you take out for your system.

We are encouraging all Hawaii residents to report any deceptive or misleading sales tactics or other issues with home solar companies to the Office of Consumer Protection. Should they dial 911.

Typically, it depends on the status of what they've done.

Okay, that's a fair answer. Depends.

Yeah. Solar systems can cost tens of thousands of dollars, and the loans to pay them off can last decades. Experts warn that taking out a solar loan can leave some homeowners worse off, depending on the terms.

So, before signing any contract, homeowners should make sure that they understand the commitment that they're making. If you're considering a home solar system, it's important to find out the total cost, including interest rate costs, monthly payments, and fees.

So, I want to, I want to stop you here because I'm not sure this is exactly what we're looking for. I appreciate that. This doesn't seem like so much a scam as, like, a misleading. You're talking about legitimate solar companies that are just pressuring people and maybe skimming over certain facts or, or required important information.

But I think this briefing is more on the scams everyone else has been talking about. I'm not sure this truly fits in there. Do you have any information about the kinds of scams we've been talking about here or protection against them or what they could do or how DCCA might fit in with that?

So, we've been talking very generally sort of about scams that are online, and the, the amount of exposure to scams online is incredible. Right? What we haven't been talking about and what, frankly, is the very difficult question is how to successfully prosecute and deter those scams.

What we've been talking about is consumer education primarily, and I think that's really important, and our presenters have done a great job out here. Those questions are questions that I think have to be addressed at the prosecutorial level. We've got state and county agencies that are charged with enforcing criminal laws.

And if the answer is that we can't enforce them at the state and county level, then what should we be doing or what other steps can we be doing so that we can have conversations at the law enforcement level that we can up our game and be able to actually successfully prosecute that. Our office is happy to help and advise, from our experience on the civil side.

We are not criminal prosecutors, so we will defer to the, what the criminal prosecutors say and ultimately decide about how to go about prosecuting these crimes.

And I think it is difficult, as has been said by other presenters, that especially if it's international or across the state lines or, you know, whatnot, crypto, it's very difficult to trace. I know that in talking to the prosecutors and AGs, that those have been barriers in prosecution.

I think that's why we're focusing on prevention and trying to remediation rather than going after the person themselves. In the case I had, where this lady got scammed out, again, 2.2 million, we had multiple scammers after. We had some in Louisiana, we had some in the UK, we had some in the Bahamas.

So, it was kind of all over the place. Difficult to reach across international lines. But what kind of resources does your office offer or when should they ever call DCCA, Consumer Protection, if they've been scammed or if they want more education or what kind of things should they reach out to you for?

So, our office plays the role of a hub. We receive reports. We will, in the appropriate case, refer those to the appropriate criminal law enforcement agencies. We're also a reporting hub, so we report everything that we receive to the Federal Trade Commission's Consumer Sentinel Database, which is a really good source of information about scams.

It's a great data source for enforcers out there. The Consumer Sentinel Database, I think, is also available to our partners in law enforcement on the criminal side.

So, if they call 911 and they report it to HPD, do they still need to call you to get it into that database, or would HPD be able to handle that on their side?

Depends on the type of case that we get sent. So, sometimes some of what he's talking about might just fall under a theft, which might go to our zone burke theft details. There's a completely different group of detectives. Some might come to the financial crimes detail and deal with frauds and scams.

Some might be pushed off as a civil matter, especially if they're signing a contract to get solar installed or anything like that, which we would be kind of hands off, ish, and refer them back to DCCA or another agency, another civil agency.

So, the important thing is to call someone, get you to where you need to go. But you're another resource. DCCA is another resource to call. And that could be people's first call if they, if they chose to.

Yeah, it could. DCCA, well, you know, we're out there, we have consumer protection in our name, and everybody talks to us. So, we, I think that role that we play as sometimes an intermediary, sometimes an enforcer is a really important one.

And Chair. Chair, if I may, I really appreciate you stepping forward with this information because what you're saying is that your office is tracking trends. And right now, there's been a lot of people who've been signing these solar contracts thinking they're going to get the credit, but in actuality, if the installation isn't complete by the 31st, right, they don't get the credit.

So, they're paying for a system that's going to cost way more because their whole contract assumed they would be getting the credit. Therefore, it's only going to be this much. And that is reason to worry because it they may, like you said, it may result in huge financial losses, especially if a contractor can put a lien on your property.

I mean that's for many of Kupuna, for many families, that's their largest asset. So, I appreciate that, but I'm concerned with the amount of teeth your office has to actually then what do you do with this information?

Do you just put in a database or can you start putting up a notice to all of these solar panel installers saying hey, I just want to let you know that if you got collected a deposit, misleading the people that you had capacity to install when you know in fact you don't and you're locking all these people in, we're going to turn over this information to the Attorney General or something because you knowingly.

It seems like unfair deceptive trade practices under HRS 482. I mean would that be enforceable by you folks?

Yeah. So, existing law allows us to bring an enforcement action, an unfair deceptive act of practice. It's a very super robust law and we can potentially bring that once we've investigated a case and determined that there's good grounds to bring it. We would bring a civil action.

Our partners at the AG's Office have the same authority as us. When the matter crosses, crosses over into the criminal realm, then, at that point, we need to rely on our partners in criminal law enforcement.

Is there any way that you could proactively send a notice to all solar panel companies—hey, if you took a deposit it and we, you have an opportunity now to refund their money to, to avoid the contracts so that these people don't get stuck, because if we have to prosecute, it's going to be worse.

You know what I mean? Like give them an amnesty or something.

That's a really interesting question. We have prepared, based on what I was going to present today, a, a general consumer alert and this would alert folks to the expiring tax credit and the potential that they're going to be looking at losses. Really great question. So, should we do something to give an amnesty?

I'm not sure is the answer. I mean I'm not sure that we should do that exactly.

I'm not sure why it interferes with the right of contract. But that's an interesting idea. Can you affirmatively alert the solar companies that if they have not provided certain disclosures, you're going to consider it an unfair and deceptive trade practice and it's treble damages under that statute. So, it's a pretty intense penalty.

Is there a way for your office to proactively reach out to them and say if you haven't let them know that unless it's installed by the end of the year, they're not going to get this tax credit? If you haven't let them know, haven't let them know XYZ, I just want you to know we are going to consider that unfair and deceptive unless you allow them to back out of their contract. Might be a more proactive approach to that.

Yeah, very interesting. That, that is something that we'll keep on the table and definitely look at there. We want to keep options open for enforcement. At the same time, make sure that the—sorry about that. It's my 10-minute timer.

So, we're going to move on to Department of Law Enforcement. Please keep my Committee—keep our Committee informed. I'll disseminate the information to the members, but just let us know what you're doing on that.

Happy to do that. I did want to add when I saw that AARP had identified a certain number of crypto ATMs in Hawaii that they had identified, I was trying to do the math, something like 110. Our office did a point in time count last month and had identified closer to 250.

So, we're looking at a really rapidly increasing presence of cryptocurrency ATMs in the state.

Thank you for that...

Yeah, to comment on that, I think it was like 2012 or 2013, there's only two, so just to put that into context. But anyway, I won't belabor what everybody else said, but we do have a report, and I can give you guys a copy.

It's 15 pages created by our, our Office of Homeland Security and partnership with our ASO who was a tax collector. So, it's a, it's a relatively quick report, but it covers schemes, how to protect yourself, whatnot.

But what I'll just jump into is, based on everybody's conversation, the things that we should be considering moving into the next session. So, we should be considering statewide software for each county to upload DCCA what not so that information can be collected.

And what that information can do is help to drive what I would recommend is some funding for regular PSAs that we push out to the community.

So, in other words, you know, whether it come from the counties or the country DCCA or the county AARP to have this funding that we regularly push out onto media, advertise, whatever, things that are, like, recurring and then as well as new trends like that, well, you know, are you looking at getting a solar system or whatever then, you know, then this, that.

So, it's just things that we should consider moving forward. And on top of it, looks like lot of the things that are occurring that make it frustrating for the consumer is the fact it is out of state. So, you know, I just kind of building on those agreements with like, for example, right.

Secret Service, HSI, and FBI, because depending on the scale, they won't even touch it. You know, if it's just like one guy, 500 bucks, it's not something they can do.

And I really don't know what you could do, but there are other interesting ways that you can actually, whether it be Internet, you can actually just kind of work with, you know, telecom and all the other providers to actually just kill that IP.

So, in other words, if we're aware that that's a fraudulent line that they use, that they can actually kill the IP from coming into the state. So, I mean, they can just make a new one, but, you know, at least we're killing these. These inlets in the phone call stuff. Same thing, right?

You know, it's savvy, but, you know, if it's through Telecom or through AT&T, whatever, same thing, right? We could try to be proactive, and if we flag, we can ask them to just kill it. In other words, it can't even—it can't even come in. So, those are just ideas that I'm throwing out.

But I definitely think that we should have a robust PSA campaign next year.

Is there any time where someone who's been defrauded should call your office instead of HPD or DCC or the bank?

Right now, we would recommend it goes to the county only because we're smaller and for speed purposes, but definitely, if it touches between counties and the county believes that it's occurring within the state, just out of their jurisdiction, then yes, they should be asking us to adopt the case so that we can prosecute on another island.

A lot of times they'll just change it in between counties or just send it over to counties. But, yeah, we, based on what I'm hearing today, we can engage in our current vendor to add on fraud as one of the things, because we can add on as many instances. So, we already have fireworks, guns, ag issues.

So, if it's something that's interesting to the Legislature, we can start to do a low key version of it. And then it allows—our system also allows people to be anonymous. So, if they're just...but they want to do the right thing, at the very least you could be aware of it.

And again, we just have to push it out.

HPD, for your reporting online on your website, can they report anonymously if they do have...for getting scammed? Or do they need to?

No, because actually you're filing a police report. So, you're going to have an officer call you back and talk to you on the phone and get your information and then actually create a report, at least report.

But doing that, even if they're a little...it might help someone else from being scammed in the future. So, okay. Did you have anything else you wanted to—wow, A plus, on time.

I was looking at it. I don't want to be that guy.

I'm sorry. Are these police reports public information?

No.

Okay, so no one would know that that person filed a police report?

Internally, inside the Police Department, you can look it up, but outside the public, no.

Okay, thanks.

It's not subject to FOIA requests or any, anything like that. Freedom of Information Act or—can someone request a police report?

They could. I would have to bring someone from our records division to answer questions about who can get what police report and what is redacted and what's not. But I know active criminal cases, you may just get a letter that says, hey, a report has been made, but there's no detail.

So, you guys get overview data like how many people are making it. But yeah, you'd have to be attached to the case. In other words, you'd have to either be the suspect or the victim to, like, I can't just make, hey, I want to report that he made at his house.

Like, I wouldn't be able to get that if I was a member of the public.

Any other questions, members, before we wrap up? All right, thank you all for being here.

The telephone, chasing the telephone lines, something our office has helped facilitate the past. It works. It's something that industry does. They get a report and then they shut it down. And it's industry that's doing that. So, we work with them.

Great. Yeah, so maybe that'd be great if we could partner and then, you know, hey, could you kill this number for us?

Just a quick one. AARP actually is doing a fraud teletown hall next week, Saturday the 13th, at 9 o' clock. People can go to our website and sign up for it and it's we're going to be taking callers.

People can call in and ask questions and let us know it's not reporting fraud, but again, tips and such around how to spot fraud, what to do if you're in a situation. So, again, from informing consumers, again, it's Saturday 13th at 9:00 am. Go to our AARP.org/local.

Thank you all for being here. Appreciate it. Thanks.