NEWARK, N.J. – During a roundtable discussion today with women small business owners, U.S. Senator Bob Menendez outlined legislation he plans to introduce when he returns to Washington that will extend protections against fraudulent and unauthorized transactions to small businesses. The bill is inspired by the experience of a New Jersey small business owner who brought this issue to the Senator’s attention earlier this year.
The Small Business Fraud Protection Act will extend the period small businesses have to report fraudulent transactions without being held liable from 24 hours to 60 days. According to CNBC, cybercrime has become one of the fastest growing forms of criminal activity, with 43% of cybercrimes aimed at small businesses.
“The small mom and pop shops along New Jersey’s Main Streets keep our economy alive and flourishing,” said Sen. Menendez. “Whether it’s a shop along one of our boardwalks or in one of our bustling downtown districts, small businesses deserve to be protected from fraud. After one of my constituents brought this issue to my attention several months ago, I knew something had to be done to better protect small businesses. I’m proud to introduce this commonsense piece of legislation and look forward to it becoming law.”
Earlier this year, Benjamin Zinckgraf, president of Zinckgraf Electrical Contractors, LLC, a small business based in Mt. Arlington, Morris County, noticed a nearly $100 unauthorized transaction in his business checking account. When Mr. Zinckgraf contacted his bank and filed a fraud report, he was told that since he didn’t report it within 24 hours of the transaction, they were unable to conduct an investigation and he would be held liable for the cost. He contacted Sen. Menendez’s Newark office to see if current laws could be changed to better protect small business owners.
“The Small Business Fraud Protection Act is a move in the right direction. It will help protect our assets against the rise of cybercrime. At minimum it will give small businesses adequate time to report an issue, which is very much needed for busy Americans,” said Benjamin Zinckgraf. “I would like to thank Senator Menendez and his dedicated team for pushing this piece of legislation through. It’s always good to know our politicians are on our side.”
The Electronic Fund Transfer Act (EFTA) currently protects individual consumers from unauthorized electronic funds by allowing consumers to report fraud up to 60 days after the suspicious activity. Small businesses, however, are not protected under the EFTA and only have 24 hours to report fraud without being held responsible for the entire unauthorized transaction. The Small Business Fraud Protection Act levels the playing field by extending the same fraud protections afforded to individuals under the EFTA’s consumer liability section to include small businesses.
“Small businesses are a growing and increasingly profitable target of cybercriminals, and bank account hacks cost small businesses on-average $32,020 per incident. It is a huge oversight that the banking accounts of America’s smallest businesses aren’t fully protected against fraud and online theft,” said National Small Business Association President and CEO Todd McCracken. “This important legislation will close that loophole, and I applaud Senator Menendez’s leadership on this issue.”
"Small businesses deserve the same protections from fraud and unauthorized transactions as consumers," said Amanda Ballantyne, Executive Director of the Main Street Alliance. "Extending the Electronic Fund Transfer Act's consumer protections to small businesses will give small businesses the time needed to identify and act against fraud, an important resource as cyber security and other financial threats are on the rise."
The Senator held a roundtable with women small business owners today ahead of Small Business Saturday, the nationwide day where shoppers are encouraged to shop at local small businesses. Businesses represented at the roundtable ranged from a digital marketing firm, a cleaning service, a floral shop and various consulting firms. They discussed a range of issues, including: the need for more federal grants and mentorship programs to assist women owned and minority owned small business owners; the ability to access personal 401K’s to start a small business without paying high fees and penalties; and lowering the cost of childcare to allow more women to enter the workforce and become entrepreneurs.
“I know that a small business owner’s work is never truly done, so it means a lot that you took the time to be here. Discussions like this one help me better represent New Jersey,” Sen. Menendez said during today’s roundtable. “Throughout my career, I’ve worked for policies to help small businesses succeed. But I’m aware of the barriers that women face in the corporate world. And while we’ve made much progress, I know we have a long way to go until the economy truly works for all Americans. I’m committed to fighting for equal rights and economic justice for women in every aspect of their lives, from reducing the burden of child care costs to combating pay discrimination in the workplace and beyond.”
Attendees at today’s roundtable included:
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