Operation Choke Point- Why it’s Important and What You Need to Know

Tuesday, June 24th, 2014


1. It is a Department of Justice initiative to stop identity theft, scams, and money laundering through fraudulent debiting of bank accounts.

2. Banks and payment processors that originate payments play a critical role in enabling wrongdoers to debit victims’ bank accounts and to move money around.  This is how many scams, frauds and illegal activities occur.

3. Originating banks are not always aware that they are being used to facilitate illegal activity. But if and when they choose to continue to profit from lines of business in the face of blatant signs of illegality, they become an appropriate target for enforcement action.

4. Wrongdoers who access the payment system inflict harm on everyone. In addition to the direct victims of fraud, the general public spends millions of dollars on identity protection products and loses faith in the security of the payment system.

5. The Virginia Poverty Law Center supports Operation Choke Point. The Department of Justice should stop large fraudulent schemes and Congress needs to let them do it.

6. The FBI estimates that mass-marketing fraud schemes causes tens of billions of dollars of losses each year from millions of individuals and businesses and one recent study found that fraud drains $2.9 billion a year from the savings of senior citizens. Unlawful activity that would not be possible without an originating bank includes a telemarketing scam that defrauded seniors of $20 million by lying to them to get their bank account information.

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