Money Transmission Act: stored value platforms: fraudulently induced transfers.

Senator Richardson's proposal to protect consumers from digital payment fraud would require stored value platform operators to reimburse customers for losses caused by fraudulently induced transfers. The legislation defines these transfers as transactions initiated through deception or manipulation that result in stored value being sent to accounts outside the customer's control.

The bill establishes a structured claims and investigation process that stored value platforms must follow. Operators would need to provide multiple channels for customers to submit reimbursement claims, including mail, phone, email, and digital communications through both websites and mobile applications. Upon receiving a claim, platforms must complete investigations within 10 business days and reimburse verified losses within one business day. For complex cases requiring additional investigation time, operators may take up to 45 days but must provisionally credit customer accounts within the initial 10-day window.

Under the proposal, platforms must notify customers of these rights by July 1, 2026, and update their terms of service to reflect the reimbursement requirements. The Department of Financial Protection and Innovation would oversee compliance and could order operators to provide restitution or monetary relief to affected customers. The measure builds upon existing Money Transmission Act requirements for stored value issuers while creating new consumer protection mechanisms specific to fraudulent transfers.