A federal political committee for a leading financial technology trade association was scammed out of nearly $2,500 by an “unknown individual” who accessed the PAC’s checkbook, according to a new filing with federal regulators.
In September, the PAC’s treasurer, Hayden Cole, noticed an overdraft warning after an “unknown individual” cashed a $2,200 check and carried out a $297.83 debit charge from the PAC’s bank account.
“Fraudulent checks were in the correct sequential order following the last genuine check, suggesting there may have been either improper disposal of checks or checks stolen or photographed from the PAC checkbook,” the PAC explained in a letter to the Federal Election Commission.
The PAC was later able to recoup the stolen funds through its bank.
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The American Fintech Council is a trade association representing well-known online banking companies, including SoFi, Affirm, Rocket Loans and Avant. These apps range from consumer trading solutions to budgeting software and “buy now, pay later” services.
These apps have taken the U.S. by storm in recent years as some consumers are constrained by growing inflation, unemployment and housing prices.
All of this technology did not help American Fintech Council’s political fundraising arm from getting scammed. But the PAC is hardly alone: In recent years, there’s been a series of high-profile thefts from elected officials, political campaigns, and fundraising committees.
The Republican National Committee, presidential campaign of Joe Biden and the re-election campaigns of Sen. Chuck Schumer, Sen. Jerry Moran, House Speaker Mike Johnson and Rep. Alexandria Ocasio-Cortez rank among those hit by cyber thieves and check swipers.
Democratic Sens. Mark Warner and Tim Kaine were victimized by their own campaign treasurer, who is now serving time in prison for stealing from committees whose finances she oversaw.
Even accounting firm KPMG couldn’t account for $10,000 stolen from its PAC.
In a letter to the FEC, the American Fintech Council’s PAC says it’s taken measures to help prevent future scams.
“AFC PAC has since evaluated its internal controls and implemented new safeguards to prevent future fraudulent activity, including opening a new bank account ... and enrolling in a positive pay system which will flag and require verification for any transactions that have not been pre-authorized by the PAC,” American Fintech Council wrote in their filing.
The American Fintech Council, which did not immediately respond to a request for comment, only declared raising a little over $2,500 in the last six months, most of it attributed to the refunded stolen funds.
The trade association was active last year, as it lobbied Republicans in both Congress and the White House to reduce regulations for its member parties.
In a move that resembles other parts of Silicon Valley, such artificial intelligence and social media interests, the American Fintech Council pushed Congress last year to block state-level privacy regulation through federal laws.
“The current patchwork of state privacy laws and the limits of the existing federal framework have created uncertainty for consumers and challenges for responsible providers,” the organization wrote in a letter addressed to the House Committee on Financial Services, which argued for a federal standard for identity verification, fraud detection and transaction processing.
The council also lobbied President Donald Trump’s administration to stop legacy national banks from charging fees to fintech firms to access to customer’s financial data. This is part of growing tensions between the legacy banking institutions and online crypto and banking companies to sway Republicans in Washington to establish favorable regulations.
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