Hawaii Bill Targets Scams, Crypto ATMs & School Cell Phone Use | Hawaii News Now

Hawaii lawmakers are considering a series of bills aimed at protecting residents, particularly seniors, from increasingly sophisticated fraud and scam operations. The proposed legislation tackles issues ranging from deceptive mailers and cryptocurrency ATM abuse to in-school cell phone policies and bolstering bank teller authority to intervene in potentially fraudulent transactions.

Combating Elder Fraud with Bank Teller Intervention

A key component of the proposed legislation would empower bank tellers to temporarily freeze transactions if they suspect fraudulent activity. State Representative Scot Matayoshi, D-Kaneohe and Kailua, and chair of the House Consumer Protection and Commerce Committee, explained the rationale behind this measure. “If the bank teller believes that there’s a fraud, a fraudulent transaction happening, they can put a freeze on it and for a couple of days or however long they need in order for the person to honestly just snap out of it,” Matayoshi said.

This intervention is designed to capitalize on the personal relationships many seniors maintain with their bank tellers, who often serve as a first line of defense against scams. The bill recognizes that victims often realize they’ve been defrauded within 24 to 48 hours, but by that point, the funds are typically gone and difficult to recover.

Targeting Cryptocurrency ATMs as Fraud Facilitators

Perhaps the most technologically focused aspect of the proposed legislation centers on restricting cryptocurrency ATMs. These kiosks, increasingly prevalent in convenience stores and grocery stores across the state, have become a favored tool for scammers, particularly those targeting vulnerable populations. Matayoshi believes the benefits of these ATMs are outweighed by their use in fraudulent schemes. “These crypto kiosks, in my opinion, are mostly used for fraudulent transactions,” he stated. “The benefit to them doesn’t outweigh the massive fraud going on with these ATMs.”

The proposed bill wouldn’t entirely prohibit the use of these ATMs. it would still allow individuals to withdraw cash from cryptocurrency holdings. However, it would prevent the purchase of cryptocurrency with cash, effectively cutting off a key avenue for scammers to launder stolen funds. This approach acknowledges the legitimate use cases for crypto ATMs while addressing the significant fraud risks.

Reports indicate that scammers often guide victims, frequently under duress (such as claims of a family member needing immediate bail money), through transactions at these kiosks. The speed and relative anonymity of cryptocurrency transactions make it difficult to trace and recover stolen funds.

Addressing Deceptive Marketing Practices

Beyond cryptocurrency scams, the legislation also aims to protect consumers from deceptive mailers. These mailers often mimic official communications from mortgage companies or government agencies but are, in fact, solicitations from third-party services charging exorbitant fees. The bill would mandate prominent disclaimers on such mailers, clearly identifying them as not originating from the purported source. Transactions made through these deceptive mailers would be rendered voidable if proper disclosures are not included.

School Cell Phone Ban: Liability and Focus

The proposed legislation also extends to the educational sphere, with a bill proposing a “bell to bell” ban on cell phone use in schools. This measure isn’t directly related to financial fraud but addresses concerns about liability for teachers and schools when confiscating expensive devices. Matayoshi, a former seventh-grade science teacher, explained that teachers often avoid confiscating phones due to fears of being held responsible for loss or damage. “If the cell phone broke, if another kid stole it out of my desk, if it got lost, then I would be held responsible for it,” he said.

The proposed ban includes exceptions for emergencies and educational purposes and requires parents to retrieve confiscated phones. Proponents argue that removing phones from classrooms could reduce bullying and improve student focus.

Budgetary Considerations and Prioritization

While addressing these critical issues, Matayoshi emphasized the importance of maintaining essential government services amidst budgetary constraints. He stated that his measure of success for the legislative session would be ensuring the continued funding of vital programs like SNAP benefits and Medicaid. “Success for me at the end of session would be making sure that those core essential services are still being taken care of, that the government is still providing for people in need,” Matayoshi said.

The proposed legislation reflects a growing awareness of the evolving tactics employed by scammers and a proactive effort to protect Hawaii residents from financial exploitation. The focus on cryptocurrency ATMs, in particular, highlights the challenges posed by emerging technologies and the need for regulatory frameworks to mitigate associated risks. The bills are currently under consideration by the Hawaii State Legislature.