WASHINGTON - Visa U.S.A. on Wednesday urged Congress to pass legislation aimed at deterring telemarketing fraud, a crime that the bank card organization said costs U.S. financial institutions about $8 million a year.

"Visa has instituted extensive internal procedures to detect fraudulent merchants," said Dennis Brosan, Visa's director of security. "However, fraudulent telemarketers develop new and sophisticated ways to evade detection, such as laundering sales drafts."

Appearing before a House Post Office subcommittee, Mr. Brosan praised elements of the Consumer Protection and Telemarketing Act, which was sponsored by Rep. Al Swift, D-Wash.

Victims of Fraud Could Sue

The bill includes three elements Visa regards as essential, Mr. Brosan said, including the creation of a private right of action that permits victims of telemarketing fraud to sue.

The bill also would permit state attorneys general to bring enforcement actions in federal court, and would require the Federal Trade Commission to develop rules defining telemarketing fraud.

Most of Visa's member financial institutions reimburse telemarketing fraud victims who pay with their bank card, Mr. Brosan said.

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