Article: Telemarketers' phony drafts hard to combat. (Analysis: Follow-Up on the News)

Telemarketers' Phony Drafts Hard to Combat

A new high-tech telemarketing scam that is stinging banks and consumers is catching the attention of Washington.

But a proposed law aimed at protecting consumers may do little to limit banks' exposure to the crimes.

The drafted legislation would address the problem of fraudulent demand drafts - a checklike mechanism that can be used to siphon money from checking accounts.

The scam, first reported by the American Banker in May, has cost banks and their unwitting customers tens to hundreds of millions of dollars since it first cropped up late last year, bankers and investigators said.

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