Dive Brief:
- Four U.S. senators are proposing legislation that would create a task force to study payment scams and suggest ways for lawmakers and regulators to combat them, along with formulating industry best practices.
- The Task Force for Recognizing and Averting Payments Scams Act was announced Tuesday by Senators Mike Crapo, an Idaho Republican, and Senator Mark Warner, a Virginia Democrat. The Federal Trade Commission reported that Americans had lost $12.5 billion to fraud in 2024, a 25% annual jump, which the senators cited in their announcement.
- “We can—and should—better equip law enforcement and regulators with the tools to go after scammers and prevent scams before they happen," Crapo said Tuesday in a news release announcing the bill. Senators Jerry Moran, a Kansas Republican, and Raphael Warnock, a Democrat from Georgia, have signed on as co-sponsors.
Dive Insight:
The bill, if it moves forward in Congress, would represent one of the first formal federal efforts to combat payments fraud. The problem is well-documented and a much-battled scourge across the payments industry. Social media, online commerce, mobile text messaging and other digital platforms have allowed scammers to innovate in targeting consumers.
Under the legislation, the Treasury Department would chair the task force, which would also include staff from the Justice Department, Consumer Financial Protection Bureau, the Federal Communications Commission and the FTC, plus industry representatives.
The task force would be expected “to examine the payments landscape” and recommend changes to existing laws and regulations, per the senators’ news release. The task force would also suggest best practices to coordinate anti-fraud efforts at the state, federal and local levels.
The task force would be required to update its report every three years.
About 2.6 million consumers reported fraud incidents last year, roughly the same as in 2023, according to the FTC. However, monetary loss associated with these frauds surged from affecting roughly a quarter of victims (27%) in 2023 to 38% last year, the agency said. Impostor scams represented the largest area of fraud, followed by scams related to online shopping, per the FTC.
Multiple industry associations support the legislation, according to the senators’ press release, including the AARP; the American Bankers Association; and the Electronic Transactions Association.
“A task force will definitely help because you’re bringing together all of the entities who are working on this and it puts them in the same room,” Scott Talbott, a spokesman for the Electronic Transactions Association said Wednesday. “The thieves thrive on divide and conquer and it will take everybody working in concert to fight this fight.”
The ETA has previously pushed Congress for additional law enforcement funding, but the fraud task force is “the first step” for a coordinated effort to battle payments fraud, he said.
“A whole-of-government approach is critically important to make a meaningful difference toward protecting the hardworking Americans we’re all working to serve,” Consumer Bankers Association CEO Lindsey Johnson said Wednesday in an emailed statement.
In 2023, payments fraud losses in the Americas were tabulated at $102.6 billion, according to a 2024 report from the research firms Oliver Wyman and Celent.
The issue represents “a national challenge” for consumers, law enforcement, regulators and the payments industry, a Zelle general manager, Denise Leonhard, said in February at a payments fraud conference presented by Banking Dive and Payments Dive.
