The Treasury Department is increasingly using data to help prevent the U.S. government from sending payments to bad actors, Secretary Scott Bessent said this week in an update on fighting fraud.
Newly deployed safeguards, including the ability to tap additional sources of data, helped protect some $3.7 trillion in payments, the department said in an Oct. 6 press release.
“Treasury continues to transform how the federal government protects taxpayer dollars by using better data, stronger controls, and advanced technology to stop fraud and improper payments before money goes out the door,” Bessent said in the release.
The federal government’s increased vigilance in fighting fraud comes as artificial intelligence increases the threats posed not only to government agencies, but also consumers and companies. Indeed, some industry professionals have said that the federal government has not been playing a significant enough role in helping to combat the mushrooming fraud problem.
The threat of scams, where fraudsters induce consumers, companies or other organizations, to send payments under false pretenses has become a particularly troubling issue. Americans are bilked out of $119 billion annually, according to estimates in a March report from the Consumer Federation of America that included an approximation of incidents that go unreported.
Treasury’s increased scrutiny of government payments followed an executive order last year from President Donald Trump’s calling for a crackdown on “fraud, waste and abuse” that might affect the government’s trillions of dollars in annual payments. Trump’s predecessor, then President Joe Biden, had also sought to thwart the rising fraud.
“Financial fraud threatens the integrity of Federal programs and undermines trust in Government. Agencies’ past underinvestment in technology and longstanding challenges with access to accurate data has prevented them from more fully safeguarding taxpayer dollars against fraud and improper payments,” the White House said in that March 2025 order.
The Treasury department contended that its fraud-fighting capabilities had improved in fiscal year 2026, which ended on Sept. 30, over the prior year, by expanding access to data that helps identify fraudulent accounts. The government added nine data sets to better verify identities for payments and to improve screening of payments.
The federal government has sought to move away from past practices that amounted to ‘pay and chase,’ in which payers find themselves in the position of making improper payments and then striving, usually in vain, to recoup losses.
As of fiscal year 2026, most federal programs now have access to the additional data sources aimed at helping to identify fraudulent accounts, up from just 4% in the prior fiscal year. The remainder of programs are expected to have the access by early in the 2027 fiscal year, the release said.
As part of the improved screening, the government stopped 13,500 payments worth $175 million that were headed to falsified identities of people who were found to be deceased, the release said.
In the White House order, the Government Accountability Office estimated the federal government’s losses at between $233 billion and $521 billion per year due to fraud.
