Banks Are Fighting Fraud and Scams, But We Can't Do It Alone

Brian Fritzsche is Associate General Counsel and Vice President at the Consumer Bankers Association (CBA). His expertise covers a variety of legal and regulatory consumer financial services issues. He manages CBA’s Default Management, Digital Channels, Fraud Management, and Internal Audit Committees. 

Prior to joining CBA, Brian was an attorney in the financial services group of a top international law firm, where he advised banks and non-banks alike on a wide range of complex regulatory issues arising under the financial services laws.

Brian graduated, magna cum laude, from Georgetown University Law Center, where he was elected to the Order of the Coif.  Brian received his B.S. in Foreign Service, summa cum laude, Phi Beta Kappa, from Georgetown University’s Edmund A. Walsh School of Foreign Service. Brian is a member of the District of Columbia Bar and the Maryland State Bar Association.

In the hit television series, House, the famed misanthropic doctor asks one of his fellows: “You wake up in the morning, your paint’s peeling, your curtains are gone, and the water is boiling. Which problem do you deal with first?  None of them! The building is on fire!”¹  Fighting fraud and scams often feels the same way: while much of the public discourse and well-intentioned efforts have focused on the isolated symptoms, not enough attention has been paid to stopping the fire overall. Banks are committed to protecting their customers by responding quickly to the fire by enhancing protection and adapting to emerging threats. Yet banks alone do not have the tools to prevent the fire from starting in the first place. A coordinated response requires recognizing that fraud and scam prevention is a shared responsibility, one that spans government agencies, law enforcement, telecommunications providers, social media platforms, fintech companies, and others. These players each control different parts of the metaphorical “house”, and until they act together, the fire will continue to spread. Fortunately, the discourse is evolving. Various sectors and coalitions are starting to advocate for a government-led, cross-industry, public-private, national strategy for fighting the house fire of fraud and scams.

The Cultural Understanding of Fraud and Scams 

As stakeholders search for solutions in combatting fraud and scams, they need to understand not just how fraudsters and scammers operate, but also how consumers perceive these threats, and by extension, how vigilant they are in recognizing and preventing fraud. In the media, scammers are often depicted as lone-wolf individuals dressed in all black, hunched behind a computer screen waiting for the perfect moment to drain your bank account. However, today's fraudsters and scammers are the fast, coordinated criminal enterprises shown in 2024’s The Beekeeper, with vast resources and time to exploit their victims. These criminal enterprises relentlessly bombard consumers outside of bank-managed channels, with sophisticated scams through endless phishing emails, spam texts, fake “Amazon shipment” notifications, long-term interpersonal engagements on Meta platforms,² and more. Continuing technological evolutions are making it harder for even the most diligent consumers to effectively be on their guard. Technologies like AI–generated voice cloning, once confined to the realm of science fiction, are now a fraud and scam landscape reality. The schemes are not new, yet hundreds of thousands of Americans fall prey to them every year. 

This criminal activity has not only had a clear and significant financial impact, but a tangible human one, as well. For example, 12% of identity crime victims who contacted the Identity Theft Resource Center from July 2023 to July 2024 reported suffering from thoughts of suicide.³ But the trauma caused by scams is not limited to consumers. There is also the human impact of those trafficked into criminal scam networks, often under false pretenses of legitimate employment. According to recent reporting by the Associated Press,⁴ crackdowns in countries like Myanmar, Cambodia, and Laos have exposed large scale operations where forced laborers were made to run scams targeting people around the world, highlighting just how far reaching and coordinated these industrialized scam operations have become. Education is crucial, as the sophistication of these scams is making it increasingly difficult for consumers to differentiate scams from reality. The fight against fraud and scams then is not one purely related to Americans’ financial well-beings, but also to preserving their human dignity.  

The Legal Landscape of Fraud and Scam Prevention

Recent discourse has centered on instances of fraud and scams that result in funds moved from banks through electronic fund transfers (EFTs). Generally, Regulation E, which implements the Electronic Fund Transfer Act, allocates liability for harm to the party in the best position to prevent that harm from occurring. Consumers bear some liability up to a cap for “unauthorized” EFTs, and financial institutions bear the remaining liability for the loss for an “unauthorized” EFT.⁵ Unauthorized EFTs include those initiated by a fraudster who obtained a consumer’s access device through fraud or robbery, as well as consumer transfers at an ATM induced by force.⁶ In short, if the customer did not authorize the transaction, then the bank is liable. However, if the customer did authorize the electronic fund transfer, the banks are generally not liable.  

Importantly, the limitation of consumer liability under Regulation E does not extend to “authorized” EFTs, which include scenarios where a consumer initiates a transaction.⁷ Financial institutions are well positioned to confirm a consumer’s identity when initiating a transaction, such as through the use of password protection, multi-factor authentication, and more advanced fraud detection tools. Financial institutions are also well positioned to confirm the funds from the transaction are being sent to the correct account. This is why liability rests with financial institutions in instances like online account takeover, where a fraudster initiates a transaction: the financial institution is expected to have the mechanisms to accurately determine whether the transaction was not truly initiated voluntarily by the consumer.  

In contrast, when a consumer authorizes payment to any particular account, it is not possible for the financial institution to determine whether the consumer had full awareness or understanding of whether they are sending it to someone under a misrepresentation or being scammed out of their money, since banks do not have access to any external communications – such as emails, Facebook messages, text messages, or phone calls – to better understand the nature, and validity, of the relationship that prompts the consumer to initiate the transaction. In other words, when a consumer intentionally sends money to someone they have been speaking with through social media or some other channel, liability rests with the consumer because the consumer, as the entity initiating the transaction, was in a better position than the financial institution to prevent the transaction from occurring. The issue is further complicated by the increasing number of transactions occurring outside traditional bank-enabled channels. Many of these platforms, such as Bitcoin ATMs,⁸ bypass conventional protections, thereby leaving consumers more vulnerable. These infrastructures operate with minimal oversight and transparency, providing financial institutions with few, if any, tools to intervene when problems arise. 

The Banking Industry’s Efforts for Fighting Fraud and Scams

Beyond existing statutory obligations, financial institutions adhere to a variety of informal guidance and recommendations. For example, in December 2024, the Board of Governors of the Federal Reserve System (FRB), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Financial Crimes Enforcement Network (FinCEN), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and state financial regulators collectively issued an Interagency Statement on Elder Financial Exploitation,⁹ which contains many recommendations that financial institutions have already implemented. Additionally, some institutions have tailored alerts and investigations to better identify and protect vulnerable customer segments, for instance, by modifying the questions asked during transaction verifications to help identify potential signs of a scam. Banks are deeply committed to protecting their customers, including those who may be more vulnerable, such as the elderly. Their efforts are not due solely to compliance, but also to genuine concern for their consumers’ well-being. For example, banks today… 

• Conduct additional risk screenings on transactions and their destinations across all payment channels. 

• Use behavioral biometrics to detect and prevent account takeovers.

• Report bad actors and share information with other banks & credit bureaus to mitigate scams.

• Resource investments in both people and technology, such as artificial intelligence to combat innovation by bad actors.

• Collaborate with law enforcement agencies to provide fraud and scam training.

• Push two-factor authentication to prevent account takeovers during token enrollments.

• Use of digital ID verification to prevent identity theft.

• Validate whether the consumer-provided account numbers match intended payee names to help prevent scams like business email compromises.

• Develop a robust taxonomy for reporting and classification to address issues effectively and at scale.

• Dedicate data science teams to identify and combat account takeovers. 

• Utilize targeted in-app messaging to inform consumers, leading to increased abandonment of transactions that are induced by scammers.

• Share information on confirmed fraudsters with credit bureaus and payment networks to prevent repeat incidents across institutions.

• Investigate the dark web for compromised accounts to proactively ensure consumers are protected.

These are just some of the actions that banks are currently undertaking to fight fraud and scams and protect their customers from these malicious actors. 

Stopping the Fire: The Need for a National Strategy 

This hard work by banks is not enough, in isolation, to combat the clear danger posed by fraud and scams to Americans everywhere. As the Consumer Bankers Association (CBA)¹⁰ concluded following a roundtable discussion of a white paper¹¹ written by Nick Bourke, former Director of Consumer Finance at The Pew Charitable Trusts, “[b]ad actors scam and defraud consumers across a range of sectors and extract money from the banking system using fast and highly integrated tactics. In order to combat these evolving tactics, the government must spearhead a cross-industry public-private national strategy against fraud and scams.”¹²

Since CBA’s call for a government-led cross-industry public-private national strategy for fighting fraud, significant progress has been made. For example, the Aspen Institute National Task Force for Fraud and Scam Prevention¹³ completed initial work in early April 2025 focused on enhancing public-private collaboration. The effort produced a set of takeaways and potential recommendations regarding measurement of fraud and scams, information sharing, and strategies for increasing consumer awareness.¹⁴ Future work is expected to advance data and technological capabilities, with the final intention to be advancing tangible technology and policy solutions to combat fraud and scams.

The urgency for action was reinforced by a recent report from the U.S. Government Accountability Office (GAO),¹⁵ which called for the development of a comprehensive, government-wide strategy to confront the growing scam crisis. The report emphasized the need for a national scam estimate, a common definition of scams, and an evaluation of the outcomes of consumer education. These are foundational steps that highlight what many in the private sector already know, without federal leadership, the current response is fragmented. One alarming statistic from the report states, “[t]he FBI estimated that in 2023 it received approximately 589,400 scam-related complaints, resulting in losses of $10.55 billion.”¹⁶ Of the thirteen federal agencies referenced in the GAO report, only eight currently receive scam complaints from consumers. These figures alone reflect just a fraction of the total reported and should be enough to warrant concern for anyone. 

Despite these numbers, we still lack a unified approach, and the consequences are clear. Banks have long led the charge against fraud and scams, investing heavily for the protection of their customers, but they cannot do it alone. This is especially true when recognizing where many of these scams originate: social media. Indeed, according to a recent article in the Wall Street Journal, Meta Platforms “accounted for nearly half of all reported scams on Zelle for JPMorgan Chase between the summers of 2023 and 2024.”¹⁷ This shows the importance of other sectors–telecommunications providers, social media platforms, and fintech companies–taking ownership. These sectors are often where fraud and scams are initiated and conducted. It is imperative these industries lean in and lead with the same urgency as financial institutions to protect all Americans from fraud and scams. Let’s move past the peeling paint—and put out the house fire.

The opinions shared in this article are the author’s own and do not reflect the views of any organization they are affiliated with.

^[1] House MD S2E16 (“Safe”). Spoiler alert: the patient in this episode is suffering from tick paralysis. 

^[2] Jeff Horwitz and Angel Au-Yeung, Meta Battles an ‘Epidemic of Scams’ as Criminals Flood Instagram and Facebook, The Wall Street Journal, May 15, 2025, https://www.wsj.com/tech/meta-fraud-facebook-instagram-813363c8.

^[3] Identity Theft Resource Center, 2024 Consumer & Business Impact Report (Oct. 2024), https://www.idtheftcenter.org/publication/itrc-2024-consumer-and-business-impact-report/.

^[4]  Huizhong Wu, Jintamas Saksornchai, and Martha Mendoza, They were forced to scam others worldwide. Now thousands are detained on the Myanmar border, Associated Press (Mar. 9, 2025), https://apnews.com/article/myanmar-thailand-scam-centers-trapped-humanitarian-c1cab4785e14f07859ed59c821a72bd2?utm_source=openbanker.beehiiv.com&utm_medium=referral&utm_campaign=banks-are-fighting-fraud-and-scams-but-we-can-t-do-it-alone

^[5] 12 C.F.R. § 1005.6(b)(1)-(2).

^[6] 12 C.F.R. § 1005.2(m), cmt. 2(m)-4.

^[7] See generally 12 C.F.R. § 1005.6.

^[8] Emma Fletcher, Bitcoin ATMs: A payment portal for scammers, Federal Trade Commission, (Sep. 3, 2024), https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2024/09/bitcoin-atms-payment-portal-scammers?utm_source=openbanker.beehiiv.com&utm_medium=referral&utm_campaign=banks-are-fighting-fraud-and-scams-but-we-can-t-do-it-alone#edn1

^[9] FRB, CFPB, FDIC, FinCEN, NCUA, OCC, and state financial regulators, Interagency Statement on Elder Financial Exploitation (Dec. 4, 2024), https://www.fincen.gov/sites/default/files/2024-12/Interagency-Statement-on-EFE-FINAL-508C.pdf.

^[10] The CBA is a member-driven trade association, and the only national financial trade group focused exclusively on retail banking—banking services geared toward consumers and small businesses. As the recognized voice on retail banking issues, CBA provides leadership, education, research, and federal representation for its members. CBA members operate in all 50 states. They include the nation’s largest bank holding companies as well as regional and super-community banks.  Eighty-three percent of CBA’s members are financial institutions holding more than $10 billion in assets.

^[11] Nick Bourke, Stopping Scams Against Consumers: Roadmap for a National Strategy (Jul. 24, 2024), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4897644.

^[12] CBA, ICYMI: CBA Convenes Cross-Industry, Public-Private Roundtable to Inform Whole-Of-Government Approach to Combat Fraud and Scams (Jul. 24, 2024), https://consumerbankers.com/press-release/icymi-cba-convenes-cross-industry-public-private-roundtable-to-inform-whole-of-government-approach-to-combat-fraud-and-scams/.

^[13] The Aspen Institute, Aspen Institute Financial Security Program Launches National Task Force for Fraud & Scam Prevention (Jul. 18, 2024), https://www.aspeninstitute.org/news/task-force-on-fraud-and-scams/.

^[14] The Aspen Institute Financial Security Program, Phase One Working Group Outputs (May 23, 2025), https://fraudtaskforce.aspeninstitute.org/phase-one-outputs.

^[15] U.S. Government Accountability Office, GAO-25-107088: Consumer Protection: Actions Needed to Improve Complaint Reporting, Consumer Education, and Federal Coordination to Counter Scams (Apr. 8, 2025), https://www.gao.gov/products/gao-25-107088?utm_campaign=usgao_email&utm_content=topic_bizregs&utm_medium=email&utm_source=govdelivery.

^[16] U.S. Government Accountability Office, GAO-25-107088: Consumer Protection: Actions Needed to Improve Complaint Reporting, Consumer Education, and Federal Coordination to Counter Scams (Apr. 8, 2025), https://www.gao.gov/products/gao-25-107088?utm_campaign=usgao_email&utm_content=topic_bizregs&utm_medium=email&utm_source=govdelivery.

^[17] Jeff Horwitz and Angel Au-Yeung, Meta Battles an ‘Epidemic of Scams’ as Criminals Flood Instagram and Facebook, The Wall Street Journal, May 15, 2025, https://www.wsj.com/tech/meta-fraud-facebook-instagram-813363c8.

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