By Tara Payne and Drew Ruben, Bank Policy Institute
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Americans’ savings are at risk as never before as new, technology-driven fraud and scams are surging across the U.S, costing American households an estimated $12.5 billion in 2024, a 25 percent increase over the previous year. These are just reported losses, with actual totals likely much higher. Using sophisticated technology, scammers are directly targeting unsuspecting consumers, and there’s no better route to a consumer than through their phone and its apps.
Scammers rely on social media channels and communication networks to reach customers. According to a recent Aspen Institute report, 68% of Americans reported receiving scam calls at least weekly, 61% of Americans reported receiving scam text messages at least weekly and about one-third of Americans say they get scam phone calls at least daily. These statistics are alarming and demonstrate that current policies for addressing fraud are insufficient. And while financial institutions are doing their part to educate consumers and mitigate incidents of fraud, by the time fraud reaches the banks’ systems, consumers may have already been harmed and their funds put at risk. As a result, action from industries and regulatory bodies outside of the banking sector is needed to achieve a durable solution.
The Problem and the Solutions
Phone scams have become part of everyday life for American consumers, and they’re becoming more sophisticated and convincing, boosted by AI deepfakes, voice cloning and location spoofing. Many scams originate from organized transnational crime groups that leverage global communications infrastructure to target Americans at scale.
In this global piracy enterprise, the FCC’s task is to safeguard the ports of entry and regulate the highways upon which data travels. Helpful steps would include: mandating standards for authenticating all U.S. calls; alerting consumers to unauthenticated calls and messages, especially international ones; deploying robust international anti-scam filters to block spoofing and mass campaigns; enforcing anti-fraud standards consistently across mobile virtual network operators; and sharing confirmed scam numbers and traffic data across carriers.