Report: Government needs a sweeping anti-scam strategy to counter modern fraud

The government needs to make a plan to address scams as a national security crisis, according to a strategy a group of over 80 public, private and nonprofit actors released last week.

With scammers often part of transnational criminal organizations using fraud to fund other crimes like human trafficking, the threat is not only to individual Americans, but also to national security, argues the group, led by the Aspen Institute Financial Security Program. 

U.S. consumers lose an estimated $158 billion a year to fraud, according to the Federal Trade Commission, and nearly 75% of Americans say they’ve fallen prey to an online scam or attack.

The threat is only getting worse, with cryptocurrency and artificial intelligence enabling even more fraud, and the United States lacks a coordinated strategy, the task force says. Various agencies work on fraud and scam issues, including the FBI and Department of Justice, but no one agency has the resources or mandate to coordinate efforts, as the Stimson Center has argued.

The goal of any anti-scam strategy should be to make scams less profitable in the first place, the task force recommends. 

Among those that informed the report, which was first reported on by Axios, are Google, the American Bankers Association and Target. 

“Scams are not just a financial problem — they are a national security threat,” said Kate Griffin, director of the National Task Force on Fraud and Scam Prevention, in a statement. 

In a letter to top lawmakers on Capitol Hill, the group points to recent Treasury Department sanctions on various Mexican individuals and companies for timeshare fraud centered in Puerto Vallarta, Mexico, led by the Cartel de Jalisco Nueva Generacion. The cartel, a U.S.-designated foreign terrorist organization, is using the money as an alternative revenue stream to supplement its drug trafficking proceeds, Treasury says.

The scheme targets U.S. owners of timeshares through Mexican call centers that ask owners to pay advance “fees” or “taxes.” Six thousand U.S. victims have reported almost $300 million to timeshare fraud schemes in Mexico between 2019 and 2023, according to the FBI.

Cross-sector collaboration will be key to slowing down fraudsters, the task force says.

On the government side, the recommendations include modernizing law enforcement databases and giving companies a single place to report scam intelligence. Public sector actors also need to strengthen their identity verification and authentication systems to block bad actors.

Some policymakers are zeroed in on the issue already. The joint co-chairs of the Stop Scams Caucus, bipartisan coalition including Reps. Gabo Amo, D-R.I.,  Zack Nunn, R-Iowa, Jamie Raskin, D-Md., and Jefferson Shreve, R-Ind., all gave remarks at an event held by Aspen on Oct. 1. 

“The cost of these fraud schemes really came to my attention when one of my constituents was scammed out of her entire retirement savings and then hit with a federal income tax penalty on top of that,” said Raskin, who flagged a bill he’s introduced on the topic, too. “It’s long past time that we get serious about this.”

Editor's note: This article has been updated to correct those that informed the report.