New FTC report shows Americans lost a record $10 billion to scams and fraud last year; more than 2022’s record-high $8.8 billion and nearly 300% higher than 2020

Rep. Harder and his colleagues are calling for new counter-fraud technologies and stronger public-private coordination to stop financial fraud

February 13, 2024 - WASHINGTON –  Representative Josh Harder (CA-9) is sounding the alarm and calling on congressional leadership in the House and Senate to address financial fraud and scams, which have been skyrocketing since 2021. A new report shows that in 2023, fraud cost Americans more than $10 billion – a nearly 300% increase over 2020 when scams and fraud cost Americans $3.5 billion. The losses for 2023 broke 2022’s record of $8.8 billion. The true numbers are likely much higher because victims of scams often feel too embarrassed or ashamed to file reports. The most common and costly form of financial fraud is imposter scams where criminals pretend to be government agencies or well-known companies. These scams are also becoming more difficult to detect thanks to AI and other technology.

In a bipartisan letter to Senate Leader Schumer, Speaker Mike Johnson, Senate Minority Leader McConnell, and House Minority Leader Jeffries, Rep. Harder called out these disturbing trends and pushed for new anti-fraud efforts across agencies and support for innovative technology solutions to prevent financial fraud.

“Criminals are getting better and more advanced at weaponizing AI and other high-tech tools to steal our hard-earned money. We need better anti-fraud tools so we can keep up with scammers and protect hard-working families,” said Rep. Harder. “Last year, Americans lost over $10 billion to fraud. That’s almost 300% more than 2020. We need 21st-century solutions to stop these career criminals and scammers.”

In the letter, Rep. Harder and his colleagues call for a whole-of-society effort to address fraud and specifically:

• Encourage information sharing between government and private sector participants.
• Develop best practices for relevant stakeholders to counter the increasing threats of financial fraud.
• Encourage innovations in counter-fraud technologies, data analytics, and approaches.

This continues Rep. Harder’s work to protect families and taxpayers from financial fraud and scams. 

Read the full letter HERE or below.

Dear Congressional Leaders:

We write in support of the “financial fraud” language included within the Senate Appropriations Committee’s FY24 Financial Services and General Government bill report.[1] The language directs the Treasury Department to lead a multisectoral whole-of-society effort to counter the increasing threats associated with financial fraud. This public-private partnership will encourage information sharing between government and private sector participants, develop best practices for relevant stakeholders, and encourage innovations in counter-fraud technologies, data-analytics, and approaches. Considering the persistent rise of scams and fraud reported to the Federal Trade Commission (FTC), [2] we urge Congress to respond in scale through this enhanced paradigm for counter-fraud collaboration among relevant stakeholders.

Earlier this year, the FTC reported on what it described as “disturbing trends” reflected in its annual report, the Consumer Sentinel Network Databook.[3]Last year, Americans filed over 2.3 million fraud reports to various government agencies amounting to $8.8 billion in losses, a 30 percent increase over already elevated numbers.[4] In 2021, correlating with American consumers’ increasing use of online and digital platforms during the height of the COVID-19 pandemic, fraud reports increased by an astronomical 70 percent.[5] Additionally, financial losses connected to imposter scams – where fraudsters imitate well-known business entities or government agencies – skyrocketed to $2.6 billion, making imposter scams the leading cause of fraud reports. Unfortunately, the true financial impact of fraud likely exceeds these numbers as many fraud attacks are unreported by consumers or are reported to entities that do not contribute data to the FTC.

Governments, law enforcement, and the private sector often work vigorously to prevent fraud and make victims financially whole, even at their respective expenses. For example, the Bank Policy Institutes Technology Policy Division, BITS, created by the largest banks provides an executive-level forum to discuss efforts to reduce fraud and improve cybersecurity. BITS often convenes its members, regulators, government agencies and technology firms to advance collaboration. Additionally, various government agencies have specific fraud prevention programs like the DOJ’s Elder Fraud Initiative, which coordinates law enforcement efforts, the Secret Service’s Cyber Fraud Task Forces, and others on both the federal and state levels. Nonetheless, we are unaware of any umbrella body, seated at the federal government, which coordinates all our society’s efforts to prevent the proliferation of financial fraud. This is the case despite fraudsters and scammers employing similar techniques across financial and government systems alike to trick Americans out of their money. Although consumers are sometimes “made whole” by the Federal Government or the private sector, the full scope of financial harm can be, nonetheless, devastating for vulnerable victims as they “must then spend days or weeks proving they were defrauded so they can get money they had counted on for rent, groceries, and other bills.”[6] The shame associated with being defrauded often leads to underreporting as many victims feel “embarrassed, guilty, or believe there is nothing police can do,” according to the AARP.[7] This consumer dynamic only contributes to further erosion of public trust in government and the financial marketplace.

Congress has done critical legwork on these issues, exploring the contours of fraud that compromise aspects of our pandemic programs and financial markets. In a hearing before the House Oversight Committee, for example, an official from the U.S. Secret Service stated that a “small team at a particular OIG office or an auditor at a financial institution should not be expected to detect and combat sophisticated fraud schemes alone.” Collaboration between law enforcement agencies, both domestic and international, and with the private sector, is essential for combating modern crimes.”[8] We view the Senate Appropriations Committee’s fraud language as a critical step towards the type of collaboration needed to adequately prevent fraud and scams on the front end.

In conclusion, we acknowledge your continued efforts to negotiate a deal to fund our federal government despite the difficult political environment. We believe that encouraging an official public-private sector response to our nation’s increased incidences of fraud and scams is a bipartisan and bicameral policy proposal that should remain within any final appropriations agreement.

Sincerely,

Henry Cuellar             Jerry L. Carl                Josh Gottheimer                     Blaine Luetkemeyer

Joyce Beatty               Michael Guest             Emanuel Cleaver, II                Young Kim

Wiley Nickel              Gregory W. Meeks     Bill Foster                               Sean Casten

Steven Horsford          Juan Vargas                Debbie Wasserman Schultz            Marcy Kaptur

Ritchie Torres             Jim Himes                   Josh Harder                             Sanford D. Bishop, Jr.

Brittany Pettersen       Vicente Gonzalez

Source: Congressman Josh Harder