7 Recommendations to Better Combat Financial Scams and Fraud

Washington, D.C. — The Bank Policy Institute submitted a statement for the record today at a U.S. Senate Banking Subcommittee hearing on “Examining Scams and Fraud in the Banking System and Their Impact on Consumers.” The statement highlights banks’ efforts to protect customers against scams and fraud and makes seven recommendations the government can take to help the industry further mitigate these risks.

“The issue of combating scams and fraud is a nationwide challenge, one in which banks invest substantial resources to protect their customers and their customers’ money. Such a far-reaching challenge demands comprehensive, multi-dimensional solutions,” the statement remarked. “Collaboration across the private and public sectors is crucial to help protect the American consumer from criminals who seek to defraud them.”

$9.3 billion is spent annually on fraud detection and prevention tools, according to Juniper Research.

Banks employ many safeguards to help protect customers including consumer education campaigns, access and encryption controls, account monitoring and real-time alerts. However, better coordination and collaboration with government would strengthen banks’ efforts to prevent and detect scams and fraud, particularly when these efforts are perpetuated by foreign nationals or rogue nation-states. In its statement, BPI makes the following seven recommendations:

  1. Appoint a federal director to take ownership on fraud and appoint a single federal agency as the national champion to lead and coordinate the fight against fraud.
  2. Equip the U.S. government to play a leading role in helping educate consumers on how to protect themselves.
  3. Promote and enable data and intelligence sharing between institutions and ensure laws are in place that support sharing of information.
  4. Ensure all sectors are properly held accountable to help mitigate fraud and scams.
  5. Increase law enforcement resources needed to prosecute fraudsters and ensure the sentences for fraud are effective deterrents.
  6. Modernize payments by promoting the use of secure electronic payment methods and reducing the use of paper checks.
  7. Eliminate screen scraping as a way for third parties to access banking information.

To access the full statement, please click here.


About Bank Policy Institute

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

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Austin Anton
Bank Policy Institute

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