Financial scams are growing at an alarming rate, aided by AI and the ability to trick people anonymously and online. In 2024, FTC data show consumers reported losing $12.5 billion to fraud, a 25 percent increase over the prior year, with actual losses likely far higher. Banks are witnesses to this fraud and are highly motivated to stop it, as they are the front line in dealing with those devastated by its effects, but they need help that they aren’t getting.
Most fraud and scams originate on social media, communications and messaging platforms. A consumer who receives a text or call from a reputable business logically assumes that they are talking to that business, not an overseas scammer. According to the FTC, 36 percent of 2024 fraud reports involving a contact method originated via phone or text, leading to $1.5 billion in losses. Social media led to $1.9 billion in losses, or 15 percent of all reported losses. JPMorgan Chase reported that nearly 50 percent of the fraud complaints it received in the second half of 2024 was linked to social media. A recent BPI member survey found that, among Zelle-related fraud in Q4 2024, where a contact method was recorded, 37 percent began with a spoofed call or text, while 52 percent involved social media.[1]
The banking industry can’t thwart fraud-related activity that occurs on these platforms. Once the fraud has already been perpetrated, the banks are left playing catch-up. However, the nation’s telecom and social media companies can, and should. Tech giants can prevent criminals from sharing intel and tactics on their platforms. They have the data, tools and visibility to detect and mitigate fraud and scams early and should take proactive steps to collaborate with banks and with each other. If regulations are a barrier to their doing so, these firms should be leading calls for reform, not using the regulatory landscape as a rationale for inaction.
While some tech and telecom providers have taken steps to confront the rise in fraudulent use of their networks, their response has been fragmented, episodic and generally insufficient.[2]
The Role of Telecom, Tech and Social Media in Fraud
Criminals prey on consumers through social media, mass text campaigns and spoofed phone calls, using tactics that impersonate trusted brands or exploit social engineering to deceive victims.
Recent in-depth reporting from The Economist and the Wall Street Journal depicted the complexity of these global criminal enterprises. These “fraud farms” serve as call-center style operations, often based in Southeast Asia, that rely on workers (sometimes trafficked) to send scam texts, impersonate banks and run investment frauds.[3] Criminals also hijack real social media accounts, deploy deepfake videos, run fake ads to steal funds and data and leverage these channels to train and recruit new scammers.
Misaligned Incentives
To effectively combat scams, tech platforms must prioritize customer protection. They are in a strong position to prevent abuse, but their incentives often work against proactive action. Telecoms profit from every text sent and account maintained, even those used for scams. While some take down reported numbers, it’s unclear how thoroughly they investigate broader fraud networks. In some cases, carriers sell services to banks to trace scam texts – monetizing the problem rather than preventing it.
Social media platforms earn ad revenue from scam content. For example, in an ongoing legal case, Meta is accused of allowing over 230,000 scam ads featuring Australian billionaire Andrew Forrest’s likeness to run across its platforms.[4]
These companies have the capability, but not the financial incentive, to prevent fraud at the source.
Actions to Mitigate Scam Attacks
For decades, laws like the Bank Secrecy Act have helped prevent criminals from exploiting the U.S. financial system. But fraudsters targeting consumers directly via social media, messaging and spoofed calls face far less scrutiny, as these channels remain far less regulated despite their role in originating fraud and scams. To protect consumers’ financial security, these industries must be incentivized to detect and prevent scam activity.
Actions for Social Media Companies
Social media companies should be required to have fraud and scam prevention programs in place to proactively remove scammers and criminals from their platforms. Actions that could be taken include:
- Implementing robust identity verification and advertisement validity controls to prevent fraudulent accounts and ads from being created, as has been done in the UK, Australia and Taiwan.[5]
- Expediting the removal of impersonated profiles, fraudulent ads and scam marketplace listings when notified by banks and users.
- Actively monitoring and removing known scam training sites that recruit criminals and teach them how to conduct scams.
- Standardizing the process for financial institutions to report scam ads to be taken down.
Actions for Telecommunication Companies
Communications and messaging providers should also be obligated to implement programs that detect and prevent the use of their networks for consumer-targeted scams. Actions that could be taken include:
- Ensuring all calls in the United States can be authenticated by both small and large carriers.
- Alert consumers in real time to unauthenticated calls and messages originating from outside the United States.
- Alert consumers when a call or message is suspected of being a scam, similar to Google Messages’ recently released capability.[6]
- Major carriers should enforce anti-fraud controls and requirements for Mobile Virtual Network Operators (MVNOs) that lease networks from them.
Social media, telecom and messaging platforms should also enhance their sharing of critical information between institutions for fraud prevention and disruption. There has been ongoing dialogue between financial institutions, telecom and social media companies about sharing intelligence to combat scams. In the U.S., these efforts have primarily focused on enabling takedowns after financial institutions or retailers identify scam activity. In telecom, this has mostly occurred through bilateral agreements or incident response processes, which have proven insufficient to scale.
Many regulatory and legal hurdles stand in the way of sharing information between industries and organizations for fraud prevention purposes. The industries must work together to advocate for the removal of these barriers.
Conclusion
Protecting customers from fraud demands earlier, proactive action from telecom, tech and social media companies to stop criminals from abusing their networks. It’s time for these companies to take responsibility for how their platforms are exploited. If regulations stand in the way, they owe it to their customers to push Congress and regulators for change. Financial institutions cannot solve this problem alone and need cross-industry collaboration with tech and telecom to protect their mutual customers. Doing nothing, or doing the bare minimum, is no longer acceptable.
[1] Based on a survey of five BPI member banks with assets over $100 Billion.
[2] See HHRG-119-IF02-Wstate-BercuJ-20250604.pdf, How we’re using AI to combat the latest scams and Meta expands FIRE fraud partnership – critics say more needed.
[3] Meta Battles an ‘Epidemic of Scams’ as Criminals Flood Instagram and Facebook – WSJ
[4] Meta must face Australian billionaire Forrest’s US lawsuit over scam Facebook crypto ads | Reuters
[5] Meta to force financial advertisers to be verified in bid to prevent celebrity scam ads targeting Australians | Scams | The Guardian
