The Proposal
On June 12, 2025, four US senators came together to announce plans to fight consumer and commercial online scams in the United States. Senators Mike Crapo, an Idaho Republican, and Senator Mark Warner, a Virginia Democrat were joined by Senators Jerry Moran, a Kansas Republican, and Raphael Warnock, a Democrat from Georgia, to propose a task force. These senators are proposing a bill to establish the Taskforce for Recognizing and Averting Payment Scams Act or the TRAPS Act.
The goals of the bill are:
- Study payment scams
- Suggest ways for lawmakers and regulators to combat scams, including formulating industry best practices.
The task force will be chaired by the US Treasury with a variety of members with key backgrounds to help identify and mitigate the problem of both consumer and business scams. Some of the members would include representatives from government (including the Federal Trade Commission, the Federal Communications Commission, the Department of Justice, the Federal Reserve, the Office of the Comptroller of the Currency, the National Credit Union Administration, The Federal Deposit Insurance Corporation), banking, a credit union, a digital payment network, a consumer group and a technology or an industry representative from online platforms.
The bill proposes the task force undertake several key activities, including but not limited to:
- Examine current trends and developments in payment scams, identify effective methods for preventing such scams, and issue recommendations to enhance efforts to identify and prevent such activities.
- Adopt a cross-sector approach to ensure its recommendations reflect the full scope of the issue, given that scams impact individuals across a wide range of industries, including financial services, telecommunications, and technology (digital platforms).
- Review existing international solutions that can be applicable in the US to help mitigate this problem.
- Determining a strategy for education programs that better equip consumers to identify, avoid, and report payment scam attempts to the appropriate authorities.
- Coordinating efforts to ensure perpetrators of payment scams can be identified and pursued by law enforcement.
- Determining whether any additional Federal legislation would be beneficial for law enforcement and industry in mitigating payment scams.
The key outcome of the bill will be for the Taskforce, within one year, to report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives:
- The results of the reviews and evaluations of the Task Force.
- A proposed strategy identified to attack scams.
- Any legislative or regulatory recommendations that would enhance the ability to detect and prevent payment scams.
- Recommendations to enhance cooperation among Federal, State, local, and Tribal authorities in the investigation and prosecution of scams and other financial crimes, including harmonizing data collection, improving reporting mechanisms and streams, estimating the number of complaints and consumers affected, and evaluating the effectiveness of anti-scam training programs.
Why is This Important?
The US is woefully behind in fighting online scams. The FBI IC3 recently provided the 2024 scam loss numbers at $16.6 billion. And these are just reported losses. These scams include impersonation scams, romance scams, investment scams and business/vendor/real-estate email compromise scams.
Elder losses were over $4.8 billion with an average elderly loss of over $83,000. And elder losses increased 43% from 2023. These losses are financially and emotionally devastating.
If you include unreported losses, the number could exceed over $160 billion in 2024. The reported losses alone are increasing about 33% per year.
Most of these crimes start with a telephone call, a text message (or WhatsApp/Instagram message), someone meeting a criminal on social media/dating site, or involvement with a bogus ad or investment web site. Then the victim is psychologically groomed over time to send money via the banking payment rails. Sometimes, the scam can be much more immediate (we have kidnapped your granddaughter, your son caused an accident, or the help desk scam).
What is most important to understand is the criminals are international organized crime groups. And the monies stolen are used for drug trafficking, terrorism, weapons creation, human trafficking and more. This requires a national response to tackle these crimes.
What Are Other Countries Doing?
Several countries have done a better job at addressing consumer scams. The UK began in 2019 to require banks to have scam controls. The major UK banks also voluntarily began to reimburse Authorized Push Payment (APP) scam losses. Then in 2023, the regulators required banks add money mule controls. In 2024, new government legislation required banks to reimburse for consumer scam losses up £85,000.
In Australia, in 2023, the Australian Banking Association introduced the voluntary Scam-Safe Accord where banks agreed to create a scam strategy and add scam controls. In 2025, Australia passed the Scam Prevention Framework (SPF). The SPF will require banks, telcos and digital platforms to have scam controls and if they are not properly deployed, could require reimbursement for consumer scams. The SPF will go into effect in 2026.
Other countries, including Singapore, Thailand, New Zealand and the Philippines have added strong scam controls and requiring consumer reimbursement in certain circumstances. Singapore includes banks (and telcos in some cases), while Thailand involves banks, telcos and digital platforms (similar to Australia).
What Will Be the Outcome?
This Taskforce needs to create the urgency for the US government to act, but also banks, telcos and digital platforms need to step up with controls to help prevent these crimes.
It is also important to remember the Aspen Institute has an initiative underway to address consumer scams. This involves some of the same potential members the Taskforce will have. And the Aspen Institute will have a report out in late September.
Closing Thoughts
Although quite late, it is great to see these four senators come together in a bipartisan way to help fight online scams. We can learn a lot from the programs other countries have already initiated.
There are many proven solutions from around the world that can be applied to help banks, telcos and digital platforms fight these scams. Bogus online investment web sites and ads must be taken down. There must be proper KYC for dating sites and social media customers to help identify and remove criminals.
The US government needs to lead this fight. Government leadership has been absolutely essential for the success we see in these other countries.
A successful program must also eradicate the large scam compounds around the world, with pressure put on countries to shut these compounds down. Law enforcement must be funded to fight the other criminals physically in the US and other countries. The FBI, US Secret Service, Interpol and other international law enforcement agencies must continue to work together to arrest these criminals.
We also need education on consumer scams and support for the victims of these crimes.
Many trade associations and consumers groups, including the American Bankers Association, AARP and the Electronic Transactions Association, support this legislation.
It is never too late to do the right thing. Let’s go America.
