BPI Statement for the Record for House Financial Services Hearing on Fighting Fraud

The Bank Policy Institute (BPI) appreciates the opportunity to provide input to the Subcommittee on the hearing "Fighting Fraud on the Front Lines: Challenges and Opportunities for Financial Institutions."^[1] BPI member institutions are deeply committed to protecting customers and the integrity of the U.S. financial system from fraud and scams. Fraud and scams have grown in both scale and sophistication, driven in large part by digital platforms, mobile communications and emerging technologies such as artificial intelligence. Banks are often the first to detect suspicious activity and the first place to which consumers turn when they realize they have been victimized, yet most scams begin outside the banking system: on social media, messaging apps, online marketplaces and telecom networks. A durable solution therefore requires a coordinated, whole-of-ecosystem approach that aligns incentives, clarifies responsibilities and prioritizes scam prevention at the source.

The Changing Fraud Landscape

Criminals increasingly exploit social media, messaging platforms and telecom channels to impersonate trusted institutions, distribute fraudulent content and conduct large-scale phishing and spoofing campaigns. Deepfake audio and video, synthetic identities and convincing fake websites and apps make it easier than ever for fraudsters to deceive consumers, including vulnerable populations and older Americans. Banks invest heavily in analytics, authentication and customer education to detect and disrupt these attacks, but they cannot control the design and policing of the platforms where scams originate.^{[2] [3]}

Regulators and policymakers have recognized the growing threat and the need for more consistent expectations across sectors. At the same time, the current framework for fraud and scam prevention remains fragmented, with different agencies overseeing discrete portions of the problem and relatively limited mechanisms for real-time information sharing across industries. Clarifying the responsibilities, encouraging cross-sector collaboration and updating outdated rules can significantly improve consumer protection without undermining access to fast, convenient payments.

Principles for an Effective Anti-Fraud Framework

BPI believes that a national strategy is needed to combat fraud and scams. This strategy should be grounded in the following principles:

• Prevention efforts should focus on the channels where scams originate, especially social media, messaging, online advertising and telecom networks.
• Responsibilities should be clearly allocated across sectors so that every link in the chain-banks, telecom providers, social media platforms, regulators and law enforcement-has meaningful obligations commensurate with its role and capabilities.
• Real-time, cross-sector information sharing should be encouraged and protected, building on the successful models used in cybersecurity.
• Banks acting in good faith to pause or scrutinize suspicious transactions should have appropriate legal protections and regulatory flexibility.
• The national strategy should coordinate efforts by the federal government, prioritize high-impact initiatives and avoid duplicative or conflicting mandates.

Policy Recommendations

To advance these principles, BPI recommends that Congress and the relevant agencies focus on five concrete areas of reform, consistent with the comprehensive analysis presented in BPI's recent Fraud and Scam Prevention Playbook.^[4]

1. Strengthen obligations for social media and digital platforms

Congress and regulators should establish baseline requirements for social media, online marketplaces and other digital platforms to verify advertisers and merchants, quickly remove fraudulent content and disrupt obvious scam-recruitment and impersonation schemes. "Know Your Merchant"-style standards for paid advertising and marketplace listings would help prevent fraudulent promotions before they reach consumers.^[5] Clear timelines for removing reported scam content, combined with reporting obligations for repeat offenders, would better align incentives across the ecosystem.

BPI has endorsed the bipartisan Safeguarding Consumers from Advertising Misconduct (SCAM) Act, introduced in the House by Representatives Dan Meuser and Lou Correa, which would require online platforms to verify advertisers, ban paid scam ads, establish rapid takedown obligations and strengthen FTC and state enforcement authority.^[6] This legislation represents an important step toward holding digital platforms accountable for fraudulent advertising and complements the broader anti-fraud framework outlined in this statement.

2. Enhance telecom and messaging network responsibilities

Telecom providers and messaging platforms are critical gatekeepers for phone calls and text messages used in scam campaigns. These firms should be expected to authenticate high-risk traffic, block known scam numbers and spoofed domains, and provide consumers with accessible tools to report suspected scams in real time.^[7]

Regulators should facilitate greater sharing of known scam indicators, such as numbers, URLs and message templates, across carriers and with banks, enabling earlier detection and intervention before consumers complete a fraudulent payment.

3. Provide safe harbors and regulatory flexibility for banks to protect customers

Banks should have clear authority and a safe harbor to delay or block transactions when they reasonably suspect fraud or a scam, especially where the pattern of activity or customer behavior is inconsistent with past usage. Modernizing rules that govern funds availability and check processing-while preserving prompt access to funds for routine transactions-would allow banks to better tailor controls to emerging fraud typologies without fear that well-intentioned protective measures will later be second-guessed.^[8] When banks act in good faith based on reasonable indicators of risk, they should not face additional liability for attempting to protect customers.

4. Facilitate real-time, cross-sector information sharing

Congress should encourage and, where appropriate, provide safe harbor protections for cross-sector information sharing related to fraud and scams. Building on established cybersecurity information-sharing frameworks, banks, telecom providers, social media companies and law enforcement should be able to exchange timely indicators of fraud and scam activity, consistent with privacy and consumer protection laws, to more quickly identify and dismantle emerging schemes.^[9] Clarifying antitrust and liability concerns in this context would help remove barriers that currently deter proactive collaboration.

5. Establish a National Anti-Scam Strategy

Finally, BPI supports the creation of a coherent federal strategy to combat fraud and scams, led by a central office or coordinator charged with aligning agency efforts and engaging the private sector. A National Anti-Scam Strategy could set measurable goals, prioritize high-impact initiatives and ensure that policies with respect to fraud and scams that govern payments, telecom, online platforms and financial services are mutually reinforcing. Elevated federal leadership would also help integrate consumer education campaigns, victim support resources and law enforcement efforts targeting domestic and international scam networks.

Conclusion

Banks are on the front lines of protecting consumers from fraud and scams, but they cannot solve this problem alone. Most scams begin on platforms and networks outside the banking system, and the most effective interventions will prevent criminals from ever reaching their victims. By aligning incentives across sectors, clarifying responsibilities and enabling real-time collaboration, Congress and the relevant agencies can dramatically strengthen protections for American households and businesses while allowing legal commerce to flourish.

BPI and its member institutions stand ready to work with anyone to develop and implement a comprehensive, practical framework to reduce fraud and scams. We appreciate the Subcommittee's attention to this critical issue and the opportunity to contribute our perspective.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. BPI produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud and other information security issues.

[2] Federal Bureau of Investigation. (2025). FBI releases annual Internet Crime Report. https://www.fbi.gov/news/press-releases/fbi-releases-annual-internet-crime-report

[3] Federal Trade Commission. (2025, March). New FTC data show big jump in reported losses to fraud: $12.5 billion in 2024. https://www.ftc.gov/news-events/news/press-releases/2025/03/new-ftc-data-show-big-jump-reported-losses-fraud-125-billion-2024

[4]Bank Policy Institute. (2026, February). Fraud and Scam Prevention Playbook.

[5] The Guardian. (2024, December 2). Meta to force financial advertisers to be verified in bid to prevent celebrity scam ads targeting Australians. https://www.theguardian.com/technology/2024/dec/02/meta-to-force-financial-advertisers-to-be-verified-in-bid-to-prevent-celebrity-scam-ads-targeting-australians

[6] U.S. House of Representatives. (2026, February 11). H.R. 7548, Safeguarding Consumers from Advertising Misconduct Act. https://www.congress.gov/bill/119th-congress/house-bill/7548

[7] Google. (2025). How we're using AI to combat the latest scams. https://blog.google/innovation-and-ai/technology/safety-security/how-were-using-ai-to-combat-the-latest-scams/[8] Bank Policy Institute. (2025, September). Statement for the Record: Fraud in Focus. https://bpi.com/wp-content/uploads/2025/09/BPI-Statement-for-the-Record-Fraud-in-Focus.pdf

[9] Cybersecurity Information Sharing Act of 2015, Pub. L. No. 114-113.