Government Takes on Fraud with Proposed “Payments Fraud Task Force”
- The United States Government is addressing fraud
- A bipartisan bill, the Recognizing and Averting Payments Scams (TRAPS) Act, has been introduced
- 2.6 million consumers reported fraud incidents in 2024
We've seen recently the U.S. Government and its agencies stepping up to take on financial crimes. For check fraud specifically, there were several actions taken, including:
Additionally, Congress focused their attention on mail carrier assaults and robberies, reintroducing the Postal Police Reform Act, along with other actions like a Congressional Hearing.
Now, according to a new article from PaymentsDive, U.S. Senators are pushing for a "Payments Fraud Task Force."
Recognizing and Averting Payments Scams Act
The Recognizing and Averting Payments Scams Act is a bipartisan bill, bringing together regulators and other law enforcement entities to study payments scams and propose methods and procedures to combat them.
According to PaymentsDive:
Under the legislation, the Treasury Department would chair the task force, which would also include staff from the Justice Department, Consumer Financial Protection Bureau, the Federal Communications Commission and the FTC, plus industry representatives.
The task force is expected to analyze the current landscape of payments and suggest changes to current laws and regulations, along with best practices to approach anti-fraud efforts at the state, federal, and local levels.
The Act appears to have major support from multiple payment associations, including AARP, the American Bankers Association and the Electronic Transactions Association:
“A task force will definitely help because you’re bringing together all of the entities who are working on this and it puts them in the same room,” Scott Talbott, a spokesman for the Electronic Transactions Association said Wednesday. “The thieves thrive on divide and conquer and it will take everybody working in concert to fight this fight.”
What We Can Expect from the Payments Fraud Task Force
While the Recognizing and Averting Payments Scams Act is still making its way through the process, it's encouraging to see the U.S. Government and its elected officials taking the initative to protect U.S. consumers from fraud -- as 2.6 million consumers reported fraud incidents in 2024.
However, from the perspective of financial institutions and their fraud fintech vendors, the efforts should be positive but also put more pressure on the industry to tackle fraud. Could the task force further penalize FIs for failing to stop fraud, or require increased efforts from FIs to protect their consumers? That remains to be seen.
That's why we recommend FIs prepare now by ensuring the right technology is being deployed to fight fraud -- not just to protect the consumer and the FI, but to ensure that, if regulations become stricter, you are better prepared and not left scrambling. This includes check fraud detection technologies like image forensic AI -- a top-of-mind topic for regulators.
Tell us your thoughts in the comments below.
