Michelle W Bowman: A Coordinated Approach to Consumer Fraud Protection

Why It Matters

Fraud threatens the stability of the payment infrastructure and imposes sizable financial losses on both consumers and banks, making coordinated action essential to preserve confidence in the U.S. financial system.

Key Takeaways

• 21% of U.S. adults experienced fraud in 2024, per SHED survey.
• Non‑credit‑card fraud cost $84 billion; only $21 billion was recovered.
• Median loss for victims was $500, half still lose money after recovery.
• Community banks cite fraud as one of their largest expense categories.
• Fed plans shared fraud taxonomy and public‑private roundtables to boost detection.

Pulse Analysis

The scale of consumer fraud in the United States has reached a tipping point. Advances in digital communication, social‑media impersonation, and phishing have turned everyday transactions into high‑risk events, with 21 percent of adults reporting scams in 2024. Non‑credit‑card fraud alone accounted for $84 billion in losses, highlighting how criminals are exploiting bank‑account products and payment platforms that were once considered secure. This surge not only drains household finances—median victim losses sit at $500—but also undermines the fundamental trust that underpins the banking system.

For regulators, the numbers are a call to action. The Federal Reserve’s supervisory mandate includes safeguarding payment integrity, and the recent data shows that fraud is now one of the largest expense lines for community banks, with some institutions absorbing $40 million annually. The Fed’s 2025 SHED survey underscores that the problem cuts across demographics, affecting older adults and low‑income households alike. In response, the Board is crafting a multi‑layered strategy: refining guidance for banks, deploying advanced fraud‑detection models on its payment platforms, and standardizing a common fraud taxonomy to improve data sharing across institutions.

Looking ahead, the success of these initiatives hinges on collaboration. The Fed plans to convene a public‑private roundtable with the FDIC, OCC, state regulators, law‑enforcement, and industry players to exchange best practices and align on prevention tools. By harmonizing language, sharing real‑time alerts, and bolstering consumer education, the financial ecosystem can better anticipate and neutralize emerging scams. Ultimately, a coordinated approach promises to reduce the $63 billion net loss consumers face each year and restore confidence in the nation’s payment infrastructure.