ICYMI: Bowman Confronts Rising Fraud

This week, Federal Reserve Vice Chair for Supervision Michelle Bowman spoke in Washington, D.C. about the urgency and universality of the fraud crisis. Her message was clear: Fraud is a growing problem, and it must be addressed.

Here are the highlights:

Fraud has been around for as long as commerce. What is different today is the scale, sophistication, and impact of modern fraud.

• "From ancient Greece to the Ponzi schemes of the 1920s to the telemarketing scams of the 1990s, fraud has always evolved alongside commerce. But in today's environment of rapid technological advances, what we are seeing today is different in scale, sophistication, and impact."
  

Many Americans don't have enough cash on hand to weather fraud.

• "Let that sink in—thirteen percent of Americans don't have $400 in cash on hand for an emergency. The median fraud loss before recovery is $500. Therefore, it should not be surprising that 30 percent of Americans who lost money in an online scam said that it negatively impacted their financial condition."
  

Combating fraud demands a coordinated, system-wide effort.

• "Effectively addressing payments fraud is a complex and wide-ranging challenge that extends well beyond the Federal Reserve Board, and beyond the broader responsibilities of the Federal Reserve System. To be effective, this effort requires a comprehensive, multifaceted response and no single agency or private-sector entity can address this threat alone. Effective solutions demand coordinated action."

Criminals are organized and relentless. Our response must be equally robust.

• "We must also strengthen bank defenses and improve victim recovery. We must examine whether our regulations address modern fraud and are positioned for the threats consumers will face in the future. And we must ensure the financial system serves everyone safely and securely. The criminals are sophisticated, organized, and relentless. Our approach must be equally robust."

Fraud is a crisis. It touches everyone, and as technology advances, the tools available to bad actors only become more dangerous. To fight back, stakeholders across government and the private sector must work together to ensure that Americans' economic security is airtight.

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