ICYMI: Takeaways from HFSC Fraud and Scams Report

Last month, House Financial Services Committee Republicans released a wide-ranging report examining the growing threat of financial fraud and scams—and the barriers preventing government and the private sector from responding as effectively as they should.

The report’s central conclusion is clear: Scams are not the province of any single domain. Criminals move across social media, messaging services, telecommunications networks, technology platforms and payment systems. The report raises a number of important issues, but for now, one takeaway stands out: stopping scams requires those sectors to work together, alongside law enforcement and government at every level.

Caroline Melear of the R Street Institute recently published a useful analysis of the report and several of its most important recommendations. Her analysis is clear and worth a read.

Make it easier to share actionable intelligence

→ R Street analysis: "Financial institutions face regulatory and legal barriers that prohibit them from sharing scam-related intelligence with one another and across sectors. The report addresses this issue directly, recommending legal safe harbors for good faith sharing of scam information—a vital step in stopping a scam before it can take root."

Give defenders the tools to keep pace

→ R Street analysis: "As noted in the report, agility and adaptability are vital to combating scams. This includes regulatory measures that allow both public and private institutions to leverage artificial intelligence (AI) to detect and deter scams before they can occur. The premise of any AI-related policy should be that we cannot effectively combat this threat if institutions are prohibited from using the same (or better) tools as scammers."

Build a whole-of-society response

→ R Street analysis: "While the report includes a robust and diverse set of recommendations, none of them would be effective in isolation. This is why it is vital that the United States develop a whole-of-society approach to combating scams that combines the innovation and agility of the private sector with the authority of the federal government and a strong focus on consumer best practices. The report is clear in its intent on all of these fronts."

The House Financial Services Committee’s report offers a serious set of findings and recommendations for strengthening the nation’s response to fraud and scams. Protecting consumers from increasingly sophisticated criminal networks should be a bipartisan priority—and meaningful progress will require action across government and the private sector.

You can read Caroline Melear's full analysis here, and find more information on our website here.

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