Feds aim to tackle payments fraud

Consumers and financial institutions are being ravaged by payments fraud—to the tune of billions of dollars a year. The Federal Reserve wants to to reverse the trend. To that end, it is working with Secretary of the Treasury Scott Bessent and Federal Communications Commissioner Brendan Carr to build a public-private roundtable to come up with a solution.

"We'll be asking participants to share what they are currently doing to combat payments fraud, what informal data-sharing practices have proven effective, what prevention mechanisms they have seen that work, and what additional cross-sector or government efforts would be most helpful in this fight," Fed Vice Chair for Supervision Michelle Bowman told a May 5, 2026, Women in Housing and Finance Symposium.

Fraud attempts gaining sophistication, velocity

For as long as people have been exchanging money for goods and services there have been scammers out to defraud them of their money. But in recent years scam attempts have become increasingly sophisticated, and lucrative. "These sophisticated fraud attempts are occurring at an increasing velocity on a scale that targets significant numbers of consumers," Bowman told the group.

Total losses from non-credit card fraud across the financial system was $84 billion in 2024; of that amount just $21 billion was recovered.

"[I]n addition to the individual harm to consumers, ultimately fraud threatens the integrity and reliability of our financial system," Bowman said. "One of the Federal Reserve's most important roles is to regulate banks and payments, and fraud poses a significant risk for both. At its foundation, nearly every fraud affects a bank account or is tied to a payment that involves a bank account."

Fraud losses are a significant drain on financial institutions, particularly community and regional FIs. Bowman related the case of one bank that put its annual fraud costs at $40 million. "The financial impact of fraud is increasingly industrywide, with losses in the hundreds of millions of dollars annually for the largest institution."

Lower income households hardest hit

The Fed's data indicates one in five American adults experienced financial fraud or scams in 2024. While credit card-related fraud was the most common type of financial fraud, bank and investment accounts and other financial products hit 8 percent of households. And in most cases, there is no recourse or guarantee of recovery related to these frauds, Bowman noted.

The median loss for victims was $500, before any recovery, Bowman noted. "Even when victims were successfully able to recover funds, about half of those victims still lost money," she said. To put this into perspective, the Fed's data show that 13 percent of Americans cannot cover a $400 emergency expense using cash or its equivalent.

"For financially vulnerable households, a fraud loss can quickly escalate from an inconvenience to a crisis affecting their ability to cover essential expenses," Bowman said. But, she added, the effects cut across all demographics. "No particular individual is insulated from these threats," she said.

The banking system runs on trust, Bowman emphasized. "When one in five adults experiences fraud and $63 billion disappears from household accounts that trust erodes. But here's the challenge: the payment tools banks provide that allow customers to manage their financial lives—checks, debit cards, credit cards, and electronic payments—are instrumental for criminals trying to perpetrate fraud."

FI losses mount, too

In fact, a new report from the Fed, the 2026 Risks Officer Report,revealed that FIs are experiencing increases in both fraud attempts and losses. Debit card fraud is most widespread, the Fed reported. Fraud attempts involving debit cards were reported by 75 percent of FIs participating in the survey; loses were reported by 56 percent.

Additional findings from that report:

• Credit card frauds were reported by 24% of Fis; 14% experienced losses
• 68% reported check fraud attempts; 41 percent experienced losses
• Faster payments, which the Fed classified as bank mobile payments, were reported by 28% of Fis and losses were sustained by 15%
• 3% of Fis reported fraud attempts involving real-time payments and 1% actually lost money

The path forward

The Fed continuously enhances fraud detection, prevention and mitigation tools and services for use by banks, Bowman noted. But it's going to take more. That's why the Fed has committed to working with state and federal partners (like the FCC) and law enforcement to address the problem head on.

"The criminals are sophisticated, organized and relentless. Our approach must be equally robust," Bowman said.

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