Lawmakers aim to curb fraud losses through industry and regulator task force
A bipartisan group of US senators, including Reverend Raphael Warnock, Mike Crapo, Mark Warner and Jerry Moran, has introduced new legislation to combat the growing problem of payment scams.
The bill announced on June 13, known as the Task Force for Recognising and Averting Payments Scams (TRAPS) Act, would create a federal task force to coordinate efforts between regulators, law enforcement and the payments industry.
The move comes as fraud losses across the US continue to climb. According to the Federal Trade Commission, consumers reported losing more than $12.5 billion to fraud in 2023, a 25 percent increase from the previous year. The legislation highlights particular concern for scams that target older Americans.
“Scams and financial schemes continue to target Georgians’ bank accounts, especially our seniors who work their entire lives to build savings,” said Senator Warnock.
Payments industry to face growing regulatory engagement
Under the proposed law, the task force would be led by the US Department of the Treasury and include key financial and communications regulators, such as the Consumer Financial Protection Bureau, Federal Communications Commission, Federal Trade Commission, and Department of Justice. It would also include representatives from the private sector.
The task force would be required to examine current practices across the payments landscape and recommend changes to legislation and regulation. It would publish an initial report with findings and guidance, and update that report annually for three years.
The bill is backed by several major trade associations and financial institutions, including the American Bankers Association, Consumer Bankers Association, National Bankers Association, Electronic Transactions Association, Early Warning Services, and America’s Credit Unions.
Senator Crapo commented, “We can – and should – better equip law enforcement and regulators with the tools to go after scammers and prevent scams before they happen.”
Implications for payments firms and fintech providers
The legislation could lead to closer scrutiny of payment technology providers and platforms. Companies like Mastercard, PayPal and emerging fintech firms may face new expectations to collaborate with regulators and apply uniform fraud prevention standards.
While the bill does not propose direct regulation of specific companies, its recommendations could shape future compliance requirements and consumer protection norms.
Fraud prevention has become a key competitive and regulatory issue in the sector, especially as digital payment volumes grow. The task force’s annual reports may also influence how firms design and deploy customer verification, transaction monitoring, and dispute resolution processes.
Senator Warner said the goal of the legislation is to “bridge the gap between law enforcement, regulators and the financial industry in order to better protect Americans’ financial welfare.”
Legislation reflects growing global focus on payment scam prevention
The TRAPS Act signals a broader trend of governments increasing oversight of digital payments infrastructure in response to rising cybercrime and social engineering scams.
While focused on the US market, the initiative could encourage similar models abroad, especially in jurisdictions where consumer fraud losses are climbing.
The bill has been referred to the appropriate Senate committee. If passed, the task force could begin work within months, with its first report expected in 2026.
