Fed's Bowman says consumer fraud poses growing risk to financial system

Investing.com -- Federal Reserve Vice Chair for Supervision Michelle Bowman said Tuesday that consumer fraud and scams present increasing risks to the financial system, noting that nearly every fraud involves a bank account or payment tied to one.

Bowman said regulators are considering measures to strengthen the fight against consumer fraud as banks make unprecedented investments in security and consumer education. She described addressing fraud as one of the agency's most important roles, though it may not appear obvious.

A Fed survey indicated one in five American adults experienced financial fraud or scams in 2024, according to Bowman.

Bowman announced she will hold a roundtable with Treasury Secretary Scott Bessent and Federal Communications Commission Chairman Brendan Carr to discuss the issue. The meeting will ask participants to share their current efforts to combat payments fraud, effective informal data-sharing practices, successful prevention mechanisms, and what additional cross-sector or government efforts would help.

The Fed is developing a comprehensive strategy that uses its authorities to prevent payments fraud and protect consumers, businesses and supervised institutions, Bowman said. The agencies are reviewing enhanced guidance and resources for banks, along with methods to strengthen bank defenses and improve victim recovery.

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