The president on Friday (March 6) signed an executive order calling for a review of which “operational, technical, diplomatic, and regulatory tools could be improved to combat transnational criminal organizations (TCOs)” engaged in cybercrime and scams.
For example, the order directs the attorney general to make cyberfraud/scam prosecutions a priority, focusing on “the most serious, provable offenses,” and to come up with recommendations for establishing a fund to reimburse fraud victims using seized or forfeited funds from fraudsters.
It also calls on the Department of Homeland Security to provide training and technical assistance to state and local law enforcement in dealing with cyber threats. The order also threatens countries “that tolerate these predatory schemes” with consequences that include sanctions, visa restrictions, foreign assistance limits, and “expulsion of complicit officials.”
“Ransomware attacks, phishing campaigns, financial fraud, sextortion schemes, and impersonation scams are often coordinated campaigns run by sophisticated TCOs,” the White House’s announcement said.
“In many cases, foreign regimes provide willing or tacit state support to cybercrime and predatory schemes, creating a shadow economy fueled by stolen identities, coercion, forced labor, and human trafficking.”
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The announcement noted that U.S. consumers reported losing more than $12.5 billion to cyber-enabled fraud, with senior citizens losing the most on average.
Research by PYMNTS Intelligence and Block, from the report “Financial Scams and Consumer Trust,” shows that close to 20% of American adults had experienced at least one scam in the last five years. The White House puts that figure considerably higher — 73% — but did not include a time frame for its findings.
“Technology has lowered both the cost and the speed of fraud. Scammers increasingly use digital marketplaces, peer-to-peer payment rails and AI-enabled impersonation tools to make schemes more convincing,” PYMNTS wrote earlier this year.
“Speed is a core weapon: nearly two-thirds of victims make a payment within 24 hours of first contact, and many do so within minutes. In more than half of cases, victims send money directly; in the rest, they unknowingly provide account credentials that allow funds to be drained,” the report added.
Meanwhile, banking executives appeared before the House Financial Services Committee last week to warn of the fraud-related threats facing their industry.
Fraud today is “increasingly industrialized, technology-enabled, cross-channel and scalable,” Joseph Schuster, a partner at Ballard Spahr, told the panel.
