Financial scams cost American consumers and businesses billions of dollars a year, so it’s good that Republican and Democratic legislators are taking notice. The House Financial Services Committee voted unanimously to advance H.R. 4936, the Taskforce for Recognizing and Averting Payment Scams Act, and the Senate is considering a similar bill. The bills would create a bipartisan task force to address payment scams. The task force would bring together federal agencies, banks, online platforms, telecommunications carriers, and other key players in developing coordinated approaches to stopping scams.
Scams are a real problem. But how do concerns about scams intersect with concerns about growing federal power, enforcement abuses, and overregulation?
Unlike regulations such as price controls, catching bad actors who cheat people strengthens markets. The goal is market-friendly, but the mechanisms might not be. Policymakers addressing a crisis may, for instance, create institutions, rules, or practices that erode liberty, markets, and individual rights. With this caveat in mind, I offer recommendations below that a new task force on scams should consider:
Civil liberties should not be an afterthought. Data-sharing among private-sector entities like banks and telecommunications carriers will help stop scams. But law enforcement might also seek access to this data. Governments’ powers to fine, arrest, and imprison people are unique and endanger liberty. Policymakers should recognize that warrantless access to Americans’ financial data, like access to location data, violates constitutional privacy rights. Digital driver’s licenses—like other national identification systems—could be abused. Safeguards should be in place when government actors access data or control identification systems: The current legal framework too often ignores constitutional safeguards.
Be wary of scapegoating financial intermediaries. Because many scammers are based in troubled countries beyond the reach of American law enforcement, policymakers might be tempted to load responsibility for scams onto intermediaries like banks or payment companies, even when they are not at fault and try to alert consumers to danger. Shifting losses from consumers to financial service providers without attention to fault will raise the cost of financial services and do little to stop criminals. Policymakers should keep working on the hard problem of recovering ill-gotten gains from bad actors far and near.
Remember core values in considering new payment technologies. Payment systems are tools that can be used for good or ill. Decentralized, instantaneous, and untraceable systems—including cryptocurrencies—can help preserve liberty and prosperity worldwide. And, like cash, innovative payment technologies can be used by bad actors. This calls for discussion of whether and when new systems need accountability. But authoritarian regimes already use know-your-customer rules to retaliate against human rights advocates. Fighting scams does not justify adopting anti-technology policies, crypto surveillance, or central bank digital currencies. Solutions should reflect the promise of innovation.
Be skeptical about creating new rules and institutions. Between the federal government and the 50 states, there are plenty of enforcement staff and many laws that address fraud—including wire fraud, elder abuse, identity fraud, theft by false pretenses, securities fraud, conversion, and unjust enrichment. The Code of Federal Regulations has grown from roughly 10,000 pages in 1950 to roughly 62,000 pages in 2026. There’s no shortage of rules. Revising current laws and reforming existing institutions instead of enacting new laws and creating new agencies will reduce complexity, duplicative rules, and redundant institutions.
Going after criminals who perpetrate scams is an appropriate role for government. But policymakers should take a thoughtful approach to ensure that new mandates are consistent with principles that safeguard liberty, foster individual responsibility, and reflect appropriate incentives.
