Our new paper examines the dramatic rise in fraud and calls for closer coordination between consumer protection and the policing of illicit finance.

The number of fraud reports to the Federal Trade Commission have surged from just over 325,000 in 2001 to approximately 6.5 million in 2024, reflecting how advances in technology and AI have made scams more pervasive, scalable, and financially devastating. While scams take many forms, they share one
thing in common: they end by duping a victim into sending money. Over the past two decades the boundary between illicit financial activity and consumer fraud has eroded as criminal networks increasingly rely on mainstream financial institutions, payment apps, and digital banking tools to move stolen funds. Despite this convergence, regulatory systems remain siloed, leaving consumers exposed to systemic failures.

This paper calls on policymakers and financial regulators to close this gap by aligning supervision and enforcement so that efforts to combat money laundering and illicit finance also deliver direct relief to scam victims. Without stronger safeguards, consumers will continue to bear the costs of institutional compliance failures.