WASHINGTON—Federal Reserve Vice Chair for Supervision Michelle Bowman warned that consumer fraud has become a growing threat to both households and the broader financial system, saying scams are escalating in “scale, sophistication, and impact” as criminals increasingly exploit digital payments and banking tools.
Speaking at the 2026 Women in Housing and Finance Symposium, Bowman said one in five U.S. adults experienced financial fraud or scams in 2024, according to Federal Reserve survey data.
Bowman said fraud losses are imposing significant costs on financial institutions, noting community banks now rank fraud losses among their largest expenses, while some regional institutions report annual fraud-related costs reaching tens of millions of dollars. She added that criminals are increasingly using social engineering schemes, fake delivery alerts, impersonation scams and malware-linked text messages to gain access to accounts and payment systems.
Citing the Federal Reserve’s 2025 Survey of Household Economics and Decisionmaking, Bowman said non-credit card fraud generated an estimated $84 billion in losses across the financial system in 2024, with only $21 billion recovered, leaving consumers with roughly $63 billion in net losses. Median fraud losses totaled approximately $500 per victim before recoveries, she said, adding that many Americans lack sufficient emergency savings to absorb such hits.
Bowman said fraud risks now extend beyond individual consumers and increasingly threaten confidence in the banking system itself. More than half of non-credit card fraud cases involved bank account products, while bank transfers and payments accounted for nearly 40% of reported aggregate fraud losses in 2024, according to the speech. She noted banks are investing heavily in fraud detection and consumer education even as scammers continue adapting rapidly, often operating from overseas fraud centers beyond the reach of U.S. law enforcement.
The Federal Reserve, working alongside the FDIC and OCC, is now evaluating additional responses, including enhanced guidance for banks, expanded fraud-detection tools and broader coordination across government and industry, Bowman said. She also disclosed plans for a forthcoming public-private fraud roundtable involving Treasury Secretary Scott Bessent and FCC Chair Brendan Carr focused on data-sharing, scam prevention and cross-sector cooperation.
“The criminals are sophisticated, organized, and relentless,” Bowman said. “Our approach must be equally robust.”