Coming Soon: Your Last Chance to Avoid Billions of Dollars in Losses from Consumer Scams

A potential shift in liability for consumer losses from romance, imposter, and other social-engineering scams could place greater financial responsibility on banks and fintechs, particularly institutions holding receiving accounts for P2P transfers. Policymakers and the CFPB have advocated such changes since 2022, while Zelle and its bank owners have begun developing reimbursement practices for certain scam payments, a move that could influence other payment networks. Financial institutions report growing concern about fraud involving receiving accounts, first- and second-party fraud, and synthetic identities used as money mules, with Socure estimating that 1% to more than 4% of active deposit accounts at some institutions may involve synthetic identities. The company argues that institutions should prepare through stronger identity verification at account opening, portfolio reviews to identify compromised or fraudulent accounts, updated customer data and KYC checks, and real-time assessment of P2P credentials such as email addresses and phone numbers. Socure presents its fraud scoring, portfolio-scrubbing, and credential-risk tools as methods to reduce exposure to money mule activity and emerging counterparty risk as liability rules evolve.

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