Can America Cure Its Online Fraud Epidemic?

Other Western countries use regulation to stop the spread of crime. But the US is lagging, leaving millions exposed-and the problem may soon get worse

- SHAUN WATERMAN

IT WAS A BANK TELLER WHO FIRST noticed something was wrong, recalls Ken Westbrook, a retired federal employee. His 86-year-old mother had been to her bank to pick up the latest in a series of cashier's checks she was sending to online fraudsters who had convinced her on telephone calls from overseas that her account was at risk from hackers and that she must move her retirement savings to keep them safe.

"The teller must have realized something was going on and she told my mother to talk with someone, discuss this with her family," Westbrook told Newsweek.

After his mother contacted them, he and his brother were able to get the delivery of the last check stopped.

But most of his mother's life savings were already gone, and she'd joined the 2.6 million Americans who reported falling victim to fraud last year. Younger Americans are more likely to be victims, but older victims, such as Westbrook's mother, suffer much larger losses.

The losses across all age groups in 2022, according to the Federal Trade Commission, were $9 billion five-fold rise in three years and the equivalent of what Americans spend in Black Friday sales. Yet those numbers capture only part of the problem since according to the Justice Department, only about 15 percent of victims report their losses.

Because of that underreporting, the FTC reckons actual losses last year were at least $20 billion. And they could be as high as $137 billion, depending on the assumptions you make about how low the rate of reporting is, the agency explained.

But the United States is lagging other Western countries in measures to stem the epidemic, with fewer steps taken to counter fraud and not as many resources to back them up, less coordination between government agencies, and with upcoming regulatory changes that could even make life easier for fraudsters, according to consumer advocates, local prosecutors and technology experts.