Chase launches new anti-scam program

• Key insight: JPMorganChase is launching its largest-ever anti-scam initiative, adding "trusted contacts" and dedicated intervention teams to fight record-high fraud.
• What's at stake: Consumer advocates say the plan lacks a critical component: better reimbursement for scammed consumers, who rarely recover money from "authorized" payments.
• Supporting data: Americans lost an estimated $158.3 billion to fraud in 2023, according to a Federal Trade Commission report cited by consumer watchdogs.

Overview bullets generated by AI with editorial review

JPMorganChase announced on Monday the launch of what it called the largest fraud and scam prevention initiative in the firm's history, including continuing investments in operational enhancements, technology and staff specially trained to combat increasingly sophisticated financial crimes.

In the announcement, the bank also called out tech companies, social media companies and law enforcement as needing to form "a unified front" with banks to stop scams and fraud.

Among the key developments, the bank said customers will be able to designate a trusted contact person who may be notified of certain transactions on the customer's account to help guard against fraud or financial abuse.

A growing number of states have passed laws designed to enable customers — particularly those who are elderly — to designate a so-called trusted contact. The bank can then contact this person if it believes the customer is being targeted by a scam or fraud.

Scam warnings and alerts from a bank can stop some potential victims of scams from following through on a transaction. However, potential victims can also ignore these alerts.

Proponents of the trusted contacts approach argue that a friend or family member is better positioned to effectively intervene against a scam.

As part of the initiative, Chase also said it has deployed a dedicated scam interruption team, developed by behavioral psychologists, investigators and global scam prevention research, to connect with clients and work to stop scams in real time.

The bank also has a specialized team focused on assisting older and vulnerable adults who may be victims of financial abuse. To support these efforts, Chase said it partnered with AARP to provide the nonprofit's BankSafe training to branch employees. The training focuses on preventing financial exploitation, empowering family caregivers, helping those with dementia, and making banking tools and environments easier to access.

Finally, Chase said it uses technology to detect suspicious activity and deploy an in-app warning or stop a payment, particularly for transactions linked to social media or other high-risk sources.

Banking leaders say tech platforms, law enforcement must join the fight

Paul Benda, executive vice president of risk, fraud and cybersecurity for the American Bankers Association, applauded the news and underscored the necessity of collaborating across sectors and with law enforcement.

"The banking industry is leading the way in the fight against fraud thanks to the efforts of banks of all sizes across the country including JPMorganChase, but we cannot win this fight alone," Benda said.

In the Monday announcement, Chase Bank CEO Jennifer Roberts issued a challenge, saying "banks, technology companies, social media platforms and law enforcement all have a role to play" in protecting consumers from fraud and scams. Doing so, she said, would require "a united front."

"At JPMorganChase, we're leading by example by continuously investing in new solutions, but we call on the entire industry to join us in making it harder for criminals to exploit our communities," Roberts said.

Consumer groups highlight reimbursement gaps

While supporting detection and education efforts, consumer advocates emphasized that prevention alone is insufficient as long as authorized payment scam victims shoulder the burden of losses.

According to an annual report from JPMorganChase, the bank lost $500 million to fraud in 2024, including $300 million against the bank directly and $200 in reimbursements to defrauded customers.

The bank also said in the annual report that it processes "thousands of scam claims where customers authorized transactions but should not have done so (for example, buying nonexistent products or sending money to fake websites), often because they were misled by bad actors." It did not disclose the total dollar amount associated with these claims.

In its Monday announcement about the anti-scam initiative, Chase said it safeguarded customers from losing $12 billion in fraud and scam attempts last year.

Lauren Saunders, associate director and director of federal advocacy at the National Consumer Law Center, pointed out the critical need for financial recourse when consumers fall for scams.

"We support the efforts by JPMorganChase and other industry players to detect and prevent fraud and to educate their customers, but reimbursement of defrauded consumers is also critical, both to address the devastating impact of fraud on families and to incentivize payment systems to take responsibility for keeping fraudsters out," Saunders said.

This concern about reimbursement centers on the industry's distinction between fraud (unauthorized transactions, typically reimbursed) and scams (authorized transactions induced by deception, typically not reimbursed).

John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League, addressed this key policy distinction directly.

"Until Chase and other major institutions treat reimbursement for scams the same way they treat reimbursement for fraud, consumers will continue to bear the brunt of these losses," Breyault said.

He noted that fraud is a historically underreported crime for a variety of reasons, including the stigma of shame associated with falling victim to a scam. Accounting for underreporting, Americans lost between $24 billion and $158 billion to fraud in 2023, according to an estimate published in a Federal Trade Commission report last year.

Announcement follows federal initiative against scams, fraud

JPMorganChase's new commitment to fraud defense aligns with a major new federal law enforcement initiative. The Justice Department's Scam Center Strike Force, announced last week, is set to crack down on cryptocurrency-related fraud, specifically targeting Southeast Asian scam centers.

The new initiative, which combines the resources of the U.S. attorney's office, DOJ's criminal division, the FBI and the U.S. Secret Service, is focused on disrupting transnational criminal organizations. Law enforcement aims to identify leaders, seize stolen cryptocurrency and disable U.S.-based infrastructure used by scammers.

The initiative is already producing results, according to the announcement last week by the Department of Justice; the Strike Force Crypto Seizure team has seized and forfeited over $400 million in cryptocurrency from these schemes, the office said.

U.S. Attorney Jeanine Ferris Pirro, in announcing the creation of the strike force, called on U.S. corporations to participate.

"Working together in public-private partnership, we must secure the U.S. infrastructure, which is being used as an instrument to defraud Americans in these scams," Pirro said.

As institutions look to emulate JPMorganChase's measures, they face the wider ecosystem challenge: sophisticated social engineering scams rely on communication platforms like social media to gain trust.

Jamie Dimon noted in his letter to shareholders as part of the 2024 annual report from his company: "Fraud and scams are a societal problem, and we need law enforcement, retailers, social media, telecom companies and others to work together to stop these crimes at the source."