American consumers hit hard by fraud while Trump and Congress undo consumer protections and dismantle federal regulators

It’s alarming to watch, and it goes on and on every day.

Americans are increasingly at risk of losing their money to fraud and scams, according to Consumer Federation of America, or CFA, a consumer advocacy group. The CFA is concerned that the Trump administration’s moves to cripple federal fraud regulators means it’s now open season on consumers.

“Rather than empowering regulators to crack down on fraudsters, the Trump administration and Congressional Republicans are making it virtually impossible for our federal ‘fraud police’ to help scammed and cheated Americans,” Erin Witte, director of consumer protection at the CFA, said in a statement. “Americans of all ages are losing billions of dollars to fraud while Trump is pardoning the corporate lawbreakers who steal it.”

Big tech and digital payment apps have been increasingly exploited by fraudsters as a way to steal consumers’ money, an analysis of Federal Trade Commission and Consumer Financial Protection Bureau data shows.

Despite more people losing larger amounts of money to fraud, the Trump administration has fired Rohit Chopra, the bureau’s director, ordered all bureau staff to stop all work, pardoned billions of dollars of corporate misconduct, and fired two FTC commissioners.

Fraud carried out by digital payment apps has increased by more than 200 percent since 2021, with losses to consumers totaling at least $390 million in 2024, and likely much more, according to the CFA’s analysis.

In 2022, consumers who filed complaints with the CFPB about money services, such as digital wallets, reported that “the issue that best described the problem they experienced” as “fraud or scam.” The trend continued into 2023 when the bureau found that consumers “raised issues related to fraudulent activity in nearly every product category.”

Prior to the Trump administration, the bureau brought enforcement actions and developed regulations to address the stampede of big tech into finance. But, Witte said, in a move to abandon victims of fraud, Trump’s appointee, Russ Vought, acting director of the bureau, pardoned Zelle’s repeat offender bank backers for opening the doors to fraudsters to steal more than $870 million from their customers.

The bureau found that “hundreds of thousands of consumers filed fraud complaints and were largely denied assistance, with some being told to contact the fraudsters directly to recover their money,” according to the CFA analysis. The bureau’s ousted director, Rohit Chopra, had previously highlighted the growing use of digital payment apps as a vehicle for scammers to steal consumers’ money.

“When seniors are getting actively scammed, we don’t have time for giant corporations to try to pass the blame to each other,” Erie Meyer, the former chief technology officer at the bureau said. “Congress gave CFPB rulemaking authority to address this exact abuse, and we used it to put the consumer first. If big tech wants to be in the payment space, they should have to follow the same rules as brick-and-mortar businesses.”

In November, the bureau published a rule that would subject ‘general-use digital consumer payment applications’ to supervision by the bureau, allowing the agency to monitor for risk of harm to consumers. However, a Republican-led Congress is quickly moving to kill this rule.

“Americans are already being financially squeezed by inflation, and now the only watchdogs trying to fight the proliferation of fraud in America are being dismantled or muzzled,” said Witte.

“It feels like American consumers are at risk of fraud around every corner: whether due to identity theft, scams, or account takeovers,” she said of the nationwide fraud epidemic. “The only reason you’d want to gut the CFPB or hamstring the FTC at a time like this is if you simply don’t care about people losing their hard-earned money.”

With scams on the increase and regulators being systematically dismantled, consumers need to be ever more vigilante daily.

Comments

[Carol Cassara]

I think we need journalists like you more now than ever.

[Rita Robison]

Yes, journalists are playing a vital role during these tumultuous times.

[Laurie Stone]

The second Trump administration (all three months of it so far) has been breathtaking in its cruelty, stupidity, and depravity. I'm not surprised this is one more example of their corruption.

[Rita]

Yes, that's the right word: corruption. And, you're correct, this is just one portion of the federal government that's being gutted by the Trump administration. Health services, environmental protection, agriculture, education, small businesses, public lands, energy, and more are being hit hard by Trump's cuts. These are trying times for the American people.

[azire]

Ultraewealthy & large corporations are mostly getting what they paid for, althoiugh some aren't thrilled w/all the tariffs (like E.Musk) & how Trump is using them to play chicken w/so many other nations. Seems few in the US are willing to stand up to him.

Never understood why the mainstream media ever labeled him a populist, or their definiion of one was an extremist & demagogue, not someone who wanted to act/legislate for the benefit of the people.

[Rita]

It's just so hard to understand this emphasis Trump has on tariffs. It's so disruptive, will increase costs for consumers, and will throw the U.S. and probably the world into a recession.

I agree: Trump is an extremist and a demagogue, not a populist.