Reform the CFPB by making it America’s scam response hub

Americans are facing severe financial harm from financial scams. According to the Federal Trade Commission (FTC), scam losses totaled nearly $200 billion in 2024 alone when accounting for underreporting; meanwhile, the agency’s self-reported data shows losses closer to $12 billion. While this fragmented reporting fails to clearly show how severe the issue truly is, one thing is clear: Financial scams are a massive, growing problem in the United States.

Nevertheless, the federal government has failed to mount a comprehensive response. It is important to note that scams are not the same as fraud, from which customers already receive fairly robust protections. To understand the difference, think of fraud as someone breaking into your home and a scam as someone tricking you into unlocking the door.

The scam issue is uniquely complex, spanning a multitude of industries and crossing international waters. In fact, most of today’s financial scams originate overseas. Multiple bills in Congress and the Department of Justice’s new Scam Center Strike Force are helping the issue gain traction; however, considering the severity of losses and advancements in artificial intelligence that are already exacerbating the issue, time is a big factor. Current legislative proposals also lack consumer-facing assistance for Americans, who need a one-stop shop for scam education and reporting.

Fortunately, there is no need to build anything new—the Consumer Financial Protection Bureau (CFPB) is well suited to meet the demand. The agency could easily transition to managing scam report intake, external awareness, education, and coordination while leaving financial institution enforcement actions and supervision to prudential regulators.

The CFPB currently operates as a far leaner version of itself following significant restructuring during the second Trump administration. Acting Director Russell Vought has reduced staff by about 90 percent while halting rulemaking and enforcement actions. Meanwhile, Congress statutorily reduced funding caps by 50 percent as part of the One Big Beautiful Bill Act, and the Justice Department declared the agency’s funding mechanism unconstitutional. With its regulatory ambitions scaled back, the CFPB is closer to a blank slate than at any other point in its history. Rather than attempting to rebuild the agency’s previous footprint, policymakers should take advantage of this moment to redefine its mission around a single, defensible, and urgently needed function: to serve as the nation’s centralized consumer scam response hub.

Fragmentation and Confusion

Financial scam victims (and would-be victims) face a confusing, inefficient, and ineffective government landscape. Depending on the situation, they may report to one of the following entities:

• The FTC
• The Federal Bureau of Investigation (FBI) or another law enforcement agency
• Their financial institution
• A social media company, dating site, telecom provider, other (i.e., wherever the scam originated)
• Better Business Bureau

Each has its own intake system (if it has one at all) and handles scam complaints much differently. Law enforcement agencies are the only ones capable of enforcement or restitution, but even this varies widely. The high-tech and international nature of scams complicates things further, resulting in variable reporting and outcomes across jurisdictions.

This leaves consumers unsure of where to turn, hopeless for a positive outcome, and disincentivized to report at all.

A Logical Choice

Protecting consumers is the CFPB’s chief intent, and its Consumer Complaint Database has the necessary infrastructure to serve as a reporting and tracking hub. The agency processes hundreds of thousands of complaints annually and interfaces directly with financial institutions. It is already capable of categorizing complaints and sharing them outside the federal government—two vital actions in the fight against financial scams.

Growing government is a legitimate concern as various pieces of legislation attempting to address the scam issue continue to circulate. However, narrowing the CFPB’s scope and redirecting its mission would kill two birds with one stone: reining in a troublesome agency and using existing infrastructure and funding to address scams immediately.

Instead of duplicating intake functions across multiple agencies, Congress could designate the CFPB as the single reporting and tracking hub for financial scams. Complaints could still be routed internally to the appropriate authorities or used to aid the private sector in innovation and education to stop scams before they reach consumers, but establishing one clear avenue for reporting and resources would ease the burden on victims.

While other federal financial regulatory agencies (e.g., the Federal Reserve) focus on safety and soundness, the CFPB has always been a consumer-facing institution. It already conducts education campaigns, maintains public resources, and directly interfaces with Americans navigating financial issues. Though the author considers most government-led education campaigns to be ill-fated, the ease in which this could be done makes it worthwhile.

Further, a long-standing complaint regarding the CFPB is that its enforcement authority is duplicative. Shifting the agency’s mission would transfer its current authorities back to the prudential regulators. This would ease the burden on consumers as well as on financial institutions, who may then be able to redirect resources toward their own fight against scams.

The Reformed CFPB in Practice

CFPB reforms should focus on using current infrastructure to create a single, centralized database for scam reporting—ideally with a new, widely publicized URL (e.g., scams.gov) as some have suggested.

Existing scam complaint portals like those at the FTC and FBI could reroute directly to the CFPB scams hub in order to reduce duplication; standardize data collection, management, and tracking processes; and produce more accurate statistics. With proper privacy protections, the CFPB could share this data with other relevant parties including financial institutions, social media companies, and others that are part of the financial scam lifecycle.

Further, the agency could reduce fragmentation in scam intelligence by aggregating outside data into its system, including data from individuals who may still report to the scam’s origin (e.g., social media companies) or others. This could aid in timely threat detection and warnings as well as in pattern and geography identification.

Then there is the issue of restitution. Scam victims are rarely able to get their money back once it has left their account. While restitution almost certainly requires action on the part of law enforcement, a centralized system could make issue resolution clearer and allow consumers to track the status of their losses.

Finally, the CFPB could operate as a consumer hub for awareness and education, proving that the issue is being addressed from multiple angles and that their concerns matter. This could include public-private coordination efforts and active enforcement actions in addition to standard government-led education initiatives.

Addressing Concerns

Though several of the reforms required to transform the CFPB could present political challenges, there may never be a better time for it. The Trump administration has brought the agency to its knees with major staffing and funding cuts as well as recent legislative changes reducing its budget; however, the fight against financial scams is nonpartisan, and arguing against a consumer hub for scams would be politically challenging. Progressives seem to view scams through the lens of consumer harm, while conservatives see criminal exploitation and populists see Americans targeted by increasingly sophisticated overseas networks. If lawmakers across the board are already working together to fight scams, then creating a scam response hub should be no different.

It is important to note that the CFPB would not receive additional power; instead, it would have less. Though the agency has a reputation for excessive enforcement actions (especially under the Biden administration), its authority remains civil, not criminal. This means that enforcement actions against all scammers, whether foreign or domestic, would remain with the appropriate law enforcement agencies. The CFPB would exist only to serve consumer needs in combating financial scams.

Such a plan may raise concern among free-market advocates that it could open up a backdoor to liability mandates against financial institutions—the industry least responsible for scams but most likely to receive backlash when they happen. Therefore, legislation to transform the CFPB should ensure the agency’s role remains focused on consumer support rather than punitive action.

Conclusion

The CFPB’s new mission and scope would give it a concrete and defensible purpose: to reduce the frequency and severity of scams and to help victims deal with them. Scammers are capable of moving far faster than regulatory and legislative bodies, so what we need now is swift, decisive action with a coherent structure that is easy to find and navigate.