Scam victims are taxed, blamed by banks and left with little recourse, AP/FRONTLINE finds
Scams in the United States have surged to a record high, and almost no one is being spared. Americans reported $15.9 billion in losses to the Federal Trade Commission last year — a 25% jump over 2024 and, by the FTC’s own accounting, a significant undercount. The agency has estimated that real losses in 2024 approached $200 billion, the equivalent of about $550 million every day.
Most Americans have experienced the attempt. In an AP-NORC poll, 98% of Americans said they suspected they had been targeted with scam messages, many on a daily basis, and three in 10 said they had personally lost money or information to fraud.
Yet the odds of getting made whole are vanishingly thin. An investigation by The Associated Press and FRONTLINE — based on interviews with 58 victims, from IT professionals and academics to people just trying to make ends meet — found that current responses by the Trump administration and Congress have done little to give victims meaningful remedies. Those victims, ages 32 to 90, lost amounts ranging from a few thousand dollars to $4 million each. Several said they considered suicide; two said they attempted it. Only one got money back, and she received it from her bank.
The problems do not end when the scam does. For many victims, the next bill comes from the IRS. When people are persuaded to withdraw money from tax-deferred accounts, such as retirement savings, and send it to scammers, the IRS generally treats that money as taxable income. Before 2018, taxpayers could sometimes deduct such stolen amounts as theft losses. The 2017 Tax Cuts and Jobs Act, made permanent in 2025, ended that option for most common scams. Victims can therefore owe taxes on money they no longer have.
Banks, meanwhile, often treat victims as the problem. Several people interviewed said their accounts were suddenly frozen or closed, sometimes while banks demanded repayment of loans and legal fees. Earlier this year, Kenneth Kelly, chair of the American Bankers Association, said banks spend “time, money and significant resources” trying to stop fraud. But when a customer has authorized a transfer, however deceptively, U.S. law rarely shifts liability to the bank.
The United States is an outlier internationally. In Britain, financial firms have generally had to reimburse customers tricked into sending money to scammers since late 2024, and trained social workers sometimes visit victims. The European Union is introducing rules that can make financial institutions liable for scammed funds if they fail to install adequate anti-fraud measures; its Digital Services Act forces platforms to act quickly on complaints about scam content. Australia can fine or force institutions to compensate victims. Singapore requires banks and telecoms to repay victims of certain phishing scams when safeguards lapse, and police there can temporarily block a potential victim’s bank transfers and work alongside bank and e-commerce staff in a national anti-scam center.
Cryptocurrency has made the problem worse. Scammers lean on crypto because it can be moved almost instantly and is difficult to trace. China has banned crypto businesses; the EU requires licenses, disclosures and consumer protections. The United States has moved more cautiously. The Trump administration has endorsed some regulation while vowing to end “aggressive enforcement actions and regulatory overreach.” The GENIUS Act, signed by President Trump last year, did not require exchanges to return stolen funds — a gap criticized by prosecutors, consumer advocates and some lawmakers. Crypto assets are not federally insured, and many exchanges operate offshore, outside U.S. jurisdiction.
There are signs Washington is starting to treat the problem seriously. Congress has introduced more than a dozen anti-scam bills, including a proposal for a centralized federal website for complaints and another requiring disclosures for deepfakes and AI-generated content. In November, the Justice Department launched a strike force aimed at Southeast Asian scam centers, and the Treasury imposed sanctions. In March, Trump signed an executive order asking the attorney general to prioritize scam prosecutions and recommend a program to restore money to victims.
Still, the safety net is leaky. The Government Accountability Office found that at least 13 federal agencies touch different pieces of these crimes. The FBI’s Operation Level Up has stopped about 8,500 people from falling for scams over nearly two years by calling them to intervene, according to Rebecca Keithley, former chief of the FBI’s Financial Crimes Section. But the FBI receives an average of almost 3,000 internet crime complaints a day through its IC3.gov portal — making 8,500 a drop in the bucket.
This story is part of an ongoing collaboration between The Associated Press and FRONTLINE (PBS), including the documentary “Scammed,” premiering Tuesday, Sept. 29 on PBS and online.
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