On March 5, 2025, the California Senate Committee on Banking and Financial Institutions held a hearing on “The Golden Age of Scams: How Technology and Transnational Fraud Rings Threaten California Consumers.” There were ten speakers ranging from a scam victim, a non-profit advocate for scam victims, a Secret Service member, representatives from banks, telcos and digital platforms, a California District Attorney and two speakers describing actions that can be taken to help prevent scams (for disclosure, I was one of the later speakers).
In this blog, I will provide an overview of what the speakers presented and what actions we can expect from the California Senate as a result of this hearing.
First panel: Scam victim, law enforcement and a victim advocate
The first presenter was a scam victim from Southern California. She described how the scam began on one morning in 2024 when “my home computer started flashing and making a loud noise.” It was a start of the “Microsoft help desk” scam. She called a number on the screen and the scam began. As she got ‘help,” she was told she was “accessing child porn” and there was “an overseas charge on my bank account for $35,000.” A representative from the “Federal Reserve” then told her she needed to reverse the charge by withdrawing cash to be placed in a federal locker. This story continued as the victim went to several of her bank branches to withdraw cash (with little bank intervention) and ultimately led to her converting assets into gold bullion—all of this being picked up by an “agent” to place in the federal locker. Long story short, this victim lost hundreds of thousands of dollars. It was valuable to hear this story, knowing the emotional pain the victim must have relived during the telling.
Next, a Secret Service Special agent testified who described the transactional organized crime groups behind these scams. He showed a picture of a massive scam compound in Asia(shown below). Erin West, former Deputy District Attorney turned scam victim advocate, has been documenting the construction of these scam compounds in plain sight on LinkedIn to raise attention to the problem.
An example of one of the many scam compounds being built in plain sight across Southeast Asia.
Carla Sanchez-Adams from the National Consumer Law Center testified next. She described the many ways consumers are losing money from bank transactions, ranging from authorized scam transactions to unreimbursed unauthorized wire transfers and check fraud losses.
Second panel: The industry speaks
The second panel included representatives from telcos, digital platforms and banking. Josh Burcu from US Telecom |The Broadband Association talked about the traceback effort to stop scam calls. Mr. Burcu noted that telcos have blocked billions of calls, but the scammers can quickly pivot to new attack vectors, such as using SIM boxes. When asked if there is a way to notify people if a call or text comes from overseas, Mr. Burcu said: “Unfortunately your provider does not know that the call or text originates from overseas.” He said there can be many steps in the process that makes it impossible to tell where the call or text originates and that the rise of scammers using SIM boxes in the US also masks foreign calls.
I decided to see what other countries were doing about blocking international scam calls. I saw stories from the UK and India in 2025 talking about blocking spoofed international calls. In the article on India, it stated the country has “an indigenously-developed system to identify and block international spoofed calls that display Indian mobile numbers. The tool proved to be a formidable barrier that blocked 90% of all the incoming international calls which were identified as spoofed calls.” Finland has also reduced the number of spoofed calls from abroad in 2023. The Finnish regulator, Traficom, and Elisa Corporation gave a presentation at the RSA Conference on their solution. Sweden has also reduced inbound international calls that spoof Swedish phone numbers.
If telcos could indicate to customers that an incoming call or text came is from overseas – or block international spoofed calls and scam text messages altogether – it would make a big difference in the fight against scams.
Next, Dylan Hoffman, from TechNet, said digital platforms have every intent to thwart scams. They look to flag suspicious accounts, such as when one IP address is associated with thousands of accounts. Mr. Hoffman said he hoped there could be a national strategy around information sharing. He closed by saying, “Our platforms have a responsibility and want to be part of the solution.”
Finally, Darius Kingsley, Managing Director, Head of Consumer Banking Practices at JPM Chase, said scams “threaten the trust and safety of our economy and quite frankly the US financial system.” He also said banks have “a regulatory and moral obligation to do our part in keeping our financial system, and those who count on it, safe from financial fraud and scams.” Mr. Kingsley testified about some of the efforts Chase has instituted to address the scams problem such as requiring branch bankers to take AARP training so they can better interact with victims and the use of risk models to detect suspicious scam transactions. He also talked about the Aspen Institute effort to come up with national recommendations to help prevent scams. He said banks, telcos, digital platforms and government need to collaborate to solve the scam problem.
Third panel: Positive steps toward change
The third panel featured speakers describing positive steps that are taking place or can take place to help scam victims and reduce these scams. First, a representative from the San Diego District Attorney’s office, Deputy District Attorney Scott Pirrello, explained how they set up a special San Diego Elder Justice Task Force. He described the new National Elder Fraud Coordination Center (NEFCC), being funded by Walmart, Google and Amazon, that will be supported by AARP and housed with the National Cyber Forensics Training Alliance (NCFTA) in Pittsburgh. Mr. Pirrello explained how less than 1% of these scam cases are ever worked by law enforcement.
Ken Westbrook, CEO of Stop Scams Alliance, talked about a 15-fold increase in scam losses reported to the FBI since 2014, with the FTC estimating $158 billion in scams losses in 2023.
Mr. Westbrook pointed out how Australia has “taken down over 10,000 (malicious websites) in the last year and a half; the British GCHQ, which is the equivalent of our NSA, has shut down hundreds of thousands of malicious websites since 2020.”
He had several suggestions for the California Senate:
1. Develop a comprehensive strategy to stop scams at the source and appoint someone to lead it
2. Increase sharing of data on scams within California, with other states, and with the federal government
3. Work with tech and telecom companies and federal regulatory bodies to block fraudulent investment websites, fraudulent financial ads, malicious ads, spoofed phone calls, and text messages
4. Boost law enforcement resources
I was the final speaker and focused on the need for banks to have a scam strategy and what should be included in it. The chart below outlines the key elements of an effective scam prevention strategy.
In my testimony, I outlined the efforts undertaken in the UK and Australia to add serious scam controls – in the UK for banks and in Australia for banks, telcos and digital platforms. Both countries have other controls as well, and scam rates are dropping. In the US, however, scam losses continue to grow.
Building an action plan to prevent scams
So, how should the California Senate respond to this testimony? And what do we make of the California Bankers Association (CBA) and California Credit Union League (CCUL) press release issued during the hearings on March 5? First, on the press release, the CBA and the CCUL said, “Banks and credit unions will always play a fundamental role in protecting our customers and combating scams,” and “To address this challenging problem, we need a holistic solution; one that includes not only financial institutions but social media platforms, telecommunication companies and government.” But they failed to say California banks and credit unions will voluntarily add a scam strategy and scam controls. A missed opportunity.
Committee Chairperson, Senator Tim Grayson, at the beginning of the hearing said the Committee should focus on scam prevention. After hearing the testimony, the Committee can now think of the next steps for scam prevention. One Senator said she plans to reintroduce a bill that would allow banks and credit unions to hold suspicious transactions in California. This would likely be similar to laws already in effect in a number of other states.
I think the Committee will look to the Federal government to see if there will be any activity around scam controls—maybe the Federal government heading a scam prevention effort or new scam control regulation for banks from the Consumer Financial Protection Bureau (CFPB) or bank regulators.
On the same day as the California Senate hearing, the US Senate voted to repeal CFPB’s digital payment apps oversight rule, an important protection for consumers. This may be an indication of the current Administration’s limited interest in protecting consumers from scams. And with the current Administration’s effort around reducing regulation overall, California may not want to wait for the Federal government to act on national consumer scam controls.
So far, the bank and credit union trade associations have been silent on recommending banks and credit unions formally add scam strategies and controls, although one trade association did provide its members with recommended approaches to addressing consumer financial scams.
For the 42 million residents in California, the California Senate will have to decide if it needs to step up and protect its residents. It could decide to require scam controls for banks. It could also require more controls for telcos and digital platforms. New York State added a law in 2024 that requires dating sites to notify members who have interacted with any member who has been dropped for scamming.
As a Californian and a former bank fraud practitioner, I want more bank scam controls. If the Federal government will not do it, then maybe it is up to the individual states and specifically my state. This is not the best way-- it should be done at the Federal level. But action is required in 2025. As other countries add controls to make it more difficult for scammers to operate, attacks against US citizens are likely to increase as the scam controls in the US are limited to only a minority of financial institutions that understand the problem.
As Mr. Kingsley from Chase stated, scams “threaten the trust and safety of our economy and quite frankly the US financial system.”
