Ellen Berge published "Red Flags for Banks and Processors Servicing the New High-Risk Environment" in the February 2023 issue of The Review of Banking & Financial Services. The following is an excerpt:
In February 2022, the Federal Trade Commission ("FTC") reported that consumers lost more than $5.8 billion to fraud in 2021, an increase of more than 70% over the previous year. Imposter scams, online shopping scams, prize promotions, sweepstakes, lotteries, Internet services, and business and job opportunities, topped the list. In a separate study issued in June 2022, the FTC reported that since the start of 2021, U.S. consumers reported losing over $1 billion to crypto scams. Most of the crypto scams originated with social media and primarily involved bogus investment opportunities, with romance scams falling in second place. While the FTC would caution consumers never to mix dating and investment advice, it is not so simple for banks and payment processors that service high-risk merchant categories.