Financial scams are on the rise — but what’s being done about it?

The Hill

BY BENJAMIN P. EDWARDS, OPINION CONTRIBUTOR   – 02/18/26 12:00 PM ET

For years, transnational criminal networks have targeted Americans with inventive scam operations. According to the Federal Trade Commission, these criminals now wreck more lives than ever before.

In 2023, scams cost Americans at least $10 billion overall. That number has grown dramatically; a report from the FTC in December found that losses specifically for older Americans “have skyrocketed from about $600 million in 2020 to $2.4 billion in 2024.” The increase, it says, has been “largely driven by reports of losses over $100,000.”

Successful scams feed criminal networks because looted retirement savings fuel money laundering, human trafficking and more scams. The United Nations has found that unchecked scam operations now metastasize and destabilize entire regions.

Consider what happened to Marjorie Kessler. An older investor, scammers duped her into believing that she needed to convert her funds to gold, cash and cryptocurrency so that the U.S. Treasury could keep it “safe” while it sorted out who had stolen her identity. She withdrew more than $2 million within about nine days while giving odd statements to her financial adviser at the scammers’ behest. Although Kessler recovered some funds in arbitration, she lost the bulk of her wealth.

To deal with these problems, the United Nations calls for us to respond as a society instead of leaving individuals to protect themselves. It counsels that “prevention and enforcement depend on well-designed legal and regulatory systems that can respond to evolving threats.” Yet our institutions have failed to meaningfully check the scam epidemic. Notably, the Financial Industry Regulatory Authority, known as FINRA, plays a keystone role because it oversees the brokerages holding most individuals’ wealth. American retirement and securities savings held by FINRA’s member firms offer the most significant targets.

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But while FINRA plays the most critical role, it has always been an unusual beast, straddling a constitutionally murky line between business and government as a jumped-up trade association. It operates as a federal deputy of sorts, with an obligation to enforce federal law, yet also acts outside the constitutional restraints governing federal administrative agencies. In theory, this freedom allows it to function as a more effective and responsive regulator. 

At times, this structure has drawn attacks. Some groups, uncomfortable with any quasi-governmental entity that our founders failed to provide for in 1787, have sued to have FINRA declared unconstitutional. I rose to defend FINRA’s existence with an amicus brief and stood alongside the Public Investor Advocate Bar Association, the Securities Exchanges, and the National Futures Exchange arguing that FINRA should continue to play its vital role.

Despite the growing threat environment, FINRA now downsizes and cuts staff in pursuit of efficiency instead of scaling up operations to stop scams. Why FINRA has been staffing down when it should be standing up presents a puzzle, because it does not have any obligation to cut staff.

Regrettably, I fear FINRA lacks the will to fight these frauds today.

Understanding the organization’s priorities requires watching what it does, not what it says. Earlier this year, it returned $50 million in dues to its members. Apparently, it thought a windfall for brokerages was a better use for the funds than spending it to protect investors who are being fleeced at record-setting rates. But why would FINRA — an investor protection group — cut staff and refund cash?

Simple cowardice offers the best explanation. With headcount reductions at federal agencies and a lone congresswoman introducing legislation to end FINRA’s existence by folding it into the Securities and Exchange Commission, as contemplated by Project 2025, FINRA appears to flee the field to avoid the administration’s notice. Regrettably, as FINRA shrinks itself, it also shrinks from its duty to protect Americans from industrial-scale scam operations.

To be sure, FINRA has some rules and resources in place that aim to protect investors from scams and fraud. Yet it does not appear to have ever brought any enforcement actions to hold brokerage firms accountable for failing to collect trusted contact information, so that brokerages can phone a friend in when a customer appears to be getting scammed. Its weak response leaves Americans without meaningful protection.

Ultimately, America faces new and growing threats with scammers able to defraud investors and retirees from across the globe. Meeting this threat requires sustained institutional responses, aggressive enforcement of existing rules, and changes in how brokerages interact with clients. FINRA and other financial regulators must get into this fight in a much more meaningful way, or many more Americans will soon find themselves in Marjorie Kessler’s position.

Benjamin P. Edwards is the associate dean for Faculty Development and Research at the William S. Boyd School of Law, University of Nevada Las Vegas and vice president of the Public Investors Advocate Bar Association. The opinions expressed are his alone and not expressed on behalf of the University of Nevada, Las Vegas.