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Online Fraud: The War Nobody’s Fighting chris October 23, 2025

Online Fraud: The War Nobody’s Fighting

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We're Losing a War We Haven't Bothered to Fight

The United States is in the middle of a global conflict, and so far, it’s not winning. This isn’t a war fought with soldiers and tanks. It’s being waged by transnational criminal organizations from overseas safe havens, and their weapon of choice is the digital scam. The numbers are bleak. American households are losing over a billion dollars every week, with total fraud losses soaring past $158 billion a year.

This isn’t just about financial loss. It’s a direct threat to national security. The profits from these scams are funding other serious crimes, including drug and human trafficking. Every successful scam erodes public trust in our core systems of commerce and communication, creating a society paralyzed by the fear of being cheated. As a recent Aspen Institute report makes painfully clear, the U.S. lacks a coordinated national plan to fight back, leaving our defenses fragmented, underfunded, and years behind the enemy.

The AI Arms Race is Here

The game has changed. Criminals are supercharging their attacks with artificial intelligence and cryptocurrency, enabling what the report calls “ever-faster and more powerful forms of criminal deceit.” AI-powered deepfakes are no longer a theoretical threat. They’re a key tool fueling the boom in impersonation scams. This technological acceleration means that our old methods of defense are completely outmatched. Trying to fight an AI-driven attack with a manual, human-led process is like bringing a knife to a gunfight.

The only way to win this arms race is to fight fire with fire. The national strategy must foster offensive technological innovation. We need advanced analytics and AI-driven defense systems that can operate at machine speed. The goal is to detect and neutralize threats at their source, often before they can even launch an attack.

Fraud already imposes steep costs on financial institutions and other organizations. Banks can lose up to 7.5% of their annual revenue to direct and indirect fraud costs. For credit unions, that number rises as high as 11%.

Don’t underestimate the financial burden of online fraud schemes. Their costs will only rise as AI continues to develop and proliferate.

It's Time to Break Their Business Model

For too long, our approach has been purely reactive. We wait for a scam to cause harm, then we try to clean up the mess. It’s a losing strategy. The Aspen report rightly calls for a fundamental shift to proactive disruption. We need to attack the scammers’ business model and make their operations unprofitable and risky.

This means actively dismantling their infrastructure. It means taking down their fraudulent websites and communication channels before they can reach their victims. The report points to Australia’s scam prevention framework, which requires companies to actively disrupt scams based on “actionable scam intelligence.” This is the future. Success isn’t measured by how many sites you take down after the fact. It’s measured by the attacks that never happen in the first place because you broke the criminal enterprise behind them.

This isn’t just about financial loss. It’s a direct threat to national security. The profits from these scams are funding other serious crimes, including drug and human trafficking. Every successful scam erodes public trust in our core systems of commerce and communication, creating a society paralyzed by the fear of being cheated. As a recent Aspen Institute report makes painfully clear, the U.S. lacks a coordinated national plan to fight back, leaving our defenses fragmented, underfunded, and years behind the enemy.

An abstract visualization of a digital network, showing glowing orange and yellow nodes connected by green lines, with two major hubs highlighted, all on a dark blue background with faint contour lines.

A Call for Coordinated Defense

Right now, our response is a mess of information silos. Victims and companies are confused about where to report crimes. Government agencies are using outdated databases that can’t handle modern, automated data reporting. Can you believe major federal systems still rely on people manually uploading PDFs? It’s absurd. Scammers thrive in this chaos.

The call to modernize key databases like the FBI’s IC3 and the FTC’s Sentinel with APIs for bulk reporting is a critical, long-overdue step. A single, unified portal, like the proposed stopscams.gov, would streamline the flow of threat intelligence from the private sector to law enforcement. It’s about getting the right information to the right people, right now.

This fight requires a whole-of-ecosystem response. Regulators are even considering “good Samaritan” liability protections for companies that act in good faith to block scams. This is a smart move. It would incentivize companies to get off the sidelines and join the fight without the fear of getting tangled in legal trouble for trying to do the right thing.

The message is simple. We can’t afford to treat this as a “side project” any longer. It’s time to establish a real, coordinated national strategy that empowers public and private sectors to go on the offensive.

This means actively dismantling their infrastructure. It means taking down their fraudulent websites and communication channels before they can reach their victims. The report points to Australia’s scam prevention framework, which requires companies to actively disrupt scams based on “actionable scam intelligence.” This is the future. Success isn’t measured by how many sites you take down after the fact. It’s measured by the attacks that never happen in the first place because you broke the criminal enterprise behind them.

This isn’t just about financial loss. It’s a direct threat to national security. The profits from these scams are funding other serious crimes, including drug and human trafficking. Every successful scam erodes public trust in our core systems of commerce and communication, creating a society paralyzed by the fear of being cheated. As a recent Aspen Institute report makes painfully clear, the U.S. lacks a coordinated national plan to fight back, leaving our defenses fragmented, underfunded, and years behind the enemy.

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