Scams are growing in both prevalence and severity, with more than $10 billion (Off-site) in consumer fraud losses reported to the Federal Trade Commission in 2023, up 14% from 2022.
To help address the issue, the Federal Reserve and a work group of payments and fraud experts have introduced the ScamClassifier model (Off-site), a voluntary classification structure that supports consistent and detailed classification, reporting, analysis and identification of scams, attempted scams, and related trends.
Better classification and reporting of scams within organizations and the broader payments industry can help prevent and mitigate this type of fraud. The benefits of using the ScamClassifier model can include more detailed reporting of scam categories and scam types and improved focus on detection and mitigation efforts.
Vice President of Payments Improvement
Federal Reserve Financial Services
Similar to the FraudClassifierSM model (Off-site) announced by the Federal Reserve in 2020, the ScamClassifier model uses a series of questions to differentiate and classify scams and attempted scams by category and type. The ScamClassifier model's questions begin by asking if the case is a scam or attempted scam, or if it is another type of fraud. This categorization is based on the definition of a scam: the use of deception or manipulation intended to achieve financial gain.
Subsequent questions in the model determine the method of deception and the specific type of scam, such as business impostor or romance impostor. The ScamClassifier model can be used as a standalone classification structure or be applied either before or after the FraudClassifier model is used to classify an incident as fraud.
Visit FedPaymentsImprovement.org (Off-site) to explore the ScamClassifier model. Visit USA.gov (Off-site) for fraud reporting information and links to organizations that track scams and fraud.
Note: The ScamClassifier model is not intended to result in mandates or regulations, and does not give any legal status, rights or responsibilities, nor is it intended to define or imply liabilities for loss or create legal definitions, regulatory or reporting requirements. While sharing and use of the ScamClassifier model throughout the industry is encouraged, any adoption of the ScamClassifier model is voluntary at the discretion of each individual entity. Absent written consent, the ScamClassifier model may not be used in a manner that suggests the Federal Reserve endorses a third-party product or service.
“ScamClassifier” and “FraudClassifier” are service marks of the Federal Reserve Banks. A list of marks related to financial services products that are offered to financial institutions by the Federal Reserve Banks is available at FRBservices.org®.
