In February 2026, lawmakers introduced H.R. 7548, the Safeguarding Consumers from Advertising Misconduct (SCAM) Act, bipartisan legislation aimed at addressing the growing role of deceptive advertising in consumer scams.
The bill, introduced by Sen. Ruben Gallego (D‑Arizona) and Sen. Bernie Moreno (R‑Ohio), reflects increasing concern that scam activity often begins well before a transaction ever reaches a financial institution.
What is the SCAM Act and What Does it Mean for Financial Institutions?
The proposed SCAM Act targets online media and social media platforms, requiring them to take reasonable steps to prevent fraudulent and deceptive advertisements from appearing on their platforms while strengthening enforcement authority for the Federal Trade Commission and state regulators.
For financial institutions, the legislation represents a potential shift toward upstream fraud prevention, addressing scams closer to their point of origin rather than solely at the payment or account level. Industry groups, including the American Bankers Association, have voiced support for this approach. In a recent ABA Banking Journal Podcast episode, industry leaders emphasized that while banks invest heavily in fraud detection and customer protection, meaningful progress requires accountability across telecom, media and digital advertising platforms.
In a statement on the legislation, ABA President and CEO Rob Nichols called the SCAM Act a critical step forward in the nation’s fight against fraud.
“Millions of Americans lose billions of dollars a year to scams that start on social media platforms,” Nichols said. “Banks of all sizes invest significant resources to detect and stop fraud, and Americans appreciate those efforts, but we need to prevent scams before they ever reach a bank.” Nichols added that, “The SCAM Act simply asks social media companies to put consumers first by taking responsible steps to remove scammers from their platforms.”
Regardless of its ultimate outcome, the SCAM Act reflects a broader policy trajectory toward shared responsibility in combating fraud.
How Schneider Downs Helps Financial Institutions Prepare and Respond
As fraud schemes continue to evolve and as policymakers increasingly emphasize shared accountability, financial institutions must ensure their fraud risk management programs remain adaptive, well‑governed and defensible. We help financial services clients navigate this changing landscape by:
- Assessing and enhancing fraud risk management frameworks, including governance, policies and escalation protocols
- Evaluating preventive and detective controls across customer onboarding, transaction monitoring and third‑party relationships
- Reviewing fraud response and recovery processes, including customer reimbursement, dispute handling and regulatory reporting
- Advising on data governance and information‑sharing practices to strengthen collaboration across business lines and external partners
- Providing internal audit and independent review services to assess the effectiveness of fraud programs and control environments
By taking a proactive and holistic approach, we help financial institutions strengthen their defenses, enhance customer trust and position themselves to respond effectively to both emerging fraud risks and evolving regulatory expectations.
If you have any questions regarding the SCAM Act and its implications, feel free to contact the Schneider Downs team at [email protected].
About Schneider Downs Financial Services
The Schneider Downs Financial Services industry group supports financial institutions as they navigate evolving risk, regulatory and governance challenges. Our professionals work with institutions to strengthen internal audit, risk advisory and related risk management programs that support sound decision‑making, operational effectiveness and regulatory alignment.
Through services spanning internal audit, risk advisory, IT risk advisory, third‑party risk management, fraud risk advisory and enterprise risk and compliance, we help financial institutions design and enhance resilient, risk‑based programs aligned with their strategic objectives and operating environment.
To learn more, visit our Financial Services Industry Group page.
