The Scam Economy Is a Funnel
Online social platforms sit at the top of the funnel, banks sit in the middle, and individuals pay the price for scams. That has to change.
Fraud has become a national security issue in Canada and the United States, with Erin West, founder of Operation Shamrock, calling the alarming rise in victim losses the “scamdemic”.
Last year, the United States had more than $21 billion in reported fraud losses according to the FBI’s Internet Crime Coordination Center (IC3).
The US FTC noted that in 2025, imposter fraud, where scammers impersonated banks, government, or private sector firms, netted more than $3.5 billion in losses from US victims, up 300% since 2020.
In Canada, reported losses hit $700 million, but the real figure is likely between $7 and $14 billion, as only 5-10% of fraud losses are reported. That figure is similar in the US, so the total US fraud losses may be $210 to $420 billion.
Fraud’s impact goes far beyond the monetary losses.
Anxiety, depression, shattered families, and destroyed businesses are just some of the non-monetary damage done by online fraud.
Right now, based on the trends in Canada and the US, we’re losing the fight against fraud.
But where is the fight being lost?
Picture the scam economy as a funnel.
The online platforms that sell scammers their advertising sit at the top.
Banks sit in the middle, and victims are at the bottom. In the U.S., social media drove more fraud loss last year than any other way scammers reach people.
In the UK, two-thirds of authorized push-payment fraud now starts on online platforms, not inside the banking system. Lloyds has recently said that two-thirds of its customer fraud cases begin on Meta platforms.
By Meta’s own internal projections, reported by Reuters in a Pulitzer-winning investigative report, the company expected to earn about $16 billion in a single year from scam and banned-goods ads — roughly 10% of its global revenue.
The company has disputed those figures and, in the recent hearing, estimated that it was likely 3-5% of its overall revenues, putting the figure closer to $6 billion.
There’s a way to turn this around.
1. Make platforms liable for the scam ads they profit from. If they won’t police themselves, they'll foot the bill — not victims, not banks. They should also have to report to regulators, as banks already do, on their anti-fraud efforts.
2. Legislate a cooling-off period on unusual transactions that a bank or credit union flags as suspicious. Customers can opt out, but they give up part or all of their reimbursement. That 24-hour pause can help break the emotional spell behind romance and investment fraud, the two costliest categories.
3. As lawmakers tackle online fraud they focus on a shared liability model between online platforms, banks, credit unions, fintechs, and their customers. When we put financial institutions alone on the hook, those costs land on customers through fees, interest, and, in the US, tax write-offs. That means everyone pays for the scam.
What we need instead is a shared responsibility model between online platforms, banks, credit unions, fintechs, and their customers.
For financial institutions, that means providing and tracking cybersecurity and fraud education programs for their customers.
Independent research, along with Beauceron’s data from employee awareness, suggests that passive awareness campaigns without a feedback mechanism fail to deliver meaningful risk reduction.
However, with a feedback mechanism, it is possible to measure attitude shifts and subsequent positive behavioral changes.
And it makes a huge difference. Helping people believe they matter reduces the risk of cyber fraud.
People who don’t think they have a role to play click 37% more often on scam emails. Helping them realize they do matter not only reduces clicks but also increases the chances they’ll spot, stop, and report online fraud.
We don’t have to resign ourselves to drowning in digital fraud.
There’s a better way, and we can all play a part.