Authorized push payment fraud has become the fastest-growing financial crime, and banks often won't give you your money back
The most effective scam targeting Americans right now doesn't require hackers to steal your password or trick you into clicking a malicious link. Instead, it relies on something far simpler: convincing you to send your own money willingly.
Authorized push payment fraud, where victims are deceived into transferring money directly to scammers, has surged to become one of the costliest forms of financial crime in the country. Consumers reported losing more than $12.5 billion to fraud in 2024, a 25% increase over the prior year, according to FTC data released in March 2025. Impersonation scams alone accounted for $2.95 billion in losses, making them the most commonly reported fraud category year after year.
How the scam works
The setup is deceptively straightforward. A caller claims to be from your bank's fraud department, warning that suspicious activity has been detected on your account. They sound professional, urgent, and even have some of your personal information.
To "protect" your funds, they instruct you to transfer money to a "safe" account. Victims comply because they genuinely believe they're preventing theft. By the time they realize the fraud department was fake, their money has vanished through payment apps like Zelle, Venmo, or Cash App, according to warnings from the CFPB issued in December 2024.
Why banks often refuse refunds
What makes this scam particularly devastating is the aftermath. Because victims technically authorized the transaction themselves, many financial institutions have refused to reimburse them. This legal gray area has sparked intense scrutiny from regulators and lawmakers alike.
In December 2024, the CFPB sued Zelle's operator and three major banks, alleging customers had lost more than $870 million to fraud since the platform launched in 2017. But the lawsuit was dropped in March 2025 after a change in federal administration, according to NPR.
New York Attorney General Letitia James has since filed her own lawsuit against Zelle's operator, alleging the platform enabled over $1 billion in fraud between 2017 and 2023, according to the NY AG's office.
The distinction between "authorized" and "unauthorized" fraud has become the crux of consumer protection debates. When a hacker steals your password and drains your account, federal law typically requires banks to make you whole. When you're tricked into sending money yourself, those protections largely disappear.
The impersonation playbook
Scammers have refined their techniques to an alarming degree. Common impersonation schemes include fake IRS agents demanding immediate tax payments, supposed utility company representatives threatening service disconnection, and individuals posing as family members in emergencies.
Government impersonation is one of the most reported fraud categories. Losses to government imposter scams specifically hit $789 million in 2024, up $171 million from the prior year, according to FTC alerts published in April 2025. These calls often spoof legitimate government phone numbers, adding another layer of perceived credibility.
Younger victims aren't immune either. Employment scams have targeted job seekers with fake remote work opportunities, asking them to deposit checks and wire portions back, or purchase equipment through specific vendors that turn out to be fraudulent.
Red flags to watch for
Financial experts and consumer advocates recommend extreme caution with any unexpected contact requesting money transfers. Legitimate organizations, including banks, the IRS, and utility companies, will never demand immediate payment through gift cards, cryptocurrency, or peer-to-peer payment apps.
Any caller creating urgency or threatening immediate consequences should be treated with suspicion. Hanging up and calling the organization directly using a number from their official website remains the most reliable verification method.
What's next
With federal enforcement in retreat, state attorneys general are stepping in. New York's lawsuit against Zelle could set precedent for how payment platforms handle fraud claims. Congressional Democrats including Senators Elizabeth Warren and Richard Blumenthal sent letters to major banks in July 2025 demanding answers about their fraud tracking and reimbursement policies, according to Payments Dive.
Some banks have begun voluntarily expanding their fraud reimbursement policies. JPMorgan Chase announced in February 2025 it would block Zelle payments originating from social media sites, acknowledging the platform's vulnerability to scammers.
Until clearer regulations emerge, the burden falls largely on consumers to recognize that the most dangerous scams don't look like scams at all. Consumer advocates recommend treating any unexpected contact requesting money transfers with extreme skepticism, hanging up, and verifying through official channels before sending a dime.
