Biden’s Budget Blueprint Triples Fraud-Fighting Staff

Preventing fraud and identity theft is reportedly a key component of President Biden’s cost-cutting plans.

The administration’s budget blueprint includes targeting fraud by bolstering the Justice Department teams that investigate criminal organizations — tripling the number of such teams — and aiming to reduce identity theft by adding new funding to support those efforts, The Wall Street Journal (WSJ) reported Wednesday (March 8).

The White House estimates that there will be a savings of $10 for every dollar invested in oversight and enforcement efforts like these, the report said.

These proposals are included in a budget blueprint for the fiscal 2024 budget plan that Biden will release Thursday (March 9), according to the report.

The blueprint is unlikely to be passed as is, because Republicans will probably oppose many plans included throughout the document, but this marks the initial proposal in what is to be a back-and-forth between the administration and the legislature that will last for months, the report said.

The U.S. government incurred tens of billions of dollars in losses due to the high volumes of fraud around the pandemic-era Paycheck Protection Program (PPP).

The WSJ report comes about a week after the Federal Trade Commission (FTC) said that consumers lost $8.8 billion last year to various fraud schemes — a total 30% higher than that recorded in 2021.

The five most reported forms of fraud in 2022 were imposter scams; online shopping scams; prizes, sweepstakes and lotteries; investment-related reports; and business and job opportunities, the FTC reported.

Most businesses and financial institutions (FIs) have also been touched by the rising amount of financial crime.

Sixty-two percent of FIs experienced an increase in financial crime, and an even greater shares of smaller FIs — those with between $5 billion and $25 billion in assets — experienced such an increase, according to “The State of Fraud and Financial Crime in the U.S.,” a PYMNTS and Featurespace collaboration.

The report also found that most FIs saw criminals increasingly using sophisticated methods to target their organizations and clients as a significant problem in their efforts to fight financial crime. Approximately one-quarter of the largest FIs by asset size said this is the most important challenge they face.