TRAPS Act Creates Federal Task Force to Combat Payment Scams, Mandates Victim Input

The new Taskforce for Recognizing and Averting Payment Scams Act—or the TRAPS Act—is essentially setting up a high-level federal SWAT team dedicated to fighting digital fraud. This bill recognizes that payment scams aren't just a nuisance; they are a major financial drain on everyday people, and the current system of fighting them is too fractured across different agencies and industries.

The Federal Fraud Fighting Team

Within 90 days of this bill becoming law, the Secretary of the Treasury must establish the Task Force on Payment Scams. This isn't just another government committee; it’s designed to bring together every major player currently dealing with fraud. We’re talking about people from the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the DOJ, the FTC, and the FCC, plus all the major banking regulators (OCC, FDIC, NCUA). This is a serious attempt at interagency coordination (Sec. 3).

Crucially, the Task Force won’t be staffed only by government officials. The Secretary must also appoint representatives from financial institutions, digital payment networks, and consumer advocacy groups. Most importantly, the bill explicitly requires the appointment of up to five people to represent scam victims and support networks. This means the people who have actually lost their savings to a phishing text or a fake call center will have a seat at the table, ensuring that the strategies developed are grounded in real-world harm, not just theoretical models (Sec. 3).

What They’re Actually Going to Do

The Task Force has a one-year deadline to produce a comprehensive report for Congress and the public. Their mandate is broad, covering everything from the latest scam tactics—like malicious ads and fake calls—to reviewing what other countries are doing to stop fraud. For the average person, the most important part of their work will be developing a national strategy for consumer education. They need to figure out how to make sure you know how to spot, avoid, and report a scam before you lose money (Sec. 3).

They are also tasked with figuring out how to improve law enforcement coordination. Right now, if you lose money to a scammer in another state or even another country, the investigation often hits a wall due to jurisdictional issues. The Task Force must recommend ways to better coordinate federal, state, local, and Tribal authorities to actually catch the people running these operations, not just block their bank accounts.

The Fine Print and Real-World Impact

If you’re a small business owner who’s constantly worried about business email compromise (BEC) scams—where a hacker impersonates a vendor or client to reroute payments—this bill specifically directs the Task Force to find solutions for that type of fraud. If you’re just a regular person trying to pay your bills online, the goal here is to create a more unified, smarter defense system across all the platforms you use for digital payments (Sec. 2).

While this is an advisory group, meaning it doesn't enact new rules directly, its recommendations will drive future legislation and regulatory changes. The Task Force will sunset three years after its first report, giving it a fixed timeline to deliver actionable results. One minor point to note: the Task Force is exempted from standard government advisory committee rules, which might streamline its operation but slightly reduces typical administrative oversight (Sec. 3). Overall, this is a proactive step toward making the digital payment landscape safer, finally bringing all the necessary players—including the victims—together to fight back against sophisticated fraud. The reports will be public, so we’ll all be able to see exactly what they recommend.