TRAPS Act
The TRAPS Act would create a new Task Force on Payment Scams within the Department of the Treasury, chaired by the Secretary of the Treasury, to study and combat electronic payment scams. The Task Force would include regulators, financial institutions, payment networks, consumer groups, and victims’ representatives. Its core duties are to examine scam trends and best practices, assess international approaches, develop consumer education strategies, coordinate law enforcement efforts, and consider additional federal legislation to curb scams such as spoofed calls, scam texts, malicious online ads, and business email compromise. The Task Force must report its findings and recommendations within one year, with annual updates thereafter, and would terminate three years after it submits its required report. The Act also exempts the Task Force from Chapter 4 of Title 5 (a reference typically related to federal advisory committees) and specifies no extra compensation for civilian members.
Key Points
- 1Establishment and membership
- 2- Creates the Task Force for Recognizing and Averting Payment Scams (TRAPS) within the Treasury, chaired by the Secretary or a designee.
- 3- Includes a broad cross-section of agencies (CFPB, FCC, FTC, DOJ, OCC, Fed, NCUA, FDIC, FinCEN) and representatives from financial institutions, a digital payment network, a community bank, a consumer group, an industry association, plus up to 5 victims/scam-support representatives.
- 4- Members serve for the duration of the Task Force; vacancies filled in the same manner as original appointments.
- 5Purpose and scope
- 6- Examine trends and developments in payment scams, identify effective prevention methods, and issue recommendations.
- 7- Adopt a cross-sector approach to reflect scams affecting financial services, telecommunications, and technology.
- 8- Include input from victims and industry experts to inform prevention strategies.
- 9Meetings and duties
- 10- Must meet at least three times in the first year and then as determined appropriate (including via remote tech).
- 11- Duties include evaluating best practices against spoofed calls, scam texts, ads, pop-ups, and fake websites; reviewing international efforts; identifying methods scammers use on payment platforms; planning consumer education programs; coordinating law enforcement efforts; consulting with state/local/Tribal entities; considering additional federal legislation; and addressing business email compromise.
- 12Reporting and transparency
- 13- A comprehensive report due within one year, detailing reviews, recommended strategies, legislative/regulatory options, and cooperation enhancements across federal, state, local, and Tribal authorities (with data harmonization and improved reporting).
- 14- Annual updates after the initial report, publicly available online.
- 15Legal framework and sunset
- 16- The Task Force is not subject to Chapter 4 of Title 5 (exemption from certain federal advisory committee rules).
- 17- Civilians and federal employees serving on the Task Force serve without additional compensation beyond standard pay.
- 18- The Task Force terminates three years after it submits the required initial report, effectively setting a finite sunset unless extended by further legislation.