By Hector Barajas
As a small business owner in Northern California, I understand that trust is the foundation of every consumer we serve. My wife and I have dedicated our time to our business and community-centered organizations, including nonprofits that work to ensure that every Northern California family has a fair shot. Through our efforts, we have seen firsthand how local institutions can change lives and strengthen neighborhoods.
But today, those same organizations, along with small businesses like ours, face a growing and dangerous threat: fraud and financial scams.
Every day, Americans lose significant sums of money to sophisticated criminals who prey on people through text messages, phone calls, fake websites, and social media scams. These scams target every part of the financial system, from cryptocurrency and peer-to-peer payment apps to checks, retirement accounts, and even gift cards and gold bars. Criminals are becoming more organized, more technologically advanced, and more aggressive in targeting vulnerable individuals and organizations.
For small businesses and nonprofits, the consequences can be devastating.
Unlike large corporations, community organizations and family-owned businesses often operate on tight budgets with limited staff and limited cybersecurity resources. And today, it’s becoming more common for cybercriminals to exploit this lack of protection and target donor databases, payment systems, and financial accounts.
A single scam can drain charitable funds, compromise donor information, disrupt payroll systems, or undermine years of community trust. Nonprofits depend on the confidence of donors and volunteers. When cybercriminals steal from charitable organizations, they are not just taking money, they are taking resources away from the community members that need them most.
What’s evident from the rise in these scams is that they’re no longer isolated incidents. They are part of a complex national and international criminal enterprise that requires a coordinated and comprehensive response.
Congress must recognize this and adapt its response to address it. There are several important policy priorities lawmakers should consider immediately.
First, Congress should provide increased resources for law enforcement agencies tasked with identifying and dismantling scam networks. Local, state, and federal authorities need the staffing, technology, and investigative tools necessary to stop these criminals before more Americans become victims.
Second, the federal government should establish a cross-agency task force that works closely with financial institutions, technology companies, and law enforcement to identify emerging scam trends and coordinate enforcement efforts.
Third, Americans need a simple and transparent reporting system that allows victims to quickly notify the government when fraud occurs. Too often, victims are left confused about where to report scams or how to recover stolen funds.
Fourth, stronger international cooperation is essential. Many scam operations originate overseas, beyond the immediate reach of local authorities. Congress should support stronger partnerships with foreign governments to target and shut down international scam centers, particularly those in Southeast Asian countries like Cambodia.
Finally, policymakers should explore successful solutions adopted in other countries, including registration requirements for mass text messaging systems and stronger safeguards for suspicious financial transactions.
Fraud is not a partisan issue. Nor is it an issue that can be solved by new laws or regulations requiring financial institutions and platforms to reimburse victims of scams. These policies, floated in both DC and Sacramento, will not stop crimes because they do not target the crooks. They will also have serious unintended consequences for consumers and business owners, including new fees and unnecessary friction.
Scams and fraud take place anywhere money can be exchanged. They impact businesses, nonprofits, retirees, working families, and entire communities. Congress has an opportunity to act decisively and protect Americans from increasingly sophisticated criminal networks. Our communities, charities, and small businesses deserve nothing less.
Hector Barajas is a member of the National Federation of Independent Business, a Small Business Administration Thrive graduate, and the president and CEO of Amplify360, Inc.
