JONESBORO, Ark. (KAIT) – Financial fraud continues to plague Arkansas residents as scammers target victims through phone calls and text messages, costing Americans over $16 billion in losses in 2024 according to the Federal Bureau of Investigation.

Lorrie Trogden, president and CEO of the Arkansas Bankers Association, said the losses increase by double-digit percentages each year.

“They get higher and higher every year, and not by one or two percent, by double-digit percent,” Trogden said. “Despite how big those numbers are, we know those aren’t the real numbers. They’re actually much higher because people don’t report.”

Personal costs drive legislative action

Former State Representative Carlton Wing experienced the effects firsthand when his childhood Sunday school teacher fell victim to a lottery scam.

“She gets this email that says, ‘Congratulations, you’ve won the lottery and we’re going to give you $18 million for your winnings,’” Wing said. “She was so excited about that. They just said, ‘You just have to pay the taxes on the lottery and that’s how it starts.’”

Wing said repeated efforts by himself and authorities to stop his teacher were unsuccessful. The average person loses over $80,000 in scams, Wing said, though his teacher’s case involved “much, much more than that.”

The experience led Wing to help pass Act 1015 through the Arkansas legislature in 2021, designed to help financial institutions delay or stop certain attempts to scam elderly residents.

“There was really not much of a model anywhere else in the country. We were able to pull things from a few states and then apply them to Arkansas,” Wing said.

Banks face challenges stopping customer-initiated fraud

Every dollar lost to financial fraud costs a financial institution $5.75, Trogden said. Scams make up about 38% of overall fraud loss for financial institutions.

“Part of the problem is that many of these scams are customer initiated,” Trogden said. “So, they are contacted by the scammer and then they willingly, albeit they’re not just doing it, they’re being tricked into it, but they are willingly giving over their banking information or they’re going to the bitcoin machine.”

Bank employees are trained to identify signs of scams, but stopping customers remains difficult even when workers recognize fraud attempts.

“We have put every countermeasure in place that we could possibly think of but at the end of the day if the customer initiates the funds transfer, then there’s not much we can do about it,” Trogden said.

Romance scams, imposter scams, and online shopping scams are the most common scams bankers encounter. Victims typically respond the same way, Trogden said: “I thought this one was legitimate. I’m so careful. But this seemed so every day.”

Attorney general launches task force

Arkansas Attorney General Tim Griffin launched a financial fraud task force last year after recognizing the need for better coordination with financial institutions.

“The reason we wanted to do that is we would often learn of a scam and we would find out that the banks were seeing it before we do,” Griffin said. “Why don’t we start meeting with banks so we know it ahead of time?”

Griffin said his own mother receives frequent scam attempts through texts and phone calls.

“This threat involves everybody but it’s particularly focused or troublesome for the elderly,” Griffin said.

The task force meets quarterly to share information about crimes financial institutions are seeing, giving the attorney general’s office better tools to pursue perpetrators. Griffin said his office cannot always recover victims’ money but emphasized the importance of reporting fraud.

“You’re putting it on our radar, you’re telling us what’s going on and we know what to look out for and we can warn others about it and save money as a result,” Griffin said.

Artificial intelligence presents new challenges

Trogden called artificial intelligence a “double-edged sword” in the fight against fraud.

“AI can data mine for any facts about you, any photos of you, and put together a profile that it is you trying to do these transactions or trying to do these things but then, on the flip side, banks are able to harness that same power to look for this fraud and to utilize it within their banking systems,” Trogden said.

Prevention tips for residents

Trogden offered several recommendations to protect against scams:

• Never provide information to unsolicited contacts online
• Call back using official numbers to verify legitimate requests
• Only open texts or emails from known contacts
• Establish family passwords to prevent imposter fraud
• Report suspected fraud immediately to banks before contacting law enforcement

“Do not talk to these people,” Trogden said. “They are criminals and they don’t deserve your kindness.”

She emphasized the importance of quickly reporting the fraud to their bank, even before calling law enforcement.

“Call the bank,” she said. “Because the quicker you let the bank know, there might be an opportunity to claw that money back.”

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