By Mathilde Bonneau, Government Relations
Originally published in the Consumers International Report – Stopping Online Scams: Building Consistency And Coordination For Consumers
As the fraud landscape evolves, cross-sector engagement and platform accountability are emerging as critical frontiers in scam prevention.
Liability frameworks in traditional, unauthorised fraud focus on verifying the payer’s identity. Scams present a different challenge: they rely on deception and social engineering to induce authorised payments, manipulating victims into completing transactions in good faith to a receiver reasonably believed to be legitimate. The central question is no longer only who is paying, but who is being paid - and whether that recipient is legitimate or part of a coordinated criminal enterprise.
To preserve trust in the digital economy, payment providers continue to invest heavily in prevention, detection, consumer education, and intervention tools. At PayPal, this includes AI-driven scam alerts, enhanced customer education, and proactive intervention models designed to disrupt suspicious transactions before completion.
However, traditional fraud responses alone cannot mitigate the growing scam threat. Scams typically begin upstream - on online platforms, telecom networks, search engines, or messaging services - and by the time the payment is made the harm is already well underway. Victims have often been carefully groomed or pressured, making prior education and warnings at the point of payment less effective. While upstream actors profess ongoing efforts to remove scam content, given the scale and adaptability of scam networks, stronger upstream accountability and partnership is necessary.
Effective cross-sector frameworks should clarify roles and responsibilities aligned with risk and operational capability across the scam lifecycle. Reimbursement regimes should protect victims while preserving incentives for strong prevention, linking liability to demonstrated investment in robust safeguards, collaboration, and data sharing and recognising those who invest in prevention and imposing proportionate consequences where controls are insufficient. Assigning liability exclusively to one sector risks distorting incentives and weakening upstream controls.
Equally important is the ability for cross-sector intelligence sharing, at scale and at speed, so that signals detected upstream can inform real-time risk decisions at the point of payment. Timely, actionable information exchange - supported by clear legal frameworks and appropriate safe harbors - would allow payment providers and other intermediaries to incorporate upstream signals into real-time risk decisions while safeguarding privacy and encouraging collaboration.
Only a framework that connects upstream disruption, downstream controls, effective information sharing, strengthened collaboration among all stakeholders involved, and public-sector capability building will meaningfully reduce the scale and impact of scams.
No single actor can address this challenge alone. Success should not be measured solely by how financial losses are allocated, but by our collective ability to reduce the lifespan of scams and prevent harm to consumers.