Key Points
- The U.S. Treasury’s enhanced fraud detection processes, including AI-powered machine learning, prevented and recovered over $4 billion in fraudulent and improper payments in FY 2024, a significant increase from $652.7 million in FY 2023.
- Treasury’s Office of Payment Integrity expanded risk-based screening, prioritized high-risk transactions, and implemented AI-driven check fraud detection, resulting in billions of dollars saved through prevention and recovery efforts.
In a groundbreaking achievement, the U.S. Department of the Treasury has announced that its advanced fraud detection processes, bolstered by machine learning AI, have prevented and recovered over $4 billion in fraudulent and improper payments during the 2024 fiscal year. This marks a dramatic increase from the previous year’s figure of $652.7 million, showcasing the effectiveness of the Treasury’s technology-driven approach to combating financial fraud.
The Office of Payment Integrity (OPI), operating within the Bureau of the Fiscal Service, spearheaded these efforts by enhancing fraud prevention capabilities and expanding services to a broader customer base. The implementation of risk-based screening alone resulted in $500 million in fraud prevention, while the identification and prioritization of high-risk transactions contributed to a staggering $2.5 billion in prevented losses.
AI Takes Center Stage in Financial Security
One of the most notable advancements in the Treasury’s arsenal against fraud is the deployment of machine learning AI to expedite the identification of Treasury check fraud. This cutting-edge technology was responsible for recovering $1 billion, demonstrating the power of artificial intelligence in safeguarding public funds.
Deputy Secretary of the Treasury Wally Adeyemo emphasized the department’s commitment to responsible stewardship of taxpayer money, stating, “We’ve made significant progress during the past year in preventing over $4 billion in fraudulent and improper payments. We will continue to partner with others in the federal government to equip them with the necessary tools, data, and expertise they need to stop improper payments and fraud.”
Expanding Partnerships and Future Outlook
Looking ahead, the Treasury is not resting on its laurels. The department is actively working to establish and strengthen partnerships with new and high-risk programs, including federally-funded state-administered initiatives. A notable example is the May 2024 data-sharing partnership between the Treasury and the Department of Labor, which aims to provide state unemployment agencies with access to critical data sources and services through the Unemployment Insurance Integrity Data Hub.
As online payment fraud is projected to surpass $362 billion cumulatively by 2028, the Treasury’s proactive approach and leveraging of emerging technologies position it as a crucial bulwark against financial fraud in the digital age. With its responsibility for disbursing approximately 1.4 billion payments valued at over $6.9 trillion annually, the Treasury’s enhanced fraud prevention measures are set to play an increasingly vital role in protecting the integrity of federal financial operations.
