What is Section 230 & Scam Liability: Explained for US Banks

Losses reported to the FBI’s Internet Crime Complaint Center (IC3) exceeded $20 billion in 2025. Legislation is moving through Congress. A Massachusetts court just found a social media platform liable for harmful content.

In this episode, Ken Jochims, Head of Product Marketing, speaks with Chris about what these developments mean for fraud programs at US banks and credit unions. 

For more on this challenge, see Acoru’s approach for US financial institutions. 

What is Section 230?

Section 230 is a US law that generally limits when online platforms can be treated as the publisher of content posted by their users. The Massachusetts ruling discussed in this episode addresses claims about a platform’s own design and conduct. It does not establish that the platform was liable for scams. 

Key Takeaways

• The fraud mix has inverted. Authorized fraud now accounts for over 80% of losses — up from around 20% a few years ago. Most bank fraud programs were built for the opposite problem.

• The SCAM Act would force coordination across the ecosystem. Banks have long argued they can't solve a problem that originates on social media platforms. This legislation, backed by the ABA, would bring platforms, payment networks, and regulators into the fight.

• The Massachusetts ruling tests the limits of Section 230. The state’s highest court held that Section 230 does not automatically shield a platform from claims based on its own product design and conduct. The case concerns alleged harms to young people, not a finding that a platform is liable for scams. Its implications for scam-related cases remain to be seen. 

• Reported internet crime losses exceeded $20 billion. The FBI’s 2025 IC3 report records $20.877 billion in losses reported through complaints. This is a reported-loss figure, not a measure of all authorized fraud losses. 

• No crypto product doesn't mean no crypto exposure. Customers move money through traditional bank accounts to fund crypto platforms, or unwittingly act as mules. The exposure exists regardless.

• Mandatory reimbursement in the US is not unthinkable. It's still years away. But the direction of legislation, court outcomes, and regulatory scrutiny means fraud leaders should be modeling their exposure now, not when it arrives.