The Stopping Fraudulent Payments Act gives federal agencies new authority to temporarily pause, delay, or segment government payments when there are signs of fraud or improper payments. When an agency detects a fraud-risk indicator—such as unusual payment patterns or data mismatches identified through existing federal systems—it can hold the payment for review while notifying the recipient within two days of the reason for the hold. The recipient then has the opportunity to contest the decision or provide clarifying information, and the agency must issue the payment within 30 days if no fraud is found, or within 7 days if the recipient successfully contests the hold. The bill also allows agencies to let routine, consistent portions of a payment proceed while holding only the suspicious or anomalously large portion for review. The Treasury Department and Office of Management and Budget must issue implementing regulations within 180 days and provide annual reports to Congress on the number of payments paused, the percentage ultimately issued, and federal savings from prevented fraudulent payments. The law takes effect one year after enactment.
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