Montana’s Fight Against Bitcoin ATM Fraud, AI Scams, and Rising Insurance Costs
Since taking office in January 2025 as Montana’s 18th State Auditor and Commissioner of Securities and Insurance, James Brown has focused on tackling financial fraud targeting Montanans, especially in the areas of cryptocurrency and artificial intelligence. His office is also addressing concerns around wildfire-related insurance coverage and rising insurance rates.
Key Challenges Facing Montana Insurance and Securities
Brown highlights several pressing issues: rising insurance costs across all lines, difficulty in securing homeowners insurance with wildfire protection in western Montana, and a surge in fraud involving cryptocurrencies, particularly through Bitcoin ATM machines. Additionally, the growing presence of digital currencies presents regulatory challenges his office is working to address.
His agency continues to handle routine consumer complaints related to insurance and wealth management while prioritizing these emerging threats.
Bitcoin ATM Fraud: A Growing Threat
Montana has seen an alarming rise in fraud tied to Bitcoin ATMs. Brown’s office has identified dozens of these machines in cities like Billings (19 machines) and Helena (12 to 13 machines). Estimates suggest Montanans have lost around $600,000 to scams involving these devices.
The scam typically starts with an unsolicited call, email, or text message where fraudsters build trust and pressure victims to withdraw cash from a bank or ATM near a Bitcoin ATM. The scammers keep victims on the phone during the transaction, creating urgency to complete the transfer. Once the money is deposited into the Bitcoin ATM, recovery becomes nearly impossible.
Brown explains that many fraudsters operate internationally, often linked to countries like North Korea, making enforcement complex. His office collaborates with the FBI and the Montana Attorney General but lacks jurisdiction over cross-border crimes.
Restitution Fund and Prosecution Efforts
Montana stands out as one of six states with a securities restitution fund, which has distributed approximately $2.2 million to 141 victims, capped at $50,000 per person. However, many victims lose amounts exceeding this limit, underscoring the fund’s limitations.
For cases within state jurisdiction, Brown’s office is prosecuting individuals involved in cryptocurrency pyramid schemes. These schemes attract investments promising returns but collapse, leaving losses for many.
To enhance enforcement, Brown is repurposing attorney positions within his office to focus specifically on fraud prosecution.
Artificial Intelligence: A New Frontier for Fraud
AI fraud presents fresh challenges. Fraudsters increasingly use AI tools to mimic voices and deceive victims—often seniors—with scams involving fake calls claiming family members are in urgent trouble and demanding immediate money transfers.
Brown’s office has four dedicated investigators trained to identify and combat AI-driven fraud, adapting to the sophistication of these scams. However, the anonymity and complexity of AI fraud require ongoing adjustments to enforcement strategies.
Balancing Insurance Regulation and Consumer Protection
Insurance regulation constitutes about 60% of Brown’s agency work. The office ensures insurance companies operating in Montana remain solvent and their rates are reasonable—not excessive. Although the office cannot set premium rates, it has saved Montana consumers nearly $16 million this year by blocking unreasonable rate hikes.
The agency also investigates consumer complaints and can take regulatory or criminal action against companies or individuals violating insurance laws.
Addressing Wildfire Risk and Homeowners Insurance
Homeowners in areas like Big Sky face skyrocketing insurance costs, with some paying as much as $40,000 to $90,000 annually. Brown notes that insurance companies are increasingly non-renewing policies due to wildfire risk, although Montana law prohibits cancellations based solely on immediate wildfire risk.
The office encourages communities to improve fire safety infrastructure—such as fire stations, proper zoning, and multiple access routes—to reduce risk and help maintain insurance availability.
Brown also points out that rising housing prices drive up insurance premiums since policies reflect replacement values.
Enhancing Outreach to Rural Montana
Committed to serving all Montanans, Brown secured $100,000 in funding to expand education efforts about fraud and insurance across the state. In 2025 alone, he has presented in around 25 counties, clarifying the office’s role and educating residents about wildfire risk scores and insurance options.
One notable legislative success was the change allowing insurers to offer premium discounts to homeowners who proactively fireproof their properties—something previously considered illegal under anti-rebating laws.
Practical Takeaways for Insurance Professionals
- Be vigilant about emerging fraud schemes involving cryptocurrency and AI, especially those targeting vulnerable populations like seniors.
- Understand the limitations of state jurisdiction in prosecuting cross-border crypto fraud and the importance of federal collaboration.
- Encourage clients in wildfire-prone areas to invest in fire mitigation measures and understand how wildfire risk scores affect insurance availability and premiums.
- Stay informed about legislative changes that impact insurance pricing and consumer protections.
- Support community efforts to improve fire safety infrastructure to help stabilize insurance markets in high-risk areas.
Insurance professionals interested in keeping pace with AI advances that affect fraud detection and prevention can explore specialized courses at Complete AI Training.
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