December 3, 2025 • 37 mins
Fraud losses are climbing, checks are supposedly fading, and yet check fraud is hitting all-time highs. We sat down with Mike Timoney, a payments veteran now leading secure payments work at the Federal Reserve, to unpack that paradox and chart a path to stronger defenses across banks, fintechs, and businesses of every size. The conversation moves from frontline realities to system-wide fixes: why paper is still a prime target, how modern scams bypass technology to persuade people, and what practical tools can help teams react faster than criminals can pivot.
Mike shares a global-to-local career arc (from international banking to ACH, wires, and cards) before taking on fraud across channels and ultimately joining the Fed. That perspective shapes a clear mission: keep the U.S. payment system trusted and reliable by educating the industry, building relationships, and mapping threats without prescribing vendors.
We dive deep into two new resources: a check fraud mitigation toolkit with visual examples, pattern tells, and tips like positive pay; and a scams mitigation toolkit that decodes phishing, smishing, and business email compromise through case studies and actionable defenses. Both are designed as short, usable modules that help community banks train staff and help larger teams keep pace with evolving tactics.
We also tackle the hard part: collaboration and transparency in a fragmented U.S. landscape. With thousands of institutions and varied state privacy rules, information sharing is tough - but not impossible. Mike outlines privacy-enhancing approaches that share patterns, not identities, so institutions can broadcast what criminals are doing without exposing who was hit. AI features throughout the episode as a double-edged sword: it supercharges detection and accelerates response, while giving fraudsters new ways to scale social engineering. The key is narrowing the response gap through better models, faster signal exchange, and continual education.
Walk away with three priorities: make fraud everyone’s job through constant micro-education, keep learning as tactics shift, and share signals across your peer network. If this conversation helps you see a new control, training idea, or partnership opportunity, subscribe, share the episode with your team, or contact Mike for more information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:01):
Welcome to the Signal Federal Powered by the
Leaders in Payments Podcast,where we are cutting through the
noise to reveal what trulymatters in payments and
fintechs.
SPEAKER_00 (00:22):
So, Mike, thank you so much for being here and
welcome to the show.
SPEAKER_01 (00:26):
Happy to be here.
Expect to be here.
SPEAKER_00 (00:28):
Great, thanks.
This episode is part of ourtechnical series where we're
cutting through the noise toreveal what truly matters in
payments and tech.
The Federal Trade Commissiondata shows that consumers
reported losing more than$12.5billion in fraud in 2024, which
was a 25% increase over 2023.
That's on the consumer side.
(00:48):
And half of all businessesglobally report to have been
affected by fraud.
So you know more than I do,Mike.
Fraud and scams are a hugechallenge across payments in
fintech.
And that's what we're going tobe diving into today.
So before we get into the meatof the conversation, can you
give us a quick snapshot of yourpersonal background, maybe where
you grew up, where you call hometoday, a few things like that?
SPEAKER_01 (01:08):
Absolutely.
And interestingly enough, I washaving this conversation with
some folks the other night at adinner event.
I was traveling and they werelike, oh, I didn't know that.
I didn't know that.
And so I've got kind of a weird,you know, a travel background.
I originally, my parents areimmigrants to the United States.
So I'm a first generationAmerican.
(01:29):
I was born in Philadelphia, butreally never lived in
Philadelphia.
My parents, after I was born,went back to their home country,
which was Ireland.
So I actually grew up in Irelanduntil I was about 11 years old.
And so that was my, I know Idon't have an accent when I came
back across.
I had a very strong accent.
But uh yeah, so I grew up inIreland.
(01:50):
And if you know the history ofthe troubles in Ireland, my
parents ultimately, when we werein the midst of that, decided it
was time to leave.
And my uncle had actually movedto Canada.
So my parents then, instead ofimmigrating back to the US, they
went to Canada this time.
And so then my formative teenageyears, high school, all that,
and for and college, wereactually in Canada originally.
(02:11):
And so I went to college,surprisingly, for architecture.
I had graduated and I wasworking with an architect in
Toronto and you know, realizedthat I needed more education in
that space if I really wanted todo that forever.
And I started looking to the USbecause I had citizenship,
because I was born in the UnitedStates.
(02:32):
And so I decided I didn't wantto be in the cold winter area.
So I was like moving southsomewhere.
And uh, North Carolina at thetime had a very good
architecture program.
And my boss at the time knewabout it and said, hey, you
should look there.
So I ended up coming toCharlotte to be an architect.
And I got into the program, thearchitecture program, and uh,
(02:55):
but at that time I realized Ijust didn't have the artistic
flair for architecture.
I had the linear, you know,science brain, math and science
brain.
So I would have been a greatengineer, but you know, we
didn't have the internet backthen, so I couldn't just search
for all this stuff to figure itout.
So I was already accepted at theschool, so I just decided I'd
get into business.
(03:15):
That got me into the that sideof it.
So I ultimately ditchedarchitecture and became uh got
into business.
SPEAKER_00 (03:23):
Okay.
Can you walk us through yourprofessional journey and how you
got to the Federal Reserve?
SPEAKER_01 (03:28):
Absolutely.
So the first time I went tocollege for architecture, they
had a the program I was in was aco-op program.
And so, you know, you obviouslyhad to work while you're going
to school.
So I was in college for businessand I was like, they have a
co-op program here.
I was actually paying forcollege and working for an
architect here in Charlotte aswell, because I had the you know
the background.
But then I went to the co-opoffice and they they said, Yeah,
(03:50):
you know, we've got this gig atuh Bank of America.
Would you like to work at Bankof America?
They're headquartered inCharlotte, makes sense.
So I I did that for a couple ofsemesters while I was going to
school.
And when I was graduating, thebank, I was working in the
international, what was calledthe international department
back then, and they wanted tobring me on board and put me in
(04:11):
a management program.
And so I was like, yeah, thatsounds great.
So I joined to be in this new,they they created it for me,
this management program torotate me through the different
components of the internationalbanking world.
And so I started learning, youknow, different things,
correspondent banking, I learnedthings in trade finance.
(04:32):
I actually worked in the financegroup for a bit and they moved
me around.
I learned a lot of things.
And then ultimately I got intosome asset back financing, you
know, that the US government didand things like that.
And so I started learning abunch of that, and I really
enjoyed it.
And so, you know, like youmentioned that you work for a
bank, Greg, and you kind of getopportunities to do different
(04:54):
things over time.
And so, like you, my backgroundwas in payments.
So I ultimately ended up in theworld of ACH, wire, check, all
of that, not from an operationalperspective, but more for the
commercial clients, helping themdevelop our products and evolve
the online presence and all thatsort of thing, the tools to help
(05:16):
them do their treasurymanagement.
And so I did that for a good,you know, 15 years, probably,
like in some form or fashion,moving around in different
roles.
And then right around, I thinksomewhere probably around 2008,
maybe, if you remember that,that was when some of the very
first data breaches werestarting to happen, you know,
(05:36):
the Target and the Home Depotand things like that.
And our organization startedseeing some of our customers
fall victim to being scammed inthe business email compromise
and sending and sending moneyoverseas.
And so we had a large retailfraud group, but we really
didn't have a commercial fraudgroup.
So that got created.
(05:57):
And who became my boss went tosome folks in the payments world
and said, Hey, I'm looking forsomeone in those payments that
would be interested in learningabout fraud.
And they knew I was looking foranother change.
It was that time, you know.
I'd been doing a job for a fewyears, and I was like, I really
wasn't enjoying it as much.
And they said, Do you want doyou want to learn something
about fraud?
(06:17):
And it was like a lifeline.
And I said, sure, I'll I'll giveit a shot.
And since then I've been doingthat.
So 2008, I got into fraud, Ilearned a lot.
I worked in fraud for wires,ACH, and uh mostly.
I worked in it at the good timewhen Wires and ACH would shut
(06:38):
down on Friday afternoon orFriday evening and didn't come
up till Sunday night, right?
So no fraud happened over theweekend, so you could actually
have a have a weekend in thefraud world.
But then uh, you know, then theyI guess I was doing a good job
and they said, Hey, we want youto take on commercial card.
And that's a whole differentballgame.
That's 247, 365, right?
(06:58):
And uh, so I again learnedsomething brand new, the card
business, love the cardbusiness, and then the fraud
that happened in that space.
And then one day I I literallygot a call from a recruiter,
which you know happens over yourcareer, and usually you can
delete them.
And this one said they were withthe Federal Reserve.
And I was like, oh, what's that?
You know, so I listened to itand uh and I actually called it
(07:21):
back, and um it sounded like agood opportunity.
So I started the process ofinterviewing with the Fed.
And let me tell you, that wasnot a fast process.
It took six months for me toactually get on boarded.
I think we started in Septemberof 2018, and I went came on
board in March of 2019.
You know, that was that was goodanyway, I think.
(07:43):
So now I've been with the Fedalmost seven years, and uh I
really enjoy it.
It's a different perspectivethan being on the banking side
for so long.
And uh I run a team now that'sfocused on you mentioned it,
payment system improvement uhand secure payments within that,
and we're focused on fraud andsecurity.
Yeah, that's what got me there.
I know, along with his story.
(08:04):
But it's uh like all of us, welearn as we go along and we
start to find the things welike.
You know, the the boss at thetime, I think he he was smart
saying that it's easier to teachsomeone about fraud than his
payments, because it it takes along time.
You've been in payments, ittakes a long time to learn the
intricacies of not just domesticpayments, but then you get into
(08:28):
international payments and thatsort of thing.
So that has been a great levelset or foundation for me, you
know, to learn fraud was mucheasier.
SPEAKER_00 (08:38):
Okay, well, thanks.
It's very interesting, both thethe personal story and and the
professional journey.
Very interesting.
So let's go ahead and and diveinto the topic for today's
conversation.
And let's talk about, if youdon't mind, talk about payment
security at a high level.
Let's start at the high leveland then sort of what role does
the Federal Reserve play inthat?
SPEAKER_01 (08:58):
All right, so it's a it's a great question.
That was part of the reason Iwanted to join the Fed, because
you know, the Fed does play acrucial role in ensuring the
security of the payment systemand definitely is it's a
critical role because we need tohave people to believe and
understand that it is a securepayment network we have in the
(09:20):
United States and that they cantrust the network.
So when if I'm gonna pay you,Greg, that the money's gonna get
there and I don't have to worryabout it, that sort of thing.
And we know that it's gonna getthere.
It's you know, even aside fromfraud, it's gonna be reliant and
trustworthy and all that sort ofthing.
So that's one component of it.
On the other side of it, thesecurity of it is super
(09:41):
important, right?
And so what my team does isreally try to ensure that we are
trying to address the problemsof the industry from when it
comes to fraud security.
You know, there are people thatfocus on cyber and the CI CISOs
and that within organizations.
That's not what we do.
We're really focused on thatsafety and security of the
(10:01):
payment system and trying totrying to work through with the
industry very collaborativelywhat are the problems out there,
identify those, and then isthere something we can work on
together to try and solve those?
One of the things that we do alot though, other than
collaboration, is aroundeducational components.
We develop a lot of materials totry and help people understand
(10:23):
fraud.
The United States is quiteunique in our structure, our
financial structure.
I was just on a call prior tothis, and and we were talking
about other countries, and theywere talking about some of the
things they're doing from fraud.
And it's a little bit easier insome other countries because
they don't have thousands offinancial institutions.
They have 10 financialinstitutions or something,
(10:46):
right?
And so so when you start tothink about you only have to
work with 10 players versus10,000 players, right?
So it's a very differentinfrastructure we have.
So it creates this uniqueenvironment that we're in.
The other thing that my teamtries to do, and I think we do
well, is build relationshipswith people in the industry.
And we we are often out therespeaking at events, trying to,
(11:10):
and when I say speaking, we'reeither participating in the
panel or we're trying to educatepeople around specific topics,
and we get very good feedback onthat.
I think people really appreciatethat you know, we're there
working with them to try andsolve some of this.
And then, you know, webinars andmaterials that people can use,
especially, you know, it feelsgreat when people come up to me
(11:30):
at a conference or after I'vedone a speaking engagement and
they tell me, hey, I I love thatthis material you guys are
putting out.
Can you know, because we look,if it's helping them, that's
great, right?
That's what I at the end of theday.
We want people to make sure thatthey feel good about it.
And then if you think about theway the structure of the banks
are in the US, it's almost likea pyramid, right?
(11:52):
The top, there's a few banks,and then you get down and you
get to community banks andcredit unions, there's a lot of
them at the bottom.
So it's a very pyramid-shaped.
And and those banks at thebottom don't just don't have the
resources a lot of the times tobuild their own material.
So when we can provide it forthem, I think it makes their
life a bit easier.
That's pretty much what we do.
I would say the hot topics, wetry to stay engaged with what's
(12:16):
going on.
So another key component for usis just to stay aware of the
fraud landscape.
What's going on?
What are the hot topics?
Who are the players that aredoing something about it?
You know, as the Fed, we can'trecommend the you know tools and
solutions for folks, but we wantto make sure we understand them,
right?
Because we can ultimately talkto those folks and see how there
might be ways to help theindustry in general.
SPEAKER_00 (12:38):
Okay.
Well, let's talk about some ofthose educational things you've
done.
And in 2025, you released twoonline toolkits, the Scams
mitigation toolkit and the checkfraud mitigation toolkit, to you
know, really help educate theindustry about payments fraud,
what you were just talkingabout, and different ways to
detect it and mitigate it.
So can you speak to both ofthem, like why you created them
(12:58):
and exactly what they are?
SPEAKER_01 (12:59):
Yeah.
So the these toolkits were indirect uh response to the
industry.
So that I'll start there.
The first one is two things arehappening.
Two of the hottest trends thatare happening in fraud are check
fraud and scams.
And, you know, when you thinkabout it, some people may not
(13:20):
realize how big check fraud isin the United States.
Because remember, Greg, we'reall we're not we're not writing
checks anymore.
Checks are going away, andchecks are old school, right?
So, you know, I don't know ifyou have kids or not, but your
kids probably aren't writingchecks.
My kids are not writing checks.
So it's it's something when, youknow, in fact, other countries
think it's kind of strange thatwe're having this kind of
(13:41):
environment, you know, becausethey don't do checks, right?
So specifically on the check,I'll start with the check one if
that's all right.
So it's a significant problemthat we're still dealing with,
despite the growth of digitalpayments, which we saw a huge
upward trend in digital paymentswhen the pandemic came around,
right?
So so we've seen this big shiftin digital payments, and so you
would expect that we would theindustry is more focused on that
(14:02):
because there's huge growth, yougot to stay up on it.
It's technical technology has tobe implemented quickly to be
able to address it, all thatsort of thing, right?
It's very much like when we wentto the pandemic, all of a sudden
we had to have Zoom and Teamsand all these things that we
didn't have before.
So now these payments are goingand they had to do the same
thing.
Check usage has droppeddramatically.
(14:23):
So from the consumerperspective, we're probably
writing less checks, but thebusinesses are still writing
checks.
So there's still a lot of checksbeing processed in the country
in the billions, likemulti-billions.
But there's also multi-billiondollars in check fraud.
And so that's a to the pointwhere check fraud actually grew
to the highest it's ever been,even though the checks were
going down.
(14:43):
So check fraud up, check usagegoing down.
So that's not a good scenariobecause in my mind really says
that the cost of check fraud is,you know, for each check is
going upwards, right?
And so that that's a challenge.
For check processing, a lot ofthe smaller banks still do a lot
of that thing manually, right?
And so if you think about nowthey've got fraud, they've got
(15:07):
to be even more careful aboutthe items that they're trying to
process.
And so it can be devastating forthem from a check fraud loss
perspective.
So we were hearing that can youdo something about check fraud
education?
I mentioned my kids, right?
If one of my kids happened whenthey graduated college, if they
had gotten a job at a bank as abranch, you know, as a teller or
(15:28):
something, they would have hadto teach them about checks
because they don't know what acheck is, right?
So literally, when I talk tobanks today and they're hiring
people for the tellers, they'rehaving to teach them about
checks because they don't, youknow, they don't use them.
So think about that.
It's a little bit of a differentdynamic.
And so what we're trying to dois create some materials that
(15:50):
can help them in that.
It's not just to help themtrain.
I think the benefit is that theycan train their folks with it,
but it's also built in a waythat we're trying to use it from
there's examples.
It'll show you what a fitcounterfeit item might look
like.
It might show you what uh whatan altered item might look like.
Trying to think what else?
You know, what are the thingsyou should be looking for?
(16:11):
Even talks about some of theservices that could be
available.
Like again, we we are not goingto recommend the provider, but
like things like positive pay orpay positive pay are tools that
you can use that thatorganizations can use to try and
identify checks as the fraudule,right?
And uh so there's some of that.
But we get into you know, whatare the latest trucks and uh
(16:33):
trends in check fraud and thentips on identifying and
mitigating those?
Because ultimately at the end ofthe day, the goal is to try and
prevent it.
But if it's gonna happen, thenthere's got to be ways for you
to mitigate it, right?
Or you know, to take take thehit out of it or the pain out of
it.
So that's what we're doingthere.
So again, it's an old problem.
(16:53):
Check is an old problem, butwe're getting a lot of feedback
on these toolkits.
So I just mentioned to somebodythis morning that our those the
websites where we have thesetoolkits are our number one and
number two most hit over thelast couple of months.
So there's a lot of people goingthere, which is great.
I'm I'm excited to say thatpeople are actually using them.
(17:15):
We just put new material out onboth of them mid-October.
So just a couple of weeks ago.
We first released them in May,but now we added more material,
and we'll continue to do that.
We're getting feedback frompeople.
Now that they're starting todeuse them, you tend to get,
hey, what about this or whatabout that?
And so we're trying to do it invery consumable pieces of
information.
(17:36):
You don't have to read a whitepaper to learn about check
fraud.
We can give you an example or avideo or you know, small
examples, things like thatversus having to read a book,
right?
That's we all don't have time tobe reading a book.
So this is why we've designedthem this way.
The other one, scams, scams havebeen around forever, right?
And and it's nothing new.
(17:57):
But what's happened is we'veseen a surge in scams as well.
And I and I would say there's acouple of reasons for that.
And the same for the growth incheck fraud.
I think the root some of thereasons around it is the banks
with digital payments have donea great job trying to keep the
bad guys out and try to make thepayments safe and secure.
So if you think about it from acheck fraud perspective,
(18:20):
everyone was investing indigital technology and fraud
solutions, maybe didn't do asmuch but checks because they're
supposed to be going away.
And it's also a paper item,right?
So it's not secure.
When you put a check in themail, you have no idea how many
people touch it before it getsto meet, right?
And so there's no one chunkingit necessarily.
So anything could happen alongthe way, and so it's not as
(18:42):
secure from that perspective.
Scams, on the other hand, if youthink about it, we've done a
great job keeping people out.
So what the fronters have kindof shifted again to is well, let
me try and take advantage ofMike, the individual, right?
I don't have to break intoMike's account if I can get Mike
to log into his account and sendthe money out, right?
(19:03):
So this whole scam thing hascome about really, it's been
around, like I said, forever,but it's been much, I don't know
if you've noticed it, but youprobably at least get one or two
texts a day or several a weekthat are trying to get you to do
something, to click onsomething, right?
I got one yesterday.
I was gonna do a presentation,and I got it right before the
(19:24):
presentation.
And it was from a company that Ido have a relationship with, and
it is a financial company, andit was telling me that the new
account I had just set up wasready to be used.
Well, obviously, I didn't set upa new account, right?
They wanted me to click thatbutton because once I did that,
you know, like I didn't set upan account, right?
(19:45):
Then they would hopefully get mycredentials.
Now they would be into my intomy account and they could take
my money at that point, right?
So we've seen two things happen.
One where the fraudsters arecalling us or contacting us
saying, you know, there's anemergency, you need to send
money, you're gonna be arrested,Greg.
(20:05):
Greg, you're gonna be arrestedif you don't pay this money
that's outstanding, right?
Or hey, you didn't pay yourtaxes, there's gonna be a
warrant issued, you better payit.
And so, you know, people aredoing that.
And unfortunately, people aredoing that.
And then on the flip side, we'reseeing these events where it
says this account has beenopened in your name, you know,
(20:26):
confirm it, or your package hasbeen delayed, click on this to
make sure, you know, when it'scoming, and you start to give up
credentials.
So the fraudsters have reallytaken advantage of that.
And so what we we heard is wereally need to do something
about.
And so, similarly to checkfraud, we built out these
toolkits and we're trying tofocus on things like the types
of scams, the phishing andsocial engineering component to
(20:50):
that, because we all use ourphones nonstop, right?
We're looking also at businessemail compromise, which, if if
you remember, I said that's whatkind of got me into fraud 15
years ago.
I said, It's still growingtoday, right?
So it's still a big thing.
And and so it's not justconsumers that are being
impacted, businesses are beingimpacted as well.
So they're so they're trying todeal with that.
(21:12):
So we're we're trying to takeall that into consideration.
Similarly, we're putting it, youknow, the toolkit consists of
case studies, use cases,real-world examples, to try and
illustrate how they operate, howthe fraudsters are uh criminals
are operating, and how they canbe counted and mitigated as
well.
So it's long-winded, but we puta lot of time and energy into
(21:32):
it, and I think we're gettingsome of the benefit back.
And uh I've been speaking at afew conferences, and every time
I show this to people, they'relike, I see them with the
cameras taking pictures, and I'mlike, look, I'll give you the
link.
Okay, no worries, it's free,right?
But but I see a lot of interestin people taking pictures and
and trying to make sure they getto this.
And then, you know, when they'reout there, we are also saying,
(21:55):
hey, if there's a case orsomething that you're interested
in in the future, let us know.
We'll see about how we can beable to incorporate it in.
SPEAKER_00 (22:02):
Well, all those things you mentioned have
happened to me, right?
On the personal side on myphone.
I get, you know, with mybusiness, I probably get two
emails a day that are scams ofsome sort where they want me to
click on something, you know,you opened this account or you
know, whatever it may be, I getthem all the time.
Or your invoice won't be paidunless you press this button,
you know, so all those kind ofthings.
(22:23):
I see it all the time.
And that information, you know,I think something important is
hiring of that information.
So sharing it about scams, fraudtactics, emerging trends, it's
an industry challenge, right,that we all face.
So what more do you think we cando as an industry to sort of
collaborate in this area?
And then how would greatertransparency really make a
(22:46):
difference?
SPEAKER_01 (22:46):
Yeah, it's a great question.
I mentioned to you a second agoother countries are doing some
they do information sharing whenit comes to fraud, but they also
have a very differentinfrastructure.
And like I said, they have afew, it's much easier to share
information between 10 banksthan it is, you know, let's
round it up, 10,000 banks,right?
It's just a very differentenvironment.
(23:07):
Not only that, a lot of timessome of the other countries,
their government is mandatingthat they have to do some of
that, right?
If you think about ourenvironment, we're very
different in that not only do wehave a federal government, but
we have governments in 50states.
And there's privacy rules across50 different states.
I'm not saying there's 50different versions, but they're
(23:27):
different.
And so it's not it's not assimple in the United States to
just say, hey, we want everyoneto share our information because
we're very our structure is verydifferent.
I do personally believe that thesharing of information is
critical in the success for usto to fight against the the
fraudsters and criminals, butthe reality is they are sharing.
(23:50):
They don't have a problemsharing, Greg.
They boast about it, in fact.
They'll put YouTube videos upshowing people how they did it,
right?
And look, it used to be that wewould say, go to the dark web
and you can learn this or youcan buy this information.
You don't even have to go downto the dark web now.
There are videos on otherplatforms that that you can get
(24:11):
to without going it, being uh uhyou know, technically savvy
trying to search and find it.
So if they're sharing andthey're saying, hey, this scam
is working really well, they geton it in a hurry.
What we're not doing is we'renot saying, oh, they're hurting
us with this scam, and we shouldtell everybody so that they
(24:32):
can't hurt us.
And so, in my opinion, it'scritical that we try to get to
that in that end state.
A year ago, I had a work groupmade up of 30 different
organizations from the US, andwe actually spent time coming up
with, we wrote a paper basicallyon what the recommendations we
had for an information sharingtype platform.
(24:55):
And there's other folks outthere doing the same thing in
the country, trying to figureout how we can do this, how can
we build uh some type ofinfrastructure where we could
share information?
You know, it doesn't have to bea centralized database.
There's lots of differentsharing.
There's a lot of different waysyou can crack this, but there's
a way that we can share.
I talk, it's interesting becauseI talked to a lot of smaller
(25:17):
banks at these smallerconferences, and I always ask
them, are you sharinginformation?
And they, you know, people tendto think about tech technology
and how are you doing.
I said, and I and I literallystopped them and I said, Do you
have a call once a month withyour peers in the in the state
or in the region?
And surprisingly, a lot of handsgo up, and they they are.
(25:40):
So people at the grassrootslevel are doing what they need
to try and help themselves, butwhat we what we're not
successful in is how do youspread that across the whole
country, right?
And so I'm optimistic that we'removing in that right direction.
You mentioned that you said theword transparency, and I do
think collaboration is onecomponent of this, and
(26:00):
transparency is the other.
And those are essential for usto effectively combat scams and
fraud.
You know, we need to be able tobuild better partnerships across
the industry, partnerships,relationships, whatever you want
to say.
But it needs to be, we need toinclude groups like the
financial institutions, lawenforcement, regulatory bodies,
(26:23):
and then social media, telecoms.
You know, some of the othercountries are trying to pull in
telecoms and social mediabecause we were just saying it.
You get it on your phone device,right?
There's a message that comes in.
So it's part of it.
That's where it, that's where itcould start and then ultimately
end up in the in the scam.
So so I think that's all veryimportant, but I do think it's
(26:45):
great that there are you knowsome smaller groups out there,
grassroots, little banks pullingthemselves together and saying,
let's share information.
I do think it would be great ifwe could get into some
industry-wide type forums at theminimum.
So not everything has to be atechnology solution.
There can be forums and you knowthings of that nature where
maybe we can, and I'm justsorry, I was thinking about your
(27:07):
podcast.
I'm like, you know, maybethere's information like that
kind of thing that getsdispensed, but I don't know.
I can't jump there right now.
But uh the reality is how do youshare the information to other
folks in a way that iseffective?
Technology is definitely a wayto do that.
Technology is one that can helpus get around some of the
challenges of privacy rules,right?
(27:30):
So today, if you think about theother thing that happens in
fraud, is there's a lot of databreaches, right?
Fraudsters like data breachesbecause they get information,
right?
You've probably, Greg, in thelast year or so gotten a notice
that probably said some of yourdata has been been exposed
somewhere, right?
I have multiple.
(27:51):
And so, you know, our data isout there and the bad guys are
sharing that and using it.
So we can't just rely on thesecurity around there.
But if we can use othertechnology to try and protect
our information, we don't needto share everything about Greg,
right?
We just need to share.
We can if we share the patternof the fraud or the scam or the
(28:13):
insights, we don't necessarilyhave to share the personal
information, right?
And so there's ways to do that.
You know, it's like one of thosegames where you have to get
someone to understand whatyou're talking about without
actually saying the word.
I think that's where we are.
We got to be able to get themessage from me to you without
actually giving the details ofthe individuals involved, right?
(28:36):
So I think there's a way to doit.
It just will take some time.
But there are some technologiesout there that are
privacy-enhancing technologiesthat can encrypt information,
can make it safer to shareinformation.
So my gut feel is over the nextcouple of years, we're gonna see
some of that probably move inthat direction.
(28:57):
Other countries are definitelymoving more to the transparency
of sharing this information.
So, how do we get the US there?
And so before I retire, Greg, Iwould like to see that we are
making progress in left front.
SPEAKER_00 (29:11):
Well, let's let's hope that happens for sure.
So, with the popularity of AIand with all the value that it
can provide, there's also anegative side, and the criminals
are taking advantage of thatevery day.
What are your thoughts on AI andother technologies related to
scams and fraud?
What more can we be doing as anindustry?
SPEAKER_01 (29:30):
Yeah, so first of all, I like I like AI.
You know, I started using it awhile back, and I I I think it's
great.
And I'm glad that myorganization is now allowing us
to use it internally and stufftoo, right?
I think the challenge with AI,you're absolutely right.
It's got a lot of greatbenefits, and it's not new.
I've been with the Fed sevenyears, and just before I left my
(29:54):
my previous organization, wewere implementing models at that
point in time, you know.
Fraud to help identify fraud.
I'm sure they're so much betternow than they were seven years
ago.
But nonetheless, we were doingthat.
And we realized that at thatpoint in time that static type
rules to identify fraudulentanomalies are great, but they
(30:16):
don't have the flexibilityaround some of the AI, right?
And so I think the bonus is thatAI can help us look at the
numbers of transactions becauseyou've got to remember payment
transactions have gone way uptoo, right?
So to be able to look at moretransactions quicker to look for
anomalous activity is fantastic.
There's a very upside in my mindof us evolving the technology
(30:39):
and the tools that are there totry and stop fraud.
But to your point, the negativeside of it is the fraudsters are
they are pretty much the firstadopters of this type of
technology, right?
I mentioned my organization nowuses it, allows us to use it,
but it took a while to getthere, Greg.
It wasn't like day one theysaid, hey, everyone can use it.
There was a whole evaluation.
(31:00):
Are we secure?
Is it, you know, is it vetted?
Does it do all these things?
But if I'm a criminal, Inecessarily care about some of
that, right?
I just go right ahead and and doit and see what kind of benefit
I get out of it.
If it doesn't work, I'll findsomething else.
And so the challenge, you know,if you think about that, is
(31:21):
they're finding fraud oftentimesis reactive and it's hard,
right?
So I think the AI really allowsus to be much faster in what we
do.
But I'm I have this feelingwe're always playing catch up to
to the bad guys.
And maybe we're paying catch upand the the gap is becoming
less.
And if if that happens, I thinkthat's a positive for us.
(31:45):
Because anytime you can at leastshorten that that gap, it means
we're doing something right.
And you know, there's definitelya better chance to retrieve
funds and stop things if you canclose that window down a little
bit.
So I do think that the toolswill continue to evolve.
Look, we where have we gone inthe last year and a half with
(32:06):
with some of the AI tools we'reusing?
It seems like we just they justcame out and now everyone's
using it, right?
And so I think we'll see more ofthat.
I'm optimistic that the newAI-driven solutions will be
there.
And going back to the previousquestion, Greg, I think we're
going to be able to use that forinformation sharing in some form
(32:27):
or fashion to do it in a waythat we can share our findings,
that ultimately that will allowus to lead to better fraud
prevention solutions.
Right.
So I think I think the modelswill be better, the response
times will be better, but Ithink we'll just have to keep
pounding away at it and keeptrying to evolve because the
(32:48):
criminals aren't going to stop,is the problem, right?
And as I think uh earlier on Imentioned that you know the
banks have done a great job oftrying to keep bad guys out.
So what did they do?
They found another way.
They went to checks and scamps.
We're gonna do a great job doingsome of this other stuff, and
they're gonna be like water, andthey're gonna find the way
around it, right?
And so we can never let ourguard down, is what it's gonna
(33:10):
boil down to.
No matter how good we get,they're gonna find something
that we're gonna have to try andaddress.
SPEAKER_00 (33:16):
Yeah, absolutely.
So, Mike, one last question foryou.
What is the one takeaway you'dlike our listeners to come away
with from this episode whenthey're thinking about, you
know, scams and fraud?
SPEAKER_01 (33:27):
Well, one is always hard, right?
SPEAKER_00 (33:30):
Okay, three's okay then.
SPEAKER_01 (33:31):
Yeah, so let me let me say I think the importance of
being vigilant when it comes tofraud is is important.
I also think that fraud is notjust my job as a fraud person,
it's your job and it's the nextperson's job.
It's every within anorganization, it's everyone's
job, all right?
(33:52):
Because like if I am the frauddepartment, I personally think I
should be letting other peoplein the in the in the business
know what are things that canhappen so that they're aware.
And it might help them in theirpersonal life, but it might help
them in our business as well.
If they know, like if all of asudden they know that it could
protect them, right?
There's a reason why we all getkind of trained within our
(34:12):
organizations to look forfishing and things like that.
But I think that's that helpsbuild us the knowledge base, but
then we also have to be vigilantin knowing that it could happen
at any point in time, right?
So that's that's my one thing.
The second one is thecontinuation of learning and
education and understanding thatwe can't just learn it today and
(34:37):
expect that's the way it is.
The frosters are evolving andadapting, and so we have to
continue.
It's a continuous process, Iguess is what I'm getting at.
So we need to think about oursecurity protocols.
We need to think about how do welearn, how do we stay abreast of
new fraud preventiontechnologies, new fraud schemes
(34:57):
and scams.
How do we bring all that aroundso that we we don't fall behind?
Right?
We're making a lot of goodprogress, but we got to continue
to keep doing it.
The last thing I would say goesback to your question about,
well, you kind of asked thesequestions was collaboration and
information sharing.
And I honestly think if there'san opportunity for you, even if
(35:18):
it's within your organization,as a small ecosystem or within
your city or your state, to tryand collaborate with people and
share what's going on.
Again, you don't have to sayMike Kimmy's the criminal, but
you might be saying, hey, we seethis type of activity.
Are you seeing that?
(35:39):
If they say no, then you go, oh,well, you might be interested
because this is how they'reoperating.
Yeah, even if you just tell theperson about how the scam is
happening, it helps them.
They just learned something.
And so going back to that, so Ithink the vigilance and
education is one of them.
I think the staying on top ofnew trends and things out there
(36:01):
is important.
And then the collaboration andfrom sharing would be my third
one.
If you ask me, and this is maybewhat you did ask me, if you
said, Mike, if you had the magicwand, because sometimes my
question comes up, my answer tothat question would be that we
would have an inf informationsharing model of some sort that
allowed us to real-time shareproductivity.
(36:23):
So that was a different answerto a different question.
I know you didn't answer it, askit, but I gave you an answer
anyway.
SPEAKER_00 (36:30):
No, it's great.
I I and I think you know what, Ithink that's a great way to wrap
up the show.
So, Mike, thank you so much forbeing here.
I know your time is veryvaluable, so I really appreciate
you doing the show today.
SPEAKER_01 (36:39):
Thank you very much for the opportunity to talk
about the work that we're tryingto do with the Fed.
And it's been a pleasure.
Nice meeting you, Greg, and uhI'll be listening.
SPEAKER_00 (36:47):
Okay, great.
Thank you so much.
And to all you listeners outthere, I thank you for your time
as well.
And until the next story.
Welcome to the Signal Federal Powered by the
Leaders in Payments Podcast,where we are cutting through the
noise to reveal what trulymatters in payments and
fintechs.
SPEAKER_00 (00:22):
So, Mike, thank you so much for being here and
welcome to the show.
SPEAKER_01 (00:26):
Happy to be here.
Expect to be here.
SPEAKER_00 (00:28):
Great, thanks.
This episode is part of ourtechnical series where we're
cutting through the noise toreveal what truly matters in
payments and tech.
The Federal Trade Commissiondata shows that consumers
reported losing more than$12.5billion in fraud in 2024, which
was a 25% increase over 2023.
That's on the consumer side.
(00:48):
And half of all businessesglobally report to have been
affected by fraud.
So you know more than I do,Mike.
Fraud and scams are a hugechallenge across payments in
fintech.
And that's what we're going tobe diving into today.
So before we get into the meatof the conversation, can you
give us a quick snapshot of yourpersonal background, maybe where
you grew up, where you call hometoday, a few things like that?
SPEAKER_01 (01:08):
Absolutely.
And interestingly enough, I washaving this conversation with
some folks the other night at adinner event.
I was traveling and they werelike, oh, I didn't know that.
I didn't know that.
And so I've got kind of a weird,you know, a travel background.
I originally, my parents areimmigrants to the United States.
So I'm a first generationAmerican.
(01:29):
I was born in Philadelphia, butreally never lived in
Philadelphia.
My parents, after I was born,went back to their home country,
which was Ireland.
So I actually grew up in Irelanduntil I was about 11 years old.
And so that was my, I know Idon't have an accent when I came
back across.
I had a very strong accent.
But uh yeah, so I grew up inIreland.
(01:50):
And if you know the history ofthe troubles in Ireland, my
parents ultimately, when we werein the midst of that, decided it
was time to leave.
And my uncle had actually movedto Canada.
So my parents then, instead ofimmigrating back to the US, they
went to Canada this time.
And so then my formative teenageyears, high school, all that,
and for and college, wereactually in Canada originally.
(02:11):
And so I went to college,surprisingly, for architecture.
I had graduated and I wasworking with an architect in
Toronto and you know, realizedthat I needed more education in
that space if I really wanted todo that forever.
And I started looking to the USbecause I had citizenship,
because I was born in the UnitedStates.
(02:32):
And so I decided I didn't wantto be in the cold winter area.
So I was like moving southsomewhere.
And uh, North Carolina at thetime had a very good
architecture program.
And my boss at the time knewabout it and said, hey, you
should look there.
So I ended up coming toCharlotte to be an architect.
And I got into the program, thearchitecture program, and uh,
(02:55):
but at that time I realized Ijust didn't have the artistic
flair for architecture.
I had the linear, you know,science brain, math and science
brain.
So I would have been a greatengineer, but you know, we
didn't have the internet backthen, so I couldn't just search
for all this stuff to figure itout.
So I was already accepted at theschool, so I just decided I'd
get into business.
(03:15):
That got me into the that sideof it.
So I ultimately ditchedarchitecture and became uh got
into business.
SPEAKER_00 (03:23):
Okay.
Can you walk us through yourprofessional journey and how you
got to the Federal Reserve?
SPEAKER_01 (03:28):
Absolutely.
So the first time I went tocollege for architecture, they
had a the program I was in was aco-op program.
And so, you know, you obviouslyhad to work while you're going
to school.
So I was in college for businessand I was like, they have a
co-op program here.
I was actually paying forcollege and working for an
architect here in Charlotte aswell, because I had the you know
the background.
But then I went to the co-opoffice and they they said, Yeah,
(03:50):
you know, we've got this gig atuh Bank of America.
Would you like to work at Bankof America?
They're headquartered inCharlotte, makes sense.
So I I did that for a couple ofsemesters while I was going to
school.
And when I was graduating, thebank, I was working in the
international, what was calledthe international department
back then, and they wanted tobring me on board and put me in
(04:11):
a management program.
And so I was like, yeah, thatsounds great.
So I joined to be in this new,they they created it for me,
this management program torotate me through the different
components of the internationalbanking world.
And so I started learning, youknow, different things,
correspondent banking, I learnedthings in trade finance.
(04:32):
I actually worked in the financegroup for a bit and they moved
me around.
I learned a lot of things.
And then ultimately I got intosome asset back financing, you
know, that the US government didand things like that.
And so I started learning abunch of that, and I really
enjoyed it.
And so, you know, like youmentioned that you work for a
bank, Greg, and you kind of getopportunities to do different
(04:54):
things over time.
And so, like you, my backgroundwas in payments.
So I ultimately ended up in theworld of ACH, wire, check, all
of that, not from an operationalperspective, but more for the
commercial clients, helping themdevelop our products and evolve
the online presence and all thatsort of thing, the tools to help
(05:16):
them do their treasurymanagement.
And so I did that for a good,you know, 15 years, probably,
like in some form or fashion,moving around in different
roles.
And then right around, I thinksomewhere probably around 2008,
maybe, if you remember that,that was when some of the very
first data breaches werestarting to happen, you know,
(05:36):
the Target and the Home Depotand things like that.
And our organization startedseeing some of our customers
fall victim to being scammed inthe business email compromise
and sending and sending moneyoverseas.
And so we had a large retailfraud group, but we really
didn't have a commercial fraudgroup.
So that got created.
(05:57):
And who became my boss went tosome folks in the payments world
and said, Hey, I'm looking forsomeone in those payments that
would be interested in learningabout fraud.
And they knew I was looking foranother change.
It was that time, you know.
I'd been doing a job for a fewyears, and I was like, I really
wasn't enjoying it as much.
And they said, Do you want doyou want to learn something
about fraud?
(06:17):
And it was like a lifeline.
And I said, sure, I'll I'll giveit a shot.
And since then I've been doingthat.
So 2008, I got into fraud, Ilearned a lot.
I worked in fraud for wires,ACH, and uh mostly.
I worked in it at the good timewhen Wires and ACH would shut
(06:38):
down on Friday afternoon orFriday evening and didn't come
up till Sunday night, right?
So no fraud happened over theweekend, so you could actually
have a have a weekend in thefraud world.
But then uh, you know, then theyI guess I was doing a good job
and they said, Hey, we want youto take on commercial card.
And that's a whole differentballgame.
That's 247, 365, right?
(06:58):
And uh, so I again learnedsomething brand new, the card
business, love the cardbusiness, and then the fraud
that happened in that space.
And then one day I I literallygot a call from a recruiter,
which you know happens over yourcareer, and usually you can
delete them.
And this one said they were withthe Federal Reserve.
And I was like, oh, what's that?
You know, so I listened to itand uh and I actually called it
(07:21):
back, and um it sounded like agood opportunity.
So I started the process ofinterviewing with the Fed.
And let me tell you, that wasnot a fast process.
It took six months for me toactually get on boarded.
I think we started in Septemberof 2018, and I went came on
board in March of 2019.
You know, that was that was goodanyway, I think.
(07:43):
So now I've been with the Fedalmost seven years, and uh I
really enjoy it.
It's a different perspectivethan being on the banking side
for so long.
And uh I run a team now that'sfocused on you mentioned it,
payment system improvement uhand secure payments within that,
and we're focused on fraud andsecurity.
Yeah, that's what got me there.
I know, along with his story.
(08:04):
But it's uh like all of us, welearn as we go along and we
start to find the things welike.
You know, the the boss at thetime, I think he he was smart
saying that it's easier to teachsomeone about fraud than his
payments, because it it takes along time.
You've been in payments, ittakes a long time to learn the
intricacies of not just domesticpayments, but then you get into
(08:28):
international payments and thatsort of thing.
So that has been a great levelset or foundation for me, you
know, to learn fraud was mucheasier.
SPEAKER_00 (08:38):
Okay, well, thanks.
It's very interesting, both thethe personal story and and the
professional journey.
Very interesting.
So let's go ahead and and diveinto the topic for today's
conversation.
And let's talk about, if youdon't mind, talk about payment
security at a high level.
Let's start at the high leveland then sort of what role does
the Federal Reserve play inthat?
SPEAKER_01 (08:58):
All right, so it's a it's a great question.
That was part of the reason Iwanted to join the Fed, because
you know, the Fed does play acrucial role in ensuring the
security of the payment systemand definitely is it's a
critical role because we need tohave people to believe and
understand that it is a securepayment network we have in the
(09:20):
United States and that they cantrust the network.
So when if I'm gonna pay you,Greg, that the money's gonna get
there and I don't have to worryabout it, that sort of thing.
And we know that it's gonna getthere.
It's you know, even aside fromfraud, it's gonna be reliant and
trustworthy and all that sort ofthing.
So that's one component of it.
On the other side of it, thesecurity of it is super
(09:41):
important, right?
And so what my team does isreally try to ensure that we are
trying to address the problemsof the industry from when it
comes to fraud security.
You know, there are people thatfocus on cyber and the CI CISOs
and that within organizations.
That's not what we do.
We're really focused on thatsafety and security of the
(10:01):
payment system and trying totrying to work through with the
industry very collaborativelywhat are the problems out there,
identify those, and then isthere something we can work on
together to try and solve those?
One of the things that we do alot though, other than
collaboration, is aroundeducational components.
We develop a lot of materials totry and help people understand
(10:23):
fraud.
The United States is quiteunique in our structure, our
financial structure.
I was just on a call prior tothis, and and we were talking
about other countries, and theywere talking about some of the
things they're doing from fraud.
And it's a little bit easier insome other countries because
they don't have thousands offinancial institutions.
They have 10 financialinstitutions or something,
(10:46):
right?
And so so when you start tothink about you only have to
work with 10 players versus10,000 players, right?
So it's a very differentinfrastructure we have.
So it creates this uniqueenvironment that we're in.
The other thing that my teamtries to do, and I think we do
well, is build relationshipswith people in the industry.
And we we are often out therespeaking at events, trying to,
(11:10):
and when I say speaking, we'reeither participating in the
panel or we're trying to educatepeople around specific topics,
and we get very good feedback onthat.
I think people really appreciatethat you know, we're there
working with them to try andsolve some of this.
And then, you know, webinars andmaterials that people can use,
especially, you know, it feelsgreat when people come up to me
(11:30):
at a conference or after I'vedone a speaking engagement and
they tell me, hey, I I love thatthis material you guys are
putting out.
Can you know, because we look,if it's helping them, that's
great, right?
That's what I at the end of theday.
We want people to make sure thatthey feel good about it.
And then if you think about theway the structure of the banks
are in the US, it's almost likea pyramid, right?
(11:52):
The top, there's a few banks,and then you get down and you
get to community banks andcredit unions, there's a lot of
them at the bottom.
So it's a very pyramid-shaped.
And and those banks at thebottom don't just don't have the
resources a lot of the times tobuild their own material.
So when we can provide it forthem, I think it makes their
life a bit easier.
That's pretty much what we do.
I would say the hot topics, wetry to stay engaged with what's
(12:16):
going on.
So another key component for usis just to stay aware of the
fraud landscape.
What's going on?
What are the hot topics?
Who are the players that aredoing something about it?
You know, as the Fed, we can'trecommend the you know tools and
solutions for folks, but we wantto make sure we understand them,
right?
Because we can ultimately talkto those folks and see how there
might be ways to help theindustry in general.
SPEAKER_00 (12:38):
Okay.
Well, let's talk about some ofthose educational things you've
done.
And in 2025, you released twoonline toolkits, the Scams
mitigation toolkit and the checkfraud mitigation toolkit, to you
know, really help educate theindustry about payments fraud,
what you were just talkingabout, and different ways to
detect it and mitigate it.
So can you speak to both ofthem, like why you created them
(12:58):
and exactly what they are?
SPEAKER_01 (12:59):
Yeah.
So the these toolkits were indirect uh response to the
industry.
So that I'll start there.
The first one is two things arehappening.
Two of the hottest trends thatare happening in fraud are check
fraud and scams.
And, you know, when you thinkabout it, some people may not
(13:20):
realize how big check fraud isin the United States.
Because remember, Greg, we'reall we're not we're not writing
checks anymore.
Checks are going away, andchecks are old school, right?
So, you know, I don't know ifyou have kids or not, but your
kids probably aren't writingchecks.
My kids are not writing checks.
So it's it's something when, youknow, in fact, other countries
think it's kind of strange thatwe're having this kind of
(13:41):
environment, you know, becausethey don't do checks, right?
So specifically on the check,I'll start with the check one if
that's all right.
So it's a significant problemthat we're still dealing with,
despite the growth of digitalpayments, which we saw a huge
upward trend in digital paymentswhen the pandemic came around,
right?
So so we've seen this big shiftin digital payments, and so you
would expect that we would theindustry is more focused on that
(14:02):
because there's huge growth, yougot to stay up on it.
It's technical technology has tobe implemented quickly to be
able to address it, all thatsort of thing, right?
It's very much like when we wentto the pandemic, all of a sudden
we had to have Zoom and Teamsand all these things that we
didn't have before.
So now these payments are goingand they had to do the same
thing.
Check usage has droppeddramatically.
(14:23):
So from the consumerperspective, we're probably
writing less checks, but thebusinesses are still writing
checks.
So there's still a lot of checksbeing processed in the country
in the billions, likemulti-billions.
But there's also multi-billiondollars in check fraud.
And so that's a to the pointwhere check fraud actually grew
to the highest it's ever been,even though the checks were
going down.
(14:43):
So check fraud up, check usagegoing down.
So that's not a good scenariobecause in my mind really says
that the cost of check fraud is,you know, for each check is
going upwards, right?
And so that that's a challenge.
For check processing, a lot ofthe smaller banks still do a lot
of that thing manually, right?
And so if you think about nowthey've got fraud, they've got
(15:07):
to be even more careful aboutthe items that they're trying to
process.
And so it can be devastating forthem from a check fraud loss
perspective.
So we were hearing that can youdo something about check fraud
education?
I mentioned my kids, right?
If one of my kids happened whenthey graduated college, if they
had gotten a job at a bank as abranch, you know, as a teller or
(15:28):
something, they would have hadto teach them about checks
because they don't know what acheck is, right?
So literally, when I talk tobanks today and they're hiring
people for the tellers, they'rehaving to teach them about
checks because they don't, youknow, they don't use them.
So think about that.
It's a little bit of a differentdynamic.
And so what we're trying to dois create some materials that
(15:50):
can help them in that.
It's not just to help themtrain.
I think the benefit is that theycan train their folks with it,
but it's also built in a waythat we're trying to use it from
there's examples.
It'll show you what a fitcounterfeit item might look
like.
It might show you what uh whatan altered item might look like.
Trying to think what else?
You know, what are the thingsyou should be looking for?
(16:11):
Even talks about some of theservices that could be
available.
Like again, we we are not goingto recommend the provider, but
like things like positive pay orpay positive pay are tools that
you can use that thatorganizations can use to try and
identify checks as the fraudule,right?
And uh so there's some of that.
But we get into you know, whatare the latest trucks and uh
(16:33):
trends in check fraud and thentips on identifying and
mitigating those?
Because ultimately at the end ofthe day, the goal is to try and
prevent it.
But if it's gonna happen, thenthere's got to be ways for you
to mitigate it, right?
Or you know, to take take thehit out of it or the pain out of
it.
So that's what we're doingthere.
So again, it's an old problem.
(16:53):
Check is an old problem, butwe're getting a lot of feedback
on these toolkits.
So I just mentioned to somebodythis morning that our those the
websites where we have thesetoolkits are our number one and
number two most hit over thelast couple of months.
So there's a lot of people goingthere, which is great.
I'm I'm excited to say thatpeople are actually using them.
(17:15):
We just put new material out onboth of them mid-October.
So just a couple of weeks ago.
We first released them in May,but now we added more material,
and we'll continue to do that.
We're getting feedback frompeople.
Now that they're starting todeuse them, you tend to get,
hey, what about this or whatabout that?
And so we're trying to do it invery consumable pieces of
information.
(17:36):
You don't have to read a whitepaper to learn about check
fraud.
We can give you an example or avideo or you know, small
examples, things like thatversus having to read a book,
right?
That's we all don't have time tobe reading a book.
So this is why we've designedthem this way.
The other one, scams, scams havebeen around forever, right?
And and it's nothing new.
(17:57):
But what's happened is we'veseen a surge in scams as well.
And I and I would say there's acouple of reasons for that.
And the same for the growth incheck fraud.
I think the root some of thereasons around it is the banks
with digital payments have donea great job trying to keep the
bad guys out and try to make thepayments safe and secure.
So if you think about it from acheck fraud perspective,
(18:20):
everyone was investing indigital technology and fraud
solutions, maybe didn't do asmuch but checks because they're
supposed to be going away.
And it's also a paper item,right?
So it's not secure.
When you put a check in themail, you have no idea how many
people touch it before it getsto meet, right?
And so there's no one chunkingit necessarily.
So anything could happen alongthe way, and so it's not as
(18:42):
secure from that perspective.
Scams, on the other hand, if youthink about it, we've done a
great job keeping people out.
So what the fronters have kindof shifted again to is well, let
me try and take advantage ofMike, the individual, right?
I don't have to break intoMike's account if I can get Mike
to log into his account and sendthe money out, right?
(19:03):
So this whole scam thing hascome about really, it's been
around, like I said, forever,but it's been much, I don't know
if you've noticed it, but youprobably at least get one or two
texts a day or several a weekthat are trying to get you to do
something, to click onsomething, right?
I got one yesterday.
I was gonna do a presentation,and I got it right before the
(19:24):
presentation.
And it was from a company that Ido have a relationship with, and
it is a financial company, andit was telling me that the new
account I had just set up wasready to be used.
Well, obviously, I didn't set upa new account, right?
They wanted me to click thatbutton because once I did that,
you know, like I didn't set upan account, right?
(19:45):
Then they would hopefully get mycredentials.
Now they would be into my intomy account and they could take
my money at that point, right?
So we've seen two things happen.
One where the fraudsters arecalling us or contacting us
saying, you know, there's anemergency, you need to send
money, you're gonna be arrested,Greg.
(20:05):
Greg, you're gonna be arrestedif you don't pay this money
that's outstanding, right?
Or hey, you didn't pay yourtaxes, there's gonna be a
warrant issued, you better payit.
And so, you know, people aredoing that.
And unfortunately, people aredoing that.
And then on the flip side, we'reseeing these events where it
says this account has beenopened in your name, you know,
(20:26):
confirm it, or your package hasbeen delayed, click on this to
make sure, you know, when it'scoming, and you start to give up
credentials.
So the fraudsters have reallytaken advantage of that.
And so what we we heard is wereally need to do something
about.
And so, similarly to checkfraud, we built out these
toolkits and we're trying tofocus on things like the types
of scams, the phishing andsocial engineering component to
(20:50):
that, because we all use ourphones nonstop, right?
We're looking also at businessemail compromise, which, if if
you remember, I said that's whatkind of got me into fraud 15
years ago.
I said, It's still growingtoday, right?
So it's still a big thing.
And and so it's not justconsumers that are being
impacted, businesses are beingimpacted as well.
So they're so they're trying todeal with that.
(21:12):
So we're we're trying to takeall that into consideration.
Similarly, we're putting it, youknow, the toolkit consists of
case studies, use cases,real-world examples, to try and
illustrate how they operate, howthe fraudsters are uh criminals
are operating, and how they canbe counted and mitigated as
well.
So it's long-winded, but we puta lot of time and energy into
(21:32):
it, and I think we're gettingsome of the benefit back.
And uh I've been speaking at afew conferences, and every time
I show this to people, they'relike, I see them with the
cameras taking pictures, and I'mlike, look, I'll give you the
link.
Okay, no worries, it's free,right?
But but I see a lot of interestin people taking pictures and
and trying to make sure they getto this.
And then, you know, when they'reout there, we are also saying,
(21:55):
hey, if there's a case orsomething that you're interested
in in the future, let us know.
We'll see about how we can beable to incorporate it in.
SPEAKER_00 (22:02):
Well, all those things you mentioned have
happened to me, right?
On the personal side on myphone.
I get, you know, with mybusiness, I probably get two
emails a day that are scams ofsome sort where they want me to
click on something, you know,you opened this account or you
know, whatever it may be, I getthem all the time.
Or your invoice won't be paidunless you press this button,
you know, so all those kind ofthings.
(22:23):
I see it all the time.
And that information, you know,I think something important is
hiring of that information.
So sharing it about scams, fraudtactics, emerging trends, it's
an industry challenge, right,that we all face.
So what more do you think we cando as an industry to sort of
collaborate in this area?
And then how would greatertransparency really make a
(22:46):
difference?
SPEAKER_01 (22:46):
Yeah, it's a great question.
I mentioned to you a second agoother countries are doing some
they do information sharing whenit comes to fraud, but they also
have a very differentinfrastructure.
And like I said, they have afew, it's much easier to share
information between 10 banksthan it is, you know, let's
round it up, 10,000 banks,right?
It's just a very differentenvironment.
(23:07):
Not only that, a lot of timessome of the other countries,
their government is mandatingthat they have to do some of
that, right?
If you think about ourenvironment, we're very
different in that not only do wehave a federal government, but
we have governments in 50states.
And there's privacy rules across50 different states.
I'm not saying there's 50different versions, but they're
(23:27):
different.
And so it's not it's not assimple in the United States to
just say, hey, we want everyoneto share our information because
we're very our structure is verydifferent.
I do personally believe that thesharing of information is
critical in the success for usto to fight against the the
fraudsters and criminals, butthe reality is they are sharing.
(23:50):
They don't have a problemsharing, Greg.
They boast about it, in fact.
They'll put YouTube videos upshowing people how they did it,
right?
And look, it used to be that wewould say, go to the dark web
and you can learn this or youcan buy this information.
You don't even have to go downto the dark web now.
There are videos on otherplatforms that that you can get
(24:11):
to without going it, being uh uhyou know, technically savvy
trying to search and find it.
So if they're sharing andthey're saying, hey, this scam
is working really well, they geton it in a hurry.
What we're not doing is we'renot saying, oh, they're hurting
us with this scam, and we shouldtell everybody so that they
(24:32):
can't hurt us.
And so, in my opinion, it'scritical that we try to get to
that in that end state.
A year ago, I had a work groupmade up of 30 different
organizations from the US, andwe actually spent time coming up
with, we wrote a paper basicallyon what the recommendations we
had for an information sharingtype platform.
(24:55):
And there's other folks outthere doing the same thing in
the country, trying to figureout how we can do this, how can
we build uh some type ofinfrastructure where we could
share information?
You know, it doesn't have to bea centralized database.
There's lots of differentsharing.
There's a lot of different waysyou can crack this, but there's
a way that we can share.
I talk, it's interesting becauseI talked to a lot of smaller
(25:17):
banks at these smallerconferences, and I always ask
them, are you sharinginformation?
And they, you know, people tendto think about tech technology
and how are you doing.
I said, and I and I literallystopped them and I said, Do you
have a call once a month withyour peers in the in the state
or in the region?
And surprisingly, a lot of handsgo up, and they they are.
(25:40):
So people at the grassrootslevel are doing what they need
to try and help themselves, butwhat we what we're not
successful in is how do youspread that across the whole
country, right?
And so I'm optimistic that we'removing in that right direction.
You mentioned that you said theword transparency, and I do
think collaboration is onecomponent of this, and
(26:00):
transparency is the other.
And those are essential for usto effectively combat scams and
fraud.
You know, we need to be able tobuild better partnerships across
the industry, partnerships,relationships, whatever you want
to say.
But it needs to be, we need toinclude groups like the
financial institutions, lawenforcement, regulatory bodies,
(26:23):
and then social media, telecoms.
You know, some of the othercountries are trying to pull in
telecoms and social mediabecause we were just saying it.
You get it on your phone device,right?
There's a message that comes in.
So it's part of it.
That's where it, that's where itcould start and then ultimately
end up in the in the scam.
So so I think that's all veryimportant, but I do think it's
(26:45):
great that there are you knowsome smaller groups out there,
grassroots, little banks pullingthemselves together and saying,
let's share information.
I do think it would be great ifwe could get into some
industry-wide type forums at theminimum.
So not everything has to be atechnology solution.
There can be forums and you knowthings of that nature where
maybe we can, and I'm justsorry, I was thinking about your
(27:07):
podcast.
I'm like, you know, maybethere's information like that
kind of thing that getsdispensed, but I don't know.
I can't jump there right now.
But uh the reality is how do youshare the information to other
folks in a way that iseffective?
Technology is definitely a wayto do that.
Technology is one that can helpus get around some of the
challenges of privacy rules,right?
(27:30):
So today, if you think about theother thing that happens in
fraud, is there's a lot of databreaches, right?
Fraudsters like data breachesbecause they get information,
right?
You've probably, Greg, in thelast year or so gotten a notice
that probably said some of yourdata has been been exposed
somewhere, right?
I have multiple.
(27:51):
And so, you know, our data isout there and the bad guys are
sharing that and using it.
So we can't just rely on thesecurity around there.
But if we can use othertechnology to try and protect
our information, we don't needto share everything about Greg,
right?
We just need to share.
We can if we share the patternof the fraud or the scam or the
(28:13):
insights, we don't necessarilyhave to share the personal
information, right?
And so there's ways to do that.
You know, it's like one of thosegames where you have to get
someone to understand whatyou're talking about without
actually saying the word.
I think that's where we are.
We got to be able to get themessage from me to you without
actually giving the details ofthe individuals involved, right?
(28:36):
So I think there's a way to doit.
It just will take some time.
But there are some technologiesout there that are
privacy-enhancing technologiesthat can encrypt information,
can make it safer to shareinformation.
So my gut feel is over the nextcouple of years, we're gonna see
some of that probably move inthat direction.
(28:57):
Other countries are definitelymoving more to the transparency
of sharing this information.
So, how do we get the US there?
And so before I retire, Greg, Iwould like to see that we are
making progress in left front.
SPEAKER_00 (29:11):
Well, let's let's hope that happens for sure.
So, with the popularity of AIand with all the value that it
can provide, there's also anegative side, and the criminals
are taking advantage of thatevery day.
What are your thoughts on AI andother technologies related to
scams and fraud?
What more can we be doing as anindustry?
SPEAKER_01 (29:30):
Yeah, so first of all, I like I like AI.
You know, I started using it awhile back, and I I I think it's
great.
And I'm glad that myorganization is now allowing us
to use it internally and stufftoo, right?
I think the challenge with AI,you're absolutely right.
It's got a lot of greatbenefits, and it's not new.
I've been with the Fed sevenyears, and just before I left my
(29:54):
my previous organization, wewere implementing models at that
point in time, you know.
Fraud to help identify fraud.
I'm sure they're so much betternow than they were seven years
ago.
But nonetheless, we were doingthat.
And we realized that at thatpoint in time that static type
rules to identify fraudulentanomalies are great, but they
(30:16):
don't have the flexibilityaround some of the AI, right?
And so I think the bonus is thatAI can help us look at the
numbers of transactions becauseyou've got to remember payment
transactions have gone way uptoo, right?
So to be able to look at moretransactions quicker to look for
anomalous activity is fantastic.
There's a very upside in my mindof us evolving the technology
(30:39):
and the tools that are there totry and stop fraud.
But to your point, the negativeside of it is the fraudsters are
they are pretty much the firstadopters of this type of
technology, right?
I mentioned my organization nowuses it, allows us to use it,
but it took a while to getthere, Greg.
It wasn't like day one theysaid, hey, everyone can use it.
There was a whole evaluation.
(31:00):
Are we secure?
Is it, you know, is it vetted?
Does it do all these things?
But if I'm a criminal, Inecessarily care about some of
that, right?
I just go right ahead and and doit and see what kind of benefit
I get out of it.
If it doesn't work, I'll findsomething else.
And so the challenge, you know,if you think about that, is
(31:21):
they're finding fraud oftentimesis reactive and it's hard,
right?
So I think the AI really allowsus to be much faster in what we
do.
But I'm I have this feelingwe're always playing catch up to
to the bad guys.
And maybe we're paying catch upand the the gap is becoming
less.
And if if that happens, I thinkthat's a positive for us.
(31:45):
Because anytime you can at leastshorten that that gap, it means
we're doing something right.
And you know, there's definitelya better chance to retrieve
funds and stop things if you canclose that window down a little
bit.
So I do think that the toolswill continue to evolve.
Look, we where have we gone inthe last year and a half with
(32:06):
with some of the AI tools we'reusing?
It seems like we just they justcame out and now everyone's
using it, right?
And so I think we'll see more ofthat.
I'm optimistic that the newAI-driven solutions will be
there.
And going back to the previousquestion, Greg, I think we're
going to be able to use that forinformation sharing in some form
(32:27):
or fashion to do it in a waythat we can share our findings,
that ultimately that will allowus to lead to better fraud
prevention solutions.
Right.
So I think I think the modelswill be better, the response
times will be better, but Ithink we'll just have to keep
pounding away at it and keeptrying to evolve because the
(32:48):
criminals aren't going to stop,is the problem, right?
And as I think uh earlier on Imentioned that you know the
banks have done a great job oftrying to keep bad guys out.
So what did they do?
They found another way.
They went to checks and scamps.
We're gonna do a great job doingsome of this other stuff, and
they're gonna be like water, andthey're gonna find the way
around it, right?
And so we can never let ourguard down, is what it's gonna
(33:10):
boil down to.
No matter how good we get,they're gonna find something
that we're gonna have to try andaddress.
SPEAKER_00 (33:16):
Yeah, absolutely.
So, Mike, one last question foryou.
What is the one takeaway you'dlike our listeners to come away
with from this episode whenthey're thinking about, you
know, scams and fraud?
SPEAKER_01 (33:27):
Well, one is always hard, right?
SPEAKER_00 (33:30):
Okay, three's okay then.
SPEAKER_01 (33:31):
Yeah, so let me let me say I think the importance of
being vigilant when it comes tofraud is is important.
I also think that fraud is notjust my job as a fraud person,
it's your job and it's the nextperson's job.
It's every within anorganization, it's everyone's
job, all right?
(33:52):
Because like if I am the frauddepartment, I personally think I
should be letting other peoplein the in the in the business
know what are things that canhappen so that they're aware.
And it might help them in theirpersonal life, but it might help
them in our business as well.
If they know, like if all of asudden they know that it could
protect them, right?
There's a reason why we all getkind of trained within our
(34:12):
organizations to look forfishing and things like that.
But I think that's that helpsbuild us the knowledge base, but
then we also have to be vigilantin knowing that it could happen
at any point in time, right?
So that's that's my one thing.
The second one is thecontinuation of learning and
education and understanding thatwe can't just learn it today and
(34:37):
expect that's the way it is.
The frosters are evolving andadapting, and so we have to
continue.
It's a continuous process, Iguess is what I'm getting at.
So we need to think about oursecurity protocols.
We need to think about how do welearn, how do we stay abreast of
new fraud preventiontechnologies, new fraud schemes
(34:57):
and scams.
How do we bring all that aroundso that we we don't fall behind?
Right?
We're making a lot of goodprogress, but we got to continue
to keep doing it.
The last thing I would say goesback to your question about,
well, you kind of asked thesequestions was collaboration and
information sharing.
And I honestly think if there'san opportunity for you, even if
(35:18):
it's within your organization,as a small ecosystem or within
your city or your state, to tryand collaborate with people and
share what's going on.
Again, you don't have to sayMike Kimmy's the criminal, but
you might be saying, hey, we seethis type of activity.
Are you seeing that?
(35:39):
If they say no, then you go, oh,well, you might be interested
because this is how they'reoperating.
Yeah, even if you just tell theperson about how the scam is
happening, it helps them.
They just learned something.
And so going back to that, so Ithink the vigilance and
education is one of them.
I think the staying on top ofnew trends and things out there
(36:01):
is important.
And then the collaboration andfrom sharing would be my third
one.
If you ask me, and this is maybewhat you did ask me, if you
said, Mike, if you had the magicwand, because sometimes my
question comes up, my answer tothat question would be that we
would have an inf informationsharing model of some sort that
allowed us to real-time shareproductivity.
(36:23):
So that was a different answerto a different question.
I know you didn't answer it, askit, but I gave you an answer
anyway.
SPEAKER_00 (36:30):
No, it's great.
I I and I think you know what, Ithink that's a great way to wrap
up the show.
So, Mike, thank you so much forbeing here.
I know your time is veryvaluable, so I really appreciate
you doing the show today.
SPEAKER_01 (36:39):
Thank you very much for the opportunity to talk
about the work that we're tryingto do with the Fed.
And it's been a pleasure.
Nice meeting you, Greg, and uhI'll be listening.
SPEAKER_00 (36:47):
Okay, great.
Thank you so much.
And to all you listeners outthere, I thank you for your time
as well.
And until the next story.
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