Latest / The BEYOND Podcast / Jessica Cath: A Financial Crime Expert on the New Fraud Playbook

Transcript

Jessica Cath: A Financial Crime Expert on the New Fraud Playbook · The BEYOND Podcast

• 0:00
  Unknown: Fraud now costs more than the global drug trade. It does indeed. You hunt the bad guys. The UK is
• 0:08
  a big hot spot. This is a big problem. Clearly, you've got half a million that is gone very,
• 0:14
  very quickly. Okay. Is it coming back? So, that's the interesting question. I am Jessica Cath and
• 0:21
  I head up the financial crime team at Thistle Initiatives and we help banks, fintexs, crypto
• 0:27
  firms to prevent financial crime. Young people don't often realize that you're doing something
• 0:31
  illegal. That's really scary. How should we visualize what's going on? Visualizing a scammer
• 0:38
  is very difficult because they could be anyone. Phone calls you will not get anymore. What are
• 0:42
  push payments? This is very difficult for banks to spot. What's the most convincing deep fake? At the
• 0:48
  moment, the most convincing deep fakes. 40% of our crime is fraud. 40%. The frameworks the government
• 0:56
  have set don't quite work. That's not good enough. We need more investment into policing. They've not
• 1:06
  put the mechanisms in place to protect people. Why haven't they? They haven't put it in place
• 1:10
  because they don't need to. Top three red flags for scamming. What would they be? The top three.
• 1:18
  Jessica, welcome to the podcast. So basically, you hunt the bad guys. I try my best. You hunt all of
• 1:27
  those guys that are phoning us, trying to steal money off our elderly parents, off our teenagers,
• 1:33
  and off us. Is that that's really what you do. You're going after them. It is indeed. We work
• 1:38
  with lots of the financial services firms to build the structures that really get to the
• 1:43
  heart of trying to stop money laundering, fraud, all of the different types of financial crime that
• 1:49
  we actually face on the ground. Okay, this is a big problem. Clearly, we're all all of us have
• 1:57
  experienced at some point someone trying to steal money off us or people that we love and know. Um,
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  in terms of countries that are most affected, which would those be? The UK is a big hot spot.
• 2:13
  Um, so if we're talking about fraud, we really are a kind of scam uh target for the world. I mean,
• 2:20
  even one member of my own team got scammed the other day. So even when you're in the
• 2:24
  anti-financial crime space, it can be really easy to fall foul to scams. Um, we have in the UK some
• 2:33
  real challenges for multiple different reasons. Uh, we have really good fast payments through
• 2:40
  some of our fintech players which are great and we love tapping for instant payments but it does mean
• 2:47
  that we are quite expo exposed to fraud. Um, and of course a lot of that money then goes overseas
• 2:53
  but in terms of the UK we then house a lot of the victims when it comes to fraud. Okay. So this is
• 2:59
  horrible. I don't I don't like this cuz I live in the UK. Okay. So, the UK is a hot spot. What about
• 3:03
  America? America is not so bad because they've got different types of payment flows. Uh so,
• 3:09
  coming to back to this point around the UK really being a hub for faster payments. Of course,
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  Europe has uh faster payment flows as well, but we really do have some exciting developments in
• 3:21
  terms of payments players which enable payments to move very very fast. We also have um a really
• 3:29
  good kind of crypto network as well which again is a bit of a hub when it comes to
• 3:34
  moving fraudulent funds. Um crypto of course in the US is becoming more prevalent because
• 3:41
  of Trump's love of crypto. Uh but until this point the regulatory frameworks have been tricky in the
• 3:47
  US. So the UK really is a bit of a hot spot when it comes to fraud. Okay. That's very disappointing
• 3:54
  to hear. I'm I'm disappointed. Uh but in terms of the cost, so I don't know if this is correct,
• 4:02
  so correct me if I'm wrong, that fraud now costs more than the global drug drug trade. Literally
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  more than the global drug trade. It does indeed. It does. And when we think I can't I can't believe
• 4:15
  that it's impo almost impossible to think about it. Um because when we think about crime, we
• 4:21
  think about drugs and that's when we think about money laundering. think about organized crime,
• 4:27
  but actually fraud is something that impacts people on the ground in the dayto-day. Another
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  statistic that's really interesting is that over 40% of all the crime in the UK, no matter
• 4:37
  what crime, is fraud. It's actual fraud. Do we think that the police are spending 40% of their
• 4:44
  money trying to prevent fraud? No. They're still focused on other things, you know, knife crime,
• 4:49
  etc., which of course is horrible, but fraud is really really impacting a lot of people on the
• 4:56
  ground. Like you said, most people know someone that has been impacted by fraud. 100%. So, what's
• 5:02
  the most audacious scam you've seen thus far? So, we've seen a couple of interesting ones. Um,
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  one that was a recent scam that actually happened to a client of ours was an absolute classic.
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  And uh this was a corporate entity receiving a fishing email that says, "I am your law firm." And
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  they were actually buying new office premises. Can you send me the deposit for your new premises? And
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  I think it was around half a million or something like that. And the uh executive assistant thought,
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  "Absolutely. This looks like an email coming from my boss. I'm going to make that payment
• 5:39
  as quick as possible so that we don't lose out on the purchase." And there we go.
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  you've got half a million that is gone very very quickly. Okay. Is it coming back? So that's the
• 5:49
  interesting question. Once the money has gone, it can be very very difficult to get that money back.
• 5:57
  Um we have been helping them because we do have obviously lots of connections and ways in which
• 6:03
  we can try and get money back and work with banks and different teams in order to try and expedite
• 6:09
  the process of getting that money back. But if it has already gone overseas or it's gone into
• 6:14
  crypto accounts, it's highly unlikely that you're going to get that money back. Um, and especially
• 6:21
  that amount is very very difficult to get back. Um, when we're talking about normal customer,
• 6:28
  so individual scams that are lower amounts than say the half a million, you are likely to get
• 6:34
  that back depending on the scam based on the reimbursement models. But for this customer,
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  it's a lot of money that is pretty much gone. Although we have managed to get some some of
• 6:44
  it back. I think about half. But I mean that can floor a business. It can definitely destroy your
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  your you know a person an individual it can that's all your life savings you know gone.
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  I mean prevention is for sure better than cure. And that's a classic scam for people. So people in
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  uh vulnerable life situations. So if you are making a house purchase, that is all your savings
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  usually that you're putting into that transaction. So if you are making a house purchase,
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  you're in a vulnerable position for attack from these very intelligent fraudsters. Absolutely.
• 7:19
  They're seeking you in a vulnerable financial state. And that's how we have to see it. Now,
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  um can you just explain what a fishing fishing email, that's how you say it,
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  is is for anyone that doesn't actually understand. Um, we have a lot of elderly
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  people watching too that just wouldn't know what that means. How do you identify one? Yes,
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  it's fishing with a ph instead of an F. Um, so a fishing email is basically a social engineering
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  craft where somebody has crafted that email to look like it's coming from a legitimate source.
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  Um, so in this case it was crafted to look like it was coming from the law firm to the CEO and
• 8:00
  then to the CEO to the executive assistant. So it looked like a full trail of emails that it looked
• 8:07
  legitimate. It had the law firm's signature at the bottom of the email. It had the CEO's signature.
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  And all of these different fishing emails or messages can be crafted quite closely and can be
• 8:20
  very difficult to spot particularly when they're using things like AI to help craft and shape the
• 8:25
  messages in these emails. Wow. They're using AI. Okay. So, they're getting away with it. Clearly,
• 8:31
  at least even that you got half the money back. The other half they've got away with. Why are
• 8:34
  they getting away with it? There are multiple reasons why they're getting away with it. Um,
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  one, there isn't enough resources in policing. So trying to actually get the money back through
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  policing is very very difficult. Two, it's very difficult for for banks uh financial institutions
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  to try and track that money because in the world of financial crime prevention that I'm in
• 8:59
  uh transaction monitoring has become a huge complex thing. So, if you are scammed, the bank
• 9:05
  or whoever you bank with will be monitoring all of your payment flows and they're doing incredible
• 9:11
  things to look at changes in behaviors using AI, machine learning models to try and assess
• 9:16
  whether or not this is a bit of a different payment. But that's all very very hard to spot
• 9:22
  um depending on the scam. So, actually identifying that it's a scam can be very very hard. So,
• 9:28
  there are just multiple different reasons that this is a very difficult thing to prevent.
• 9:32
  Gosh, it's frightening. So, who's profiting? Who Who are these people? There are multiple different
• 9:39
  types of scammer. So, you might think that it's someone like you or I sat on the end of a phone
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  doing some scams as a bit of a side hustle. Uh, and there are some low-level scammers. Uh, it's
• 9:52
  becoming easier through AI to do some low-level scams, but a lot of it is actually connected
• 9:58
  to large global organized crime. And that makes it really difficult to try and stop. So when we
• 10:06
  start to peel back the layers of some of these scams, if you take a romance scam for example,
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  um which there was a report that came out only yesterday and romance scams are on the increase
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  uh at a large scale in the UK and a lot of these are produced by scam factories in Southeast Asia.
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  on the border of Myanmar often. And these are huge scam factories with often people trafficked
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  people who have been trafficked into these scam factories often with violence and they have
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  really clear romance scam scripts and criteria that they must follow and their job is to have
• 10:44
  20 30 mobile phones and conduct romance scams. So when we try and stop that that's very hard because
• 10:52
  it's across global borders. But just on the the romance scams, I mean, I've seen some things in
• 10:57
  the papers where you see this photo of Brad Pitt, you know, ill in hospital and then these women,
• 11:04
  you know, they fall for these pictures, this, but actually it looks quite fake, you think. But why
• 11:09
  did you fall for it? Is that what we're talking about? Or is it more elaborate than that? Is
• 11:14
  that just a maybe a low-level one that wasn't that good? I think that's the wrong way to look at it.
• 11:21
  um we always victimize the victim even more by saying why did you fall for it? And that's what we
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  shouldn't be doing because actually it's so easy to fall for these because often a romance scam the
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  scammers put the time in and they've actually built up a relationship with that person over
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  sometimes I've seen six months where they really have built up long-term relationships and if it's
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  part of organized crime they can do that because they know if you've got a longerterm relationship
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  when they ask for a big amount of money you're very likely to to send that across. So, even if
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  you haven't met them in person, but you've built a long-term relationship with them over time,
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  you feel like you know that person. Yeah. It's another level. It's a It's a complete other level.
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  And we shouldn't be victimizing the victims even more. So, the amount of time that goes into that
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  and they building that credibility, that's not necessarily what would be reported. Um but yes,
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  you're emotionally involved then and you think but that could possibly you couldn't possibly be doing
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  anything bad here because we've been speaking for so long. You can understand yes when you
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  look at it like that but still sometimes you look at that photo and you think well that wasn't done
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  as professionally if you are going to be a scammer sometimes you look at the photos to be fair and
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  you think that is so obviously not done very well. But I suppose what I'm trying to get from
• 12:44
  you is do you have levels? So maybe the ones that don't do things well, but then something that's
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  like you're saying that fishing email where it's super professional and slick and you could hardly
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  tell the difference. Yeah, there are complete different levels. Um, so the simple ones for me,
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  you quite often get the fishing messages now that are just so obviously the scams from 5 years ago.
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  Um, and there's been a lot of awareness campaigns to show that people should just be aware of text
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  messages that look like a scam. But some scams are very very hard to spot. So for example, a scammer
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  might have built a completely identical web page to your bank that looks the same, feels the same,
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  and the only thing that might be different is one character in the URL. So if you're not looking
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  very closely at the URLs or the website domains, it's very hard to spot unless you know what you're
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  looking for. Um, and in those cases, obviously, banks are actually at the moment out crawling to
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  see who's creating fake websites of their firms and trying to make sure that customers are aware.
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  But if you're an individual that doesn't know anything about financial crime prevention, you
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  might think you're just logging into your bank. That's why elderly and teenagers, although the
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  teenagers, they are growing up to be a bit more savvy because they know how much of this is going
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  on. They won't click on things they don't know. And um even my teenager will she'll check you
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  know she'll take the URL and she'll plug it into Chad GBT and go valid or not question mark check.
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  Great that's an excellent excellent check. Um but yes they are more savvy but they are as well more
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  at risk of things like money muing. What's that? Um so young people are often at risk of becoming
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  a money mule. A money mule is or like a like a donkey or a mule that's carrying something. Um,
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  and it's basically carrying money from one place to another. So, this is where you might have a
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  uh scammer or another type of financial crime. That's where the money's coming in from and they
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  are asking to use your account to move that to somewhere else. So, you might just be part of
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  the transition and carrying that money and moving it from one place to another. Um,
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  and often they target young people because young people are looking for quick ways to make a little
• 15:08
  bit of extra cra. Um, and it's a really easy thing to do. You say, "Absolutely, these are my
• 15:15
  account details. Send me the money." You often keep a small portion of the fee and then you
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  just send the money elsewhere. And young people don't often realize that you're doing something
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  illegal which can ruin your credit rating. If the bank spots it, your every your accounts will be
• 15:30
  shut down. Um I know some young people that have been unable to get mortgages in future because of
• 15:37
  activities that they've done through money muing when they're younger. They might not think that
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  they're doing something criminal, but being part of that money laundering flow, you are. Gosh, this
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  is literally I I'm so glad we're talking right now because I hear, you know, you hear about drug
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  mules and you think, okay, well, you've that's a terrible thing. You meet the wrong people,
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  you're transporting these drugs across and that's it. Your life's ruined, basically. Um, but this is
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  a money mule thing, more subtle, very dangerous for these teenagers and they need to know about
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  it. They we need to get this out there. This has got to be a short come with a warning and say all
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  teenagers listen to this. That's really scary. So, how will they know that they've been money muled?
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  What's what are the signs for this for the for the teens? So, anyone that's asking you to, you know,
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  can I send you some money if you move it somewhere else? Um, the challenge is often it comes through
• 16:32
  people that you semi- know. So, it might be through a school friend or it might be from
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  a university friend or a friend of a friend and you feel like there's an element of trust there,
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  but that's why they're so at risk. Ultimately, if anyone's asking you, can I just move some money
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  through your account? That is a red flag. Okay, that's that's pretty clear, right? So, you said
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  earlier about when we think about the scammers and frauds, this is not necessarily this one lonesome
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  person, you know, sitting on the other end of the phone trying to do this little small scam. So,
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  how should we think about them? How should we visualize what's going on? So, visualizing a
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  scammer is very difficult because of because they could be anyone. That's the challenge. Um,
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  and like I said with the money mule piece, it could be someone within your network and that's
• 17:26
  where really good quality scams take place where there is an element of trust. Um, or it could be a
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  huge global organized crime gang potentially with links to national states. You know, there's a lot
• 17:37
  of big big uh criminal groups behind this. Um or it could be someone very small nearby. Okay. So it
• 17:47
  could be still the individual and a trusted one, but it could be a massive company. Mhm. Corporate
• 17:54
  organization, just a crime organization with levels and I'm I'm assuming management and people
• 17:59
  that have to report to somebody and Exactly. Exactly. I mean, we have actually seen South Korea
• 18:06
  um advising their students not to take jobs in Southeast Asia because they've fallen into these
• 18:11
  um scam factories and they've they've they're lost. They can't get them back. So, this is
• 18:17
  complete human trafficking. My goodness. Okay. So, could you could you walk me through a typical
• 18:23
  modern scam and how that works just you know from the lowest level up so that we can understand bit
• 18:29
  better insight into this world. Yeah. So perhaps if I go back and just take the romance scam
• 18:36
  because um this is one that perhaps people can relate to that starts with some form of contact
• 18:45
  point with an individual and the relationship is built up over time usually on the phone or can be
• 18:53
  through chat messages or perhaps it started on a a dating site and then they've taken it off onto
• 19:00
  WhatsApp or something like that and it really does take a long time. So they build up a relationship
• 19:08
  uh fake personas, fake people, fake backgrounds, um fake scripts. Uh so for example, one of the
• 19:17
  scripts might be after two weeks you must tell them that you love them, after four weeks you
• 19:23
  must move on to the next stage or whatever that might be. So, it's really really scripted to get
• 19:31
  the to make the most of emotional manipulation. Awful. Absolutely disgusting. Really. And then
• 19:38
  once they're ready to do the scam, it's then about putting pressure. So, it's some form of
• 19:44
  fast request in a vulnerable situation that relies on pressure. So, if you have anything
• 19:49
  that is a pressure to move money at speed, that is a red flag. So often it will be um I don't know,
• 19:57
  my mother is in hospital. I need money to pay for her health care. Please can you help me out?
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  I need £10,000. Or they might need just £1,000 to start and then it increases upwards quite quickly.
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  And all of the scams are around some form of pressure to move money quickly. It makes me think
• 20:16
  of my my parents, you know, when they sometimes come to me and my dad will say, "Oh, I've got an
• 20:20
  email and there's a potential thing to invest in and this and that." And whenever I hear anyone
• 20:24
  just anyone asking for money ever, no, no, no, no. And that's the way to go. But it's a sad situation
• 20:31
  where you you have to go out not trusting anyone. Not trusting. That's right. And questioning before
• 20:37
  you make any payment. Yeah. And same with phone calls. They've had phone calls saying, you know,
• 20:42
  you need to do this and pressure about money. And you know, you just think, well, anyone,
• 20:47
  no one would phone you like that about money. So you can't don't take the call. Put that down. Yes.
• 20:52
  don't take phone calls. Um, so phone calls you will not get anymore. Um, phone calls will not
• 20:59
  take place. Uh, but if someone does phone you, it's absolutely 100% a scam. So, phone calls, no.
• 21:06
  Um, and if you are receiving a message or an email and you're not sure about it, phone your bank on
• 21:14
  the number that you know is the bank and ask them and say, "I've just received this message. Can
• 21:20
  you confirm?" they will confirm and then you can you can do it that way. You know, there's even
• 21:25
  weird things going on about podcasts that you'll get and I got one from supposedly and I I could
• 21:33
  tell it was a scam, but from Kirsten Cavaleri who was on the hills in in America saying, "Oh yeah,
• 21:40
  you know, come on my podcast and we'll pay you to come on the podcast and this this and that."
• 21:46
  And it just it just didn't feel right. And it wasn't. No. So, I contacted them and I said,
• 21:51
  "Just so you're aware, you know, you you've got these people and they're like, "Oh, yeah, yeah,
• 21:54
  we're aware, but thank you. Thank you for bringing this to our attention." If it doesn't feel right,
• 21:58
  why would that why is that a thing? What are they trying to do? Well, it will usually be the next
• 22:02
  stage. So, that might be the first trigger point to start building whatever relationship or start
• 22:08
  the process of the scam. Um, and then they'll lead onto something else. Uh actually one other
• 22:16
  scam type that's really important particularly for young people to be aware of are any sorts of scams
• 22:22
  through phone theft. So I recently went to an event where someone talked us through the process.
• 22:28
  He'd actually had his phone stolen and within 15 minutes he'd lost 40,000. Okay. Um and that's
• 22:36
  purely because he had his phone stolen whilst he was walking along the street and it was open and
• 22:41
  unlocked. Yeah. And it was a that was a small on street gang purely for phone thefts. If it's open,
• 22:49
  they have access to usually we have all of our banking apps on our phone. Um and he instantly
• 22:55
  swept through all the accounts and drains them. Drains them. Yep. And you see that a lot in the
• 23:01
  streets of London today. And I was in London for the weekend and my daughter got her phone out and
• 23:06
  was I said, "Put that away right now. were walking around cuz and my husband saw someone's phone
• 23:11
  being snatched right in front of him and the guy tried to run and catch them, but it didn't work.
• 23:15
  It's just happening all the time. All the time. A couple of things that on the phone theft that you
• 23:23
  could do proactively. One, just keep it locked and in your bag. two, when you're tapping on the tube,
• 23:30
  actually some people are going back to to tapping just with their card because if you have your card
• 23:34
  stolen, it's much easier to cancel your card than it is to cancel your phone, which has everything.
• 23:40
  Um, true. So, should we be using the phone out when we're tapping on the tube? There are also
• 23:46
  ways to hide the apps in your phone. So, for example, if you have your HSBC banking app,
• 23:54
  for example, you can change the icon and you can change the name HSBC to something completely
• 24:00
  random that you know is your banking app, but someone who might have stolen your phone wouldn't
• 24:05
  be able to see that icon. So, there are some ways and techniques that people are trying to deploy
• 24:10
  to stop this, but ultimately it's it's a pretty sad situation to be in where we're worried about,
• 24:16
  you know, 40,000 instantly leaving our our accounts if you have your phone stolen. Gosh.
• 24:23
  Okay. A term I've heard, um, push payments. What are push payments? So, authorized push payments
• 24:31
  or a fraud is a particular type of fraud. Uh this is very difficult for banks to spot because this
• 24:38
  is where you or I actually authorize that payment ourselves. So for example in COVID we're all sat
• 24:48
  at home thinking I really want a new puppy. A fraud puppy scams were really popular. So,
• 24:55
  this would be where you see an advert for a new puppy and you think, "This is brilliant."
• 25:00
  And you authorize a payment for the puppy or the deposit and you never get that money back and you
• 25:07
  never get the puppy. And it's really uh common in terms of purchase scams, that kind of thing. So,
• 25:12
  if you see something online, you authorize a payment and then actually the the the thing
• 25:18
  never turns up. It's really hard for banks to spot because you are authorizing that payment yourself.
• 25:25
  And banks must allow you to make payments. You must be able to make your own payments.
• 25:30
  You are the master of your own destiny when it comes to moving your own money around.
• 25:36
  But what if it's a scam? So, so where where were you buying it from? It's not going to be
• 25:41
  Amazon. What is this like Gum Tree? I mean, what? Actually, on different marketplaces,
• 25:47
  there are quite a few fake storefronts. Um, I actually came across one the other day. I think
• 25:53
  it was on Etsy that to me looked look very clearly an AI shopfront. Um, but I know that marketplaces
• 26:01
  are actually doing an incredible amount to scan their websites constantly for fake shopfronts that
• 26:10
  come up on their platforms. Um, but it's a it's a very very difficult piece. So we really so we now
• 26:18
  need to be careful going onto these marketplaces. So Etsy surely not Amazon. be a bit more Amazon.
• 26:24
  I need to be careful what what I say but of course Amazon as well has its problems right but actually
• 26:30
  it's more around Chinese companies not paying any tax okay so it's more of a tax evasion
• 26:36
  problem tax evasion but they would be more Amazon probably be more savvy in spotting the technical
• 26:41
  well Etsy is very very very good as well and they take them down very very quickly okay um Facebook
• 26:46
  marketplace has had to massively step up in terms of monitoring I saw some bad stuff on there yeah
• 26:52
  they are still not Perfect. So, even if you're buying off a marketplace, you just need to be
• 26:58
  conscious and do your own due diligence checks on the vendors. So, look, have they got any reviews?
• 27:04
  Do the reviews look fake? How many other products are they selling? How long have they been on the
• 27:09
  platform for? So, all of those kind of things, you will need to do your own checks as well. There's
• 27:13
  just value to going into a shop and just buying it from a shop and from a person you know and trust
• 27:19
  and buying the quality and all of that. I just it I mean absolutely going back to that. Yeah,
• 27:25
  totally becoming more old. You know that it all goes back. It all it will it will it will. Okay.
• 27:34
  Okay. So, we spoke about online fraud and the link to organized crime and human trafficking. It's not
• 27:44
  always human trafficking, is it? But it can be. It can be. It can be. And once the money is gone,
• 27:51
  it's normally very difficult to recover it. So we've spoken about that. And emotional triggers,
• 27:58
  there is an element of using emotion to con you. So that is a real recognizable thing.
• 28:05
  If someone's that's also a red flag if someone's pressure putting pressure on you um too good to
• 28:11
  be true anything like that and you're finding your emotional strings being pulled that's a
• 28:18
  red flag Mhm. within itself. Um can we talk a bit about AI voices, AI videos? um all that we've seen
• 28:28
  that happening now how much more advanced AI is like can we trust a a phone call now from someone
• 28:34
  who we think is our loved one someone we know and trust and can we trust a video with this person's
• 28:40
  image or not so AI voice is interesting because to create a um set of words or a small conversation
• 28:51
  AI only needs a tiny tiny segment of your voice so if you have a podcast for example and you're
• 28:58
  a podcast host there's there is plenty of your voice out there don't give them ideas to train AI
• 29:05
  models and also if they try to come after me I've got you exactly there we go we'll get them back
• 29:12
  um so yeah if you've got videos online or you do any public speaking there'll be plenty of uh clips
• 29:21
  for AI voice to be trained so you do just need to be conscious of AI voice Um, in terms of videos,
• 29:27
  again, they're very easy to create now. Uh, still a bit harder than simple images, but
• 29:34
  um, they're very easy to create. And images, they're very easy to create. So, if we're
• 29:38
  thinking about things like um, account takeover fraud where someone takes over your account,
• 29:46
  uh, perhaps they use one of your images to open up your account. Face recognition. Face recognition.
• 29:52
  Switch your face recognition off immediately. everyone if you're listening and don't trust any
• 29:58
  uh videos and uh voices unless you check it with a person. Yeah, exactly. Yeah, it's very very
• 30:04
  difficult. Um but we're still we still haven't got to where I think we're going to go in terms of
• 30:13
  criminal use of AI yet. There's still a lot more that's going to happen. So in the last five years,
• 30:21
  we've really seen criminals start to explore these different methods. In the last two years,
• 30:27
  we're really starting to see it ramp up, but this is now a ramp up phase in terms of different types
• 30:34
  of uh criminal uses of AI. On the flip side, there is some really exciting things happening in terms
• 30:40
  of using AI to stop AI generated scams. Um because often a human being trying to spot an AI generated
• 30:51
  image or video can be very difficult. Actually I was in a room of financial crime professionals or
• 30:56
  anti-inancial crime professionals and we were looking at different images and videos side by
• 31:02
  side and we've been trained how to spot AI versus human images and even we were struggling to spot
• 31:08
  quite a few of them. Um, and that's where only AI is good at spotting AI generated images and
• 31:16
  videos. So, I suppose it's not all a doom and gloom story because there is quite a
• 31:21
  lot of financial crime prevention that's using these technologies to try and prevent scams.
• 31:27
  Absolutely. But we're doing a bit of a kind of catch up constantly with new methods. Well,
• 31:31
  they want to use the AI in an evil way and then you've got to counteract that. So you've got to
• 31:35
  develop to you know to just be the antidote like the opposite but it's a tool tool that can be
• 31:41
  used nicely or not nicely I guess. What's the most convincing deep fake you've ever seen? So at the
• 31:48
  moment the most con convincing deep fakes have still been images. So um using people's images
• 31:55
  or fake images to create open new accounts. Um, in terms of videos, they're getting there,
• 32:02
  but most of the deep fakes are still just people's images being used in different ways to circumvent
• 32:09
  controls and move elicit money around. So, um, in terms of governments learning about this,
• 32:16
  because you know, governments in a way are administrators as well. They put things in place,
• 32:20
  but they need the knowledge, the knowhow to know what to put in place. Are they talking to people
• 32:25
  like you, to your company? Mhm. They are. They are indeed. So actually before the last election
• 32:31
  I went to and I was part of um some Labour Party policy groups. So I know that pre this election
• 32:39
  the Labour party was out looking and speaking to industry about this and I'm sure other parties are
• 32:44
  doing the same. Uh there are different industry associations that lobby the government a lot in
• 32:50
  terms of the direction of travel for scams. the importance of 40% of our crime is fraud.
• 32:57
  40% that's out there. Exactly. So, we need to do something about this. Um, but the challenges
• 33:04
  that the frameworks the government have set don't quite work and that's where the lobbying is coming
• 33:12
  into play. Yeah. I mean, that's not good enough. It's just not good enough, is it? It's not% No,
• 33:18
  we we need more investment into policing, but we also need more in terms of regulatory frameworks
• 33:27
  to allow for data sharing across banks, payments firms, because if you are scammed at one firm,
• 33:37
  the money is going to move to another firm. And if you're looking to get that money back, the firms
• 33:42
  all need to be speaking to each other and very very quickly because the money often moves all
• 33:46
  within 10 15 minutes. So we have some regulatory frameworks that facilitate the data sharing,
• 33:55
  but unfortunately we've got privacy frameworks that most people are more concerned about. And
• 34:00
  when you talk to people dayto-day, they will tell me I'm really concerned about my data privacy.
• 34:07
  But I'll challenge them and say, "But you're also concerned about getting your money back
• 34:11
  if you are defrauded. So where do you want the balance to lie?" Because if you are defrauded,
• 34:16
  you're going to call the bank and say, "Give me my money back." But at the same time,
• 34:21
  we can't build effective controls when everything is operating in silos. Of course, if 40% of crime
• 34:32
  is fraud related, the loss of money here, the sheer waste of money, it's like opening a tap
• 34:38
  and letting it just drip out and 40% of all of that just is complete and utter waste. Is it not
• 34:45
  then financially sensible to put the frameworks in place and look at all this GDPR and you know
• 34:53
  move things around a little bit to protect us so that we're not losing money. Not so much for the
• 34:58
  government because they've built the new framework with the A fraud reimbursement. So for the voter
• 35:06
  on the ground you or I you will likely get your money back if it's a smallcale fraud. Okay. So if
• 35:13
  it's a small scale fraud, banks, payment firms are now under reimbursement requirements where
• 35:19
  they must reimburse you. There are a couple of different points around that. There are
• 35:23
  some limits, there are some nuances which I won't go into, but they must reimburse you.
• 35:28
  So from a government perspective for their voters actually for smallcale fraud, which accounts for a
• 35:34
  lot of fraud, pretty much everyone's going to get their money back and they're happy. But actually
• 35:39
  that means that the financial services market is shouldering the financial burden of fraud. So they
• 35:48
  are reimbursing you but actually who's spending the money to then go and actually recover those
• 35:54
  funds. Some of the funds can be recovered but where they can't be recovered ultimately it's the
• 36:00
  financial services firms that are shouldering the burden which for me is a challenge because a lot
• 36:06
  of the frauds come from social media platforms they come from ask you about them ex yes they
• 36:12
  come from different players so they're almost the source or the facilitators of the fraud and they
• 36:20
  are shouldering no responsibility I was going to ask you about them and and they should show
• 36:25
  shoulder responsibility. If the fraud is occurring on their platforms that they've not put the
• 36:30
  mechanisms in place to protect people, why haven't they? They haven't put it in place because they
• 36:36
  don't need to. Um they do make a lot of money. Um and they have incredible engineers that can build
• 36:44
  incredible monitoring models to take down scams. Now, if you take Facebook for example, uh they
• 36:51
  do do this. They do claim to take scams down, but there are so many scams that are not being
• 36:57
  taken down. If you take Instagram for example, there are lots of investment scams, investment
• 37:02
  influencers that are claiming you can go and make millions by investing in some scam products. Uh,
• 37:10
  a lot of those are still not being taken down and once people pay into those, that money goes into
• 37:15
  the system and it's being reimbursed by banks where they're shouldering the responsibility.
• 37:22
  There are some different policy statements that might look at bringing social media for example
• 37:28
  and telecommunications platforms into some form of reimbursement scope but the operational logistics
• 37:34
  around that would be very complicated. So I think it still needs fleshing out as to how
• 37:39
  it looks like but for me they absolutely need to be brought into scope otherwise you will not stop
• 37:47
  half of the sources of of fraud scams. I mean the problem's big enough. It's deep enough. We've all
• 37:52
  been affected. And as far as I'm concerned, the government needs to be talking to you all the
• 37:56
  time, having you go everywhere with them and just sorting it out. And yes, we need accountability
• 38:00
  across all these different almost like entities. Wherever the fraud happens, where the fire starts,
• 38:06
  sparks, you know, you're accountable in that area. You know, if you're the social media platform,
• 38:11
  it's starting there, it's growing there, it's spreading. That's the source. That's what needs
• 38:15
  to change. Exactly. But it's almost going in the opposite direction with some of the messages
• 38:20
  coming out of the US government because of course they're very very pro business um very pro- crypto
• 38:28
  and loosening some of the regulatory requirements around some of those big tech firms. That's kind
• 38:33
  of the primary motivator at the moment instead of putting in the right regulatory frameworks to
• 38:40
  protect consumers. So I think we might actually be going back in a different direction depending
• 38:47
  on the pressure that comes from the US. I mean I'm definitely pro business and and the you know but
• 38:53
  I do feel like there are ways of doing business and you can be sensible and and safely and still
• 39:00
  make money but then you're losing money. So they shouldn't see it as Yeah. I mean the same the same
• 39:05
  for me. I mean I'm very very pro-sup supporting our financial services markets. Otherwise I've
• 39:11
  got no job. I work closely with them dayto-day and I can see that they're shouldering a lot of a big
• 39:18
  burden when actually that should be shared and if you look at the day-to-day consumer and the
• 39:23
  people on the ground we've got too much fraud so we must do something about it and we must bring
• 39:27
  them to scope yeah it's almost like we also need to I mean this podcast is useful to I know that
• 39:35
  people will watching the elderly people will be watching all sorts and we're educating people in
• 39:39
  a way you've got to educate the public as to what a scam looks like. What do you check for? I mean,
• 39:45
  us on an individual level because we're the ones falling for it. Um, I suppose if they
• 39:51
  use our image, that's a different story. But then there are protections that we can put in
• 39:56
  place once we know that it's a danger. You know, the face recognition, switch that off. Don't use
• 40:00
  it. You know, there's things that we can do to protect ourselves. Take that URL,
• 40:06
  pop it into JGBT. Mhm. Or check that phone number. Who called me? Mhm. There are lots of things to
• 40:13
  um protect ourselves. I think we've covered a few of them. You know, for example, the changing
• 40:17
  of the icons on your phone. Um there's lots of small things, but ultimately the biggest thing
• 40:23
  is to just question everything before you make a payment. And it's a sad situation to be in,
• 40:30
  but always question. Um, and what I have with my grandparents, my parents, my family members, if
• 40:38
  they get something that does that just looks off or any requests, they will screenshot it and send
• 40:44
  it to me and just put it through a bit of a filter to say, "What do you think?" And just taking that
• 40:50
  that minute to think about why you're making the payment. Does this make sense? It probably
• 40:57
  doesn't. If it's come through urgently, then it probably doesn't. There were another really
• 41:02
  good example, my mom got a message saying, "Hi, it's your daughter Jess." Because they can see,
• 41:10
  you know, from social media who that is. I'm in a really difficult situation. Lost my phone on
• 41:16
  another person's phone. I need money now. And of course, as a as a mother, she thought, "Hang on a
• 41:24
  second. My daughter's in trouble." But she took that extra step to actually just call me on the
• 41:29
  number that she knows is my number. Yeah. To say, "Jess, is this you? Are you in trouble?" I said,
• 41:34
  "No, I'm not in trouble." And that's exactly what she needed to do was to take that extra minute,
• 41:39
  question it, ask people, and then don't make any payments. Yeah. Gosh, I've had quite a lot
• 41:47
  of texts actually going, "Hi, mom. Can you call me back? Hi, Mom. This that, you know, I'm also
• 41:54
  I'm lost. I'm in trouble. I'm this. I'm that. Can you help me, please?" Those I've had, but it's a
• 41:59
  random number. I don't know it. Why would you be Exactly. Just block me. Exactly. Yeah. Block all
• 42:05
  the time. But then you've also got just annoying, you know, business calls and things that you
• 42:10
  block. But my husband has this thing where he's just any number that he doesn't recognize. Any
• 42:17
  number is straight voicemail. He will never answer a number he doesn't recognize ever. Mhm. Is that
• 42:23
  a good idea? I do exactly the same. Do you? Um, and if it's a number that I need to call, they'll
• 42:29
  leave a voicemail and I'll call them. They'll leave it if it's absolutely. And if they don't,
• 42:33
  they'll email me. Um, you know, if it's one of my clients calling me on my mobile and I don't have
• 42:39
  their number, they will either leave a voicemail or they'll email me and I'll call them straight
• 42:43
  back. Yeah. Sensible businesses, people will leave a voicemail. They won't just keep calling
• 42:49
  you in all these different numbers and things or they're trying to spam you or sell you something
• 42:53
  or pressurize you into It's It's not a good look. Yeah. No. Although sometimes, you know, you've got
• 42:59
  to take that call. The other day I did take a a number that I didn't know and I was right to
• 43:03
  because it was the decorator. He was just trying to say, I mean, are you are you I'm here now. Are
• 43:08
  you outside your house? Yeah. So, something just I I knew I suppose in the back of my mind I knew
• 43:12
  that I was expecting because I'm very suspicious if I ever see a Mhm. and I don't want to be
• 43:16
  harassed and it's a difficult situation, but that's that's the way to deal with it is to be
• 43:21
  constantly suspicious. Um, but then like I said a few moments ago, there are a lot of positives
• 43:29
  here as well. I don't want to scare people into just being constantly um, suspicious all the time,
• 43:35
  but there are lots of exciting things happening at banks at FinTech to try and help you process
• 43:43
  payments safely. So when for example on your banking app when you're making a payment you
• 43:49
  might now see a million and one questions that say do you want to make this payment? Are you sure you
• 43:55
  want to make this payment? Can you explain why you're making this payment? And whilst that might
• 43:59
  be annoying actually it's designed to take you through that that pausing reflecting and thinking
• 44:06
  process before you verify any sort of large movement of fund of funds to a new third party.
• 44:13
  So, that's what it's designed to do. It might be annoying, but please do take note and think
• 44:18
  about those questions when you get them if you're just about to move your money
• 44:21
  somewhere. I did notice those messages coming up, actually. So, top three red flags for scamming,
• 44:30
  what would they be? So, for me, the top three, I mean, the first would definitely be speed. So,
• 44:39
  um, and the urgency. Speed or urgency. I don't know if that's one or two, but the urgency. Um,
• 44:44
  if you have got something that is coming through with urgency, not many things are that urgent. So,
• 44:50
  if it's an urgent, please move the funds, it's it's highly likely to be a scam. Um, the second
• 44:56
  red flag is anything around sort of the emotional manipulation. Um, so whether or not it's and again
• 45:04
  it ties back to the urgency, so some form of emotional manipulation. Um, and then the third
• 45:09
  if it's just something that you don't recognize. So, if it's a uh new third party or a different
• 45:18
  payment that you don't recognize and it feels off, then it probably is off. Then it's probably off.
• 45:24
  And we've spoken about the elderly and teenagers being, you know, the particularly at risk of this,
• 45:31
  but it sounds like not only we're all at risk, corporations are at risk. We're actually all all
• 45:36
  of us are at risk. So, if you could leave people with one, it's difficult, but one golden rule
• 45:44
  before transferring any money online, what would that be? It's very difficult to try and nail it
• 45:51
  down to one. Um, I think the one would have to be question it and think and take that moment before
• 46:01
  you make the payment. Um, I mean, it can be very difficult, for example, if you're in the middle
• 46:07
  of a six-month romance scam, to take that minute and to take take time to think and question, but
• 46:13
  ultimately do just just think, just question. Hang on. Have I done the right due diligence checks for
• 46:19
  this? Do I know the person? Why am I doing this? And that that's the thing to do. Jessica, it's
• 46:27
  been an educational pleasure having you on. Thank you so much. No problem. It's been a pleasure.