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Hi everyone, it's Ben. On the last episode of our show, we talked to Kilee Nickels about her company, Nickel and Suede. If you haven't heard that episode, please go back and take a listen. She was almost scammed out of twenty thousand dollars and unfortunately, fraud, especially targeting businesses, is something that happens far too often. In this episode, I invited Darius Kingsley, head of banking Practices at JP Morgan Chase,
to share his expertise on the topic. The conversation was much longer than what you hear in the episode, though, and Darius is a wealth of information, so we decided to devote a mini segment to my conversation with him. Darius, thank you for joining me today.
Thanks, Ben, appreciate it.
So we wanted to bring you in because the story that we just heard from Kilee that's all too common, sadly, and one that you see a lot of in what you do. So could you talk to us a little bit about what you do and why you're close to issues like this.
Thanks Ben. So in my role as head of banking practices, I spend a lot of time on fraud and scams, and in particular fraudsters and scammers that are hitting our consumers. They target often the more vulnerable populations. You see them targeting elder and also the youth very heavily. But of course everyone is targeted, and small business owners are these days probably more targeted than ever, and so I work very closely with our risk teams. I visit our branches.
I spend a lot of time talking not just with our consumer bankers who help individual customers, but also our small business bankers and try to hear from them the stories and the problems that they're experiencing when they have customers who come in who have fallen prey to a scam, or maybe they've just sent a wire and they're not really sure where it went and they need help, And so I help try to piece together all of these things.
And I'm also working even more closely than ever with government, particularly with the DOJ and the FTC, really trying to wrap our arms around it, not just as a bank, but even as an industry, trying to help reduce the number of these scams.
So it sounds like Kilee's company fell for one of these classic straightforward kind of scams. So what are the most common types of scams that you see. Tell people sort of what you're seeing out there in the ecosystem.
Yeah, unfortunately, that's right. I mean, look, small business owners are busy, You have a lot of things going on. You hire vendors or help, and you assume and hope they're doing the right thing, and usually they always are and will point out. One thing Kilee did right was soon as she caught it, she contacted the bank. A lot of people sit on this. You probably have your business banker contact information, call them immediately go to the branch if you can. The sooner you act, the better
the chance of stopping the wire. For business owners, you're really seeing a lot of the business email compromise scam. It's really easy these days to fake an email and it looks just like someone that you use to transacting with, and they'll often ask you for payment details, for account details, other ones that we see businesses fall for phony invoices. So it's very easy as well these days, much easier
than ever to copy in invoice. You can change an invoice that a vendor sends, change the wiring instructions on it, change the payment information on it, and it looks completely realistic. That's a very common one. Stolen identity that always remains a really big one.
And what about some of the more sophisticated ones. I mean, we read a lot now about pretty elaborate scams where people have been really doing deep research and people get compromised in other ways emotionally, logistically and otherwise.
Yeah, this is someone's job. Unfortunately, this is what people do full time, so they do the research. And of course there's tons of information out there about us, right, there's lots of information about us personally. But if you're a small business, particularly if you're a consumer facing small business, you probably have all sorts of website pages up there,
including past ones. The scammers can very quickly go on LinkedIn, they can go on social media, they can figure out who all your employees are, they can figure out who's in charge of the accounts and finances tech, if anyone is monitoring your cyber they can learn who your vendors are. And it's very hard, as you probably notice, scrub a lot of that from the Internet.
Well, a lot of our small business clients don't want to. I mean, these are small businesses they're trying to build up their reputation. They're trying to build up a client base. They need people to be able to find them.
That's why I think it's important to couple that awareness that you have a public facing persona you have to in order to run your business, but it is also going to open you up to more targeting on a personal side. For individuals, you see these romance scams or what we call also pig butchering, which are basically like investments or crypto scams. It can take months even years to play out, but the payoffs are huge. Literally can
deplete someone's entire life savings millions of dollars. But this shows the level of targeting that scammers and fraudsters will bring.
Let's talk about some of the things that people can do about it.
There is a lot. I'd start with cyber hygiene. I mean, first of all, even within your business, you should all talk about it. Everyone should be aware that you're a target. Talk about it with all of your employees. Right. Sure, not all businesses have the resources to have a full cyber program, but there's a lot of some fairly basic things you can do. These include verifying all of your invoices.
You can regularly monitor your bank accounts, if you can establish dual custody, to have an extra set of eyes on payments, see if you can have maybe someone else approving extra large purchases. In particular, The last thing I'll say and answer to your question is have a plan. I think a lot of people personally never believe that
they'll fall for a scammer fraud. Most businesses should be thinking about a resiliency plan in general, like what happens if they can open, if they're you know, climate issue, whatever it is. It's not a question of if, assume. It's more a question of when, and have a plan for what you will do, Who you will contact, Who at your financial institution or institutions you will contact if you believe that there is a fraud or you may have made an erroneous payment.
Can you talk a little bit about what banks, like us, but other banks in general, are doing now to protect people from these scams, because you know, we can't be accountable for everything that happens in the world, but we can certainly help.
So we are constantly monitoring all the various frauds and the scams out there, and they're constantly changing. We inform a lot of our risk rules, our risk rolls are kind of dynamic, and we're always trying to sort of update them and follow and block payments that don't look right. But a very large part of it as well is education.
Last thing I want to talk about is new technology on the scene, because I could see some of these scams getting even more sophisticated. But also I could imagine a world where it gives you tools to protect yourself that didn't exist before.
Unfortunately, we're seeing the use of AI tools more and more, and so you can think about it in a couple different ways. The AI tools enable you to clone invoices, clone websites a lot more effectively than we used to. Right on a personal level, we've all seen it. You know, the days of the old poorly written Nigerian print scam like those are kind of laughably funny. Today you get emails that look exactly like a major online retailer. They're
like perfect. The other place they're using AI tools that we're seeing is in voice. So back to that. You get a phone call from a vendor, it's someone that you used to, it's going to sound just like them because you can run your own voice through one of these AI clones, and it's going to sound exactly like someone you used to talking to on a personal level. You may have seen it or heard of it with
an infamous grandparent scam of getting your call. Today people are getting calls from their grandchild who's in jail and in trouble, and it sounds exactly like their grandchild because they're running it through these AI tools. Similarly, you can do that with people that you do business with, so be careful of who you're talking with on the other phone. Are very wary of random calls that come up, especially ones that have urgency or require you to act very quickly.
Do you think we can expect tools to come online to help people prevent that? So will there be AI detection tools and other things that come out into the marketplace.
Absolutely. I mean so we're already using a lot of AI and machine learning, and the other thing we're doing is we're taking a lot more time to really work with government and with other entities, major retailers, the social media companies. This is going to be something I think you'll see publicly more and more in twenty five. You've already seen some of it and just really trying to get our arms around the tools that these scammers use to contact our customers.
Well, be aware, make a plan exactly. Thanks very much, Darius, it's great to have you on the show.
Thanks, Ben, appreciate it.
Thank you for listening. Fraud and scams can come from anywhere, so please stay vigilant and have protocols in place for your business to make sure you and your business stay safe. I'm Ben Walter and this is the Unshakeables from Chase for Business and Ruby Studio for iHeartMedia. We'll see you back here soon.