Speaker 1: Ruby
Speaker 2: Hi everyone, it's Ben. On the last episode of our show,
Speaker 2: we talked to Kilee Nickels about her company, Nickel and Suede.
Speaker 2: If you haven't heard that episode, please go back and
Speaker 2: take a listen. She was almost scammed out of twenty
Speaker 2: thousand dollars and unfortunately, fraud, especially targeting businesses, is something
Speaker 2: that happens far too often. In this episode, I invited
Speaker 2: Darius Kingsley, head of banking Practices at JP Morgan Chase,
Speaker 2: to share his expertise on the topic. The conversation was
Speaker 2: much longer than what you hear in the episode, though,
Speaker 2: and Darius is a wealth of information, so we decided
Speaker 2: to devote a mini segment to my conversation with him. Darius,
Speaker 2: thank you for joining me today.
Speaker 1: Thanks, Ben, appreciate it.
Speaker 2: So we wanted to bring you in because the story
Speaker 2: that we just heard from Kilee that's all too common, sadly,
Speaker 2: and one that you see a lot of in what
Speaker 2: you do. So could you talk to us a little
Speaker 2: bit about what you do and why you're close to
Speaker 2: issues like this.
Speaker 1: Thanks Ben. So in my role as head of banking practices,
Speaker 1: I spend a lot of time on fraud and scams,
Speaker 1: and in particular fraudsters and scammers that are hitting our consumers.
Speaker 1: They target often the more vulnerable populations. You see them
Speaker 1: targeting elder and also the youth very heavily. But of
Speaker 1: course everyone is targeted, and small business owners are these
Speaker 1: days probably more targeted than ever, and so I work
Speaker 1: very closely with our risk teams. I visit our branches.
Speaker 1: I spend a lot of time talking not just with
Speaker 1: our consumer bankers who help individual customers, but also our
Speaker 1: small business bankers and try to hear from them the
Speaker 1: stories and the problems that they're experiencing when they have
Speaker 1: customers who come in who have fallen prey to a scam,
Speaker 1: or maybe they've just sent a wire and they're not
Speaker 1: really sure where it went and they need help, And
Speaker 1: so I help try to piece together all of these things.
Speaker 1: And I'm also working even more closely than ever with government,
Speaker 1: particularly with the DOJ and the FTC, really trying to
Speaker 1: wrap our arms around it, not just as a bank,
Speaker 1: but even as an industry, trying to help reduce the
Speaker 1: number of these scams.
Speaker 2: So it sounds like Kilee's company fell for one of
Speaker 2: these classic straightforward kind of scams. So what are the
Speaker 2: most common types of scams that you see. Tell people
Speaker 2: sort of what you're seeing out there in the ecosystem.
Speaker 1: Yeah, unfortunately, that's right. I mean, look, small business owners
Speaker 1: are busy, You have a lot of things going on.
Speaker 1: You hire vendors or help, and you assume and hope
Speaker 1: they're doing the right thing, and usually they always are
Speaker 1: and will point out. One thing Kilee did right was
Speaker 1: soon as she caught it, she contacted the bank. A
Speaker 1: lot of people sit on this. You probably have your
Speaker 1: business banker contact information, call them immediately go to the
Speaker 1: branch if you can. The sooner you act, the better
Speaker 1: the chance of stopping the wire. For business owners, you're
Speaker 1: really seeing a lot of the business email compromise scam.
Speaker 1: It's really easy these days to fake an email and
Speaker 1: it looks just like someone that you use to transacting with,
Speaker 1: and they'll often ask you for payment details, for account details,
Speaker 1: other ones that we see businesses fall for phony invoices.
Speaker 1: So it's very easy as well these days, much easier
Speaker 1: than ever to copy in invoice. You can change an
Speaker 1: invoice that a vendor sends, change the wiring instructions on it,
Speaker 1: change the payment information on it, and it looks completely realistic.
Speaker 1: That's a very common one. Stolen identity that always remains
Speaker 1: a really big one.
Speaker 2: And what about some of the more sophisticated ones. I mean,
Speaker 2: we read a lot now about pretty elaborate scams where
Speaker 2: people have been really doing deep research and people get
Speaker 2: compromised in other ways emotionally, logistically and otherwise.
Speaker 1: Yeah, this is someone's job. Unfortunately, this is what people
Speaker 1: do full time, so they do the research. And of
Speaker 1: course there's tons of information out there about us, right,
Speaker 1: there's lots of information about us personally. But if you're
Speaker 1: a small business, particularly if you're a consumer facing small business,
Speaker 1: you probably have all sorts of website pages up there,
Speaker 1: including past ones. The scammers can very quickly go on LinkedIn,
Speaker 1: they can go on social media, they can figure out
Speaker 1: who all your employees are, they can figure out who's
Speaker 1: in charge of the accounts and finances tech, if anyone
Speaker 1: is monitoring your cyber they can learn who your vendors are.
Speaker 1: And it's very hard, as you probably notice, scrub a
Speaker 1: lot of that from the Internet.
Speaker 2: Well, a lot of our small business clients don't want to.
Speaker 2: I mean, these are small businesses they're trying to build
Speaker 2: up their reputation. They're trying to build up a client base.
Speaker 2: They need people to be able to find them.
Speaker 1: That's why I think it's important to couple that awareness
Speaker 1: that you have a public facing persona you have to
Speaker 1: in order to run your business, but it is also
Speaker 1: going to open you up to more targeting on a
Speaker 1: personal side. For individuals, you see these romance scams or
Speaker 1: what we call also pig butchering, which are basically like
Speaker 1: investments or crypto scams. It can take months even years
Speaker 1: to play out, but the payoffs are huge. Literally can
Speaker 1: deplete someone's entire life savings millions of dollars. But this
Speaker 1: shows the level of targeting that scammers and fraudsters will bring.
Speaker 2: Let's talk about some of the things that people can
Speaker 2: do about it.
Speaker 1: There is a lot. I'd start with cyber hygiene. I mean,
Speaker 1: first of all, even within your business, you should all
Speaker 1: talk about it. Everyone should be aware that you're a target.
Speaker 1: Talk about it with all of your employees. Right. Sure,
Speaker 1: not all businesses have the resources to have a full
Speaker 1: cyber program, but there's a lot of some fairly basic
Speaker 1: things you can do. These include verifying all of your invoices.
Speaker 1: You can regularly monitor your bank accounts, if you can
Speaker 1: establish dual custody, to have an extra set of eyes
Speaker 1: on payments, see if you can have maybe someone else
Speaker 1: approving extra large purchases. In particular, The last thing I'll
Speaker 1: say and answer to your question is have a plan.
Speaker 1: I think a lot of people personally never believe that
Speaker 1: they'll fall for a scammer fraud. Most businesses should be
Speaker 1: thinking about a resiliency plan in general, like what happens
Speaker 1: if they can open, if they're you know, climate issue,
Speaker 1: whatever it is. It's not a question of if, assume.
Speaker 1: It's more a question of when, and have a plan
Speaker 1: for what you will do, Who you will contact, Who
Speaker 1: at your financial institution or institutions you will contact if
Speaker 1: you believe that there is a fraud or you may
Speaker 1: have made an erroneous payment.
Speaker 2: Can you talk a little bit about what banks, like us,
Speaker 2: but other banks in general, are doing now to protect
Speaker 2: people from these scams, because you know, we can't be
Speaker 2: accountable for everything that happens in the world, but we
Speaker 2: can certainly help.
Speaker 1: So we are constantly monitoring all the various frauds and
Speaker 1: the scams out there, and they're constantly changing. We inform
Speaker 1: a lot of our risk rules, our risk rolls are
Speaker 1: kind of dynamic, and we're always trying to sort of
Speaker 1: update them and follow and block payments that don't look right.
Speaker 1: But a very large part of it as well is education.
Speaker 2: Last thing I want to talk about is new technology
Speaker 2: on the scene, because I could see some of these
Speaker 2: scams getting even more sophisticated. But also I could imagine
Speaker 2: a world where it gives you tools to protect yourself
Speaker 2: that didn't exist before.
Speaker 1: Unfortunately, we're seeing the use of AI tools more and more,
Speaker 1: and so you can think about it in a couple
Speaker 1: different ways. The AI tools enable you to clone invoices,
Speaker 1: clone websites a lot more effectively than we used to.
Speaker 1: Right on a personal level, we've all seen it. You know,
Speaker 1: the days of the old poorly written Nigerian print scam
Speaker 1: like those are kind of laughably funny. Today you get
Speaker 1: emails that look exactly like a major online retailer. They're
Speaker 1: like perfect. The other place they're using AI tools that
Speaker 1: we're seeing is in voice. So back to that. You
Speaker 1: get a phone call from a vendor, it's someone that
Speaker 1: you used to, it's going to sound just like them
Speaker 1: because you can run your own voice through one of
Speaker 1: these AI clones, and it's going to sound exactly like
Speaker 1: someone you used to talking to on a personal level.
Speaker 1: You may have seen it or heard of it with
Speaker 1: an infamous grandparent scam of getting your call. Today people
Speaker 1: are getting calls from their grandchild who's in jail and
Speaker 1: in trouble, and it sounds exactly like their grandchild because
Speaker 1: they're running it through these AI tools. Similarly, you can
Speaker 1: do that with people that you do business with, so
Speaker 1: be careful of who you're talking with on the other phone.
Speaker 1: Are very wary of random calls that come up, especially
Speaker 1: ones that have urgency or require you to act very quickly.
Speaker 2: Do you think we can expect tools to come online
Speaker 2: to help people prevent that? So will there be AI
Speaker 2: detection tools and other things that come out into the marketplace.
Speaker 1: Absolutely. I mean so we're already using a lot of
Speaker 1: AI and machine learning, and the other thing we're doing
Speaker 1: is we're taking a lot more time to really work
Speaker 1: with government and with other entities, major retailers, the social
Speaker 1: media companies. This is going to be something I think
Speaker 1: you'll see publicly more and more in twenty five. You've
Speaker 1: already seen some of it and just really trying to
Speaker 1: get our arms around the tools that these scammers use
Speaker 1: to contact our customers.
Speaker 2: Well, be aware, make a plan exactly. Thanks very much, Darius,
Speaker 2: it's great to have you on the show.
Speaker 1: Thanks, Ben, appreciate it.
Speaker 2: Thank you for listening. Fraud and scams can come from anywhere,
Speaker 2: so please stay vigilant and have protocols in place for
Speaker 2: your business to make sure you and your business stay safe.
Speaker 2: I'm Ben Walter and this is the Unshakeables from Chase
Speaker 2: for Business and Ruby Studio for iHeartMedia. We'll see you
Speaker 2: back here soon.