What's happening Fraud Fighters?

Have you ever felt like your fancy job title doesn't really capture what you do day-to-day? Or that leadership sees your role a bit differently than how you view it yourself?

The truth is, the labels we use to describe our professional identities shape how others perceive us - for better or worse.

Let's investigate further.

Read Time: ~4.05 Minutes

What we call ourselves matters

Now you may be thinking, shouldn’t my identity as a fraud fighter be the same as my official job title?

Your own concept of your role and capabilities may not fully align with your title. You likely identify as a fraud expert, regardless of whether your business card says Analyst, Manager, or Director. (does anyone have business cards anymore?)

Those outside the fraud fighting world don't have the same insider perspective. To them, your title is a major signal of your status and qualifications.

While you know yourself to be a skilled fraud fighter, others only see the surface level signals like job title. Using a title that undersells your experience can undermine how stakeholders perceive your expertise and clout in the industry.

It creates a mismatch between how you view your own standing and how others on the outside look at you. And unfortunately, external perceptions often become reality in terms of the level of respect and authority you're given.

The higher level of authority associated with a 'Chief' title versus a 'Manager' title lends itself to greater trust in judgment calls and strategic plans. It builds stakeholder confidence that you have the capability and experience to guide critical fraud programs.

I don’t care about titles, but you should.

Titles, titles, titles. I was on my third title in the past few months. It was like a flavor of the month club - a new title every month. Loss Prevention Specialist, Fraud Analyst, Risk Mitigation Specialist. You name it, I've been called it.

At first, I didn't think much of it. A title was just a title, right? Wrong. I failed to realize that my ever-changing job titles were a neon, flashing signal that no one - not even my own leadership - understood the scope of my role.

This painful truth became clear during two pivotal moments. The first was when I asked for a raise. I had taken on more responsibilities and expanded my impact, so I felt a bump in pay was warranted.

My request was quickly dismissed with a "Sorry, that's just not in the budget right now." Ouch.

The second moment of clarity came when I requested additional headcount for my team of one. My workload had grown exponentially, and I desperately needed more hands.

Yet again, I was met with a swift "No." No discussion, no compromise.

It finally clicked that my flavor of the month titles had shaped my leaders' perspective - they had no idea the complexity and importance of my fraud-fighting responsibilities. And their foggy view of my role was directly impacting their decisions about my budget and resources.

I had unintentionally downplayed my own value.

A bad title leads to endless misconceptions

It felt like I was moving up and taking on more responsibility. But in reality, my core duties stayed largely the same. And all those new titles led to some frustrating disconnects.

Leadership didn't really understand my day-to-day impact or how I contributed to the company's bottom line. Whenever I proposed new fraud initiatives, I'd often hear "Interesting idea, but how does this fit into your role exactly?"

My colleagues were constantly unsure of my expertise and who to turn to for help with fraud-related issues.

"Wait, are you still our go-to for chargeback disputes?" they'd ask. "Or was that part of your old job?"

Turns out, my ever-changing titles were creating all kinds of confusion about my responsibilities and our team's purpose. And that lack of clarity was hurting our ability to collaborate and move the needle fighting fraud.

Took longer than I’d like to admit before I realized how essential it is to have titles that accurately reflect your position and value. The right title clears up confusion, sets proper expectations, and helps leadership see your core contributions.

So these days, I'm much more thoughtful about how I label myself and our fraud fighters.

Use your title as a tool for leverage

Organizational politics and hierarchical structures can significantly complicate the process of using your title to influence leadership decisions.

I can spit out generic theory of how to leverage your title to influence leadership decisions. But we all know, that’s not really how it works.

So with that in mind we have to get crafty…

How can you leverage your title to influence leadership decisions?

1. Align title with responsibilities: You know what you do, but does your title say it? Make sure it paints the right picture, showing that you have the chops to handle big projects.

2. Understand your title's weight: Think about how people see your title. It's more than a name - it’s your professional brand. Use it wisely to back up what you say and do.

3. Navigate the politics: Office politics, right? It’s about knowing who's who and what's what. Figure out the lay of the land to make your title work for you.

4. Build relationships: Titles are nice, but connections matter more. Spend time getting to know people. Genuine relationships can open doors that titles alone can't.

5. Demonstrate value beyond title: Show them what you've got. Consistently knock it out of the park, and you’ll become influential, title or not.

6. Find allies and champions: Ever feel like you need a team behind you? Find those key players who'll back you up. Their support can make all the difference.

7. Be mindful of timing: Timing is everything. Know when to make your move and when to hold back. Align with what's happening around you, and you’ll find the sweet spot.

8. Understand unwritten rules: You know those rules that nobody talks about but everybody follows? Get to know them. They can make or break your ability to sway decisions.

9. Focus on common goals: Speak their language. Frame your ideas in ways that resonate with the goals of the organization. It makes your proposals that much more compelling.

10. Emphasize collaboration: Play nice with others. Collaboration beats confrontation any day. Partner up, and you'll navigate through the maze that much easier.

11. Manage perceptions carefully: Image matters. How people see you and your title can be a fine dance. Keep it graceful, with a touch of subtlety and savvy.

12. Be resilient and persistent: Not every swing is a hit, especially in a tough political game. Learn, adapt, and keep swinging. Your next big win might be just around the corner.

TLDR;

1. Align Title with Responsibilities

2. Understand Your Title's Weight

3. Navigate the Politics

4. Build Relationships

5. Demonstrate Value Beyond Title

6. Find Allies and Champions

7. Be Mindful of Timing

8. Understand Unwritten Rules

9. Focus on Common Goals

10. Emphasize Collaboration

11. Manage Perceptions Carefully

12. Be Resilient and Persistent

That’s it

See you again next Friday in your inbox.

​Brian

ps… If you’re enjoying Bad Fraud Advice, will you take 6 seconds and forward this edition to a friend? It goes a long way in helping grow the newsletter (and bring more and more fraud fighters into the world).

→ Today's action step: Read back through this issue and figure out where you’re at. Find the relevant suggestions I laid out and choose just one to move forward with next week.

If you’re looking to build your career, I hope this can be a resource for you:

1. that fraud Job Board: Have you ever wondered why there are no fraud and trust & safety job boards? Build the fraud career you deserve with job board and career resources. ps we’re going to be making some changes to the site soon.

This comprehensive guide will help you deeply align your brand, skills, and priorities with company leadership goals, SO THAT you can build extensive influence and rapidly advance your fraud prevention career.

How To Use This Strategic Template

Crafting a focused plan will allow you to shape your brand, expertise, communication style, and fraud program priorities to resonate with executives.

Following these key strategies will enable you to position yourself as an influential advisor equipped to help leaders

Research leadership bios - Thoroughly study backgrounds, career histories, priorities, and management styles of executives and board members to gain insights.

Analyze strategic plans - Carefully review company vision, mission, values statements, and multi-year strategic plans to identify key goals.

Identify leadership pain points - Through conversations and observations, determine specific challenges leaders aim to solve this year and next.

Map tangible contributions - Outline specific deliverables, projects, and measurable impacts from your role that directly help achieve leadership targets.

Shape your narrative - Closely align your personal brand, communication style, talking points, and area expertise to resonate with leaders' preferences.

Leverage visibility opportunities - Actively request to present at company meetings, write for internal publications, lead high-profile special projects to increase exposure.

Identifying Leadership Priorities

Understanding these perennial leadership concerns will allow you to identify opportunities to position your expertise, initiatives, and fraud program impacts as solutions.

Aligning to these priority areas will showcase your value in advancing strategic goals. This section highlights the most common priority areas and objectives that organizational leaders and executives typically focus on.

• Improving customer retention

• Expanding into new global markets

• Enhancing supply chain resilience

• Digital transformation initiatives

• Mergers and acquisitions

Gaining Influence as a Trusted Advisor

Implementing these tactics will allow you to regularly engage executives, provide valuable insights, demonstrate your impact, and collaborate across the company.

Becoming a trusted advisor will elevate your influence and career.

• Maintain dashboards tracking performance data: Compile metrics, analyses, and fraud program results tied directly to communicating your value and impact.

• Develop relationships through regular touchpoints: Schedule 1:1 meetings to provide executives with valuable insights and updates.

• Provide advisory support on fraud risks: Offer expertise to help identify vulnerabilities related to strategic initiatives.

• Share fraud insights from competitors/industry: Present examples of fraud schemes and prevention best practices seen externally.

• Prepare leadership recommendations: Develop solutions to close gaps in the company's fraud prevention capabilities.

• Collaborate cross-functionally: Work across departments to identify risks in all areas.

• Conduct interviews to stay attuned: Have discussions to closely track changes in leadership priorities.

Contributions I Can Make

This section outlines sample deliverables, initiatives, and measures tailored to resonate with common leadership priorities.

Identifying contributions you can make that map to strategic goals will showcase your value in advancing objectives.

• Leading anti-fraud efforts

• Assessing third party fraud risks

• Enhancing fraud detection with analytics

• Advising on fraud risks related to investments

• Presenting emerging fraud schemes

• Publishing articles highlighting successes

• Providing fraud awareness training

• Supporting governance initiatives

At the end of the day, putting these strategies into practice will empower fraud leaders to showcase how their skills and priorities line up with leadership goals.

Taking steps to position yourself as a trusted advisor provides a proven pathway for boosting your influence and reaching the next level in your career.

Use this guide as your playbook for demonstrating your value - and becoming an indispensable leader driving strategic priorities.

What's happening Fraud Fighters?

Maybe I should stop generalizing all fraud fighters. Have you ever taken a step back and thought about what kind of fraud fighter you are?

Fraud fighters come in different flavors, each with their own unique style and approach. And you know what? It's pretty fascinating to observe how different their methods can be.

Let's investigate further.

Read Time: ~4.11 Minutes

Understanding Your Fraud Fighter

Your why is your purpose, your motivation, the heart of what gets you out of bed to take on fraudsters every day.

When you know your why, you've got your own guiding North Star to steer by when the work gets rough (and we know it will). Your why reminds you of the bigger picture and why you stay in this fight.

Your why shapes how you approach things and the choices you make. It keeps you locked on target when distractions come flying in.

Most importantly, your why is the fire that fuels your passion and fulfillment as a fraud fighter.

Understanding the reason behind your passion allows you to direct your energy and enthusiasm effectively. Even though this work is challenging, remembering your underlying purpose helps you maintain your commitment through ups and downs.

Where do you even start by trying to figure out what your ‘why’ is?

Well…

Start by thinking about what drives you. Your motivations provide clues to your inner fraud-fighting persona. Conducting a self-assessment to determine what type of fraud fighter you are can be an enlightening process.

Here are some steps to guide you and what you'll need:

• A notebook to record your reflections

• Time for self-analysis

• Input from teammates who know your work style

Step 1: Examine your core motivations

Reflect on what drives you as a fraud fighter. Do you value justice, analysis, problem solving, protecting people, uncovering the truth, etc? Your motivations provide clues to your archetype.

Step 2: Evaluate your working style

Consider how you approach tasks and challenges. Are you more creative, precise, independent, relentless, strategic, questioning? Your work preferences point to your type.

Step 3: Assess your interactions with others

How do you communicate and connect with colleagues and clients? Can you easily read behaviors? Do you focus on safeguarding others? Your interactions reveal much about your style.

Step 4: Identify your strengths and weaknesses

What are you naturally good at and what requires more focus? Are you perceptive? Analytical? Empathetic? Strategic? Understanding this helps determine your fit.

Step 5: Seek feedback

Ask colleagues for insights into your work style, strengths and weaknesses. They may provide perspective you lack.

Step 6: Take relevant assessments

Personality and career assessments can provide additional clarity on your characteristics.

Choosing Your Fraud Fighter

Who else is just here to figure out what type of fraud fighter they are?

The Virtuoso

Wildly creative thinker. Approaches cases from unorthodox angles and identifies complex connections that crack cases wide open.

Strengths

• Ability to approach problems from multiple perspectives and generate unique solutions.

• Their creative thinking can result in innovative fraud detection and prevention strategies.

Weaknesses

• Their abstract methods could have colleagues thinking they're decoding hieroglyphics.

• They may treat a simple fraud case like it's a quantum physics problem.

The Scientist

Relies on data-driven analysis to pinpoint anomalies and patterns indicative of fraud. Precise and quantitative in their approach.

Strengths

• Their precise, data-driven approach can yield highly accurate results.

• They're likely to stay up-to-date on new analytical tools and techniques.

Weaknesses

• So data-driven they might overlook the 'human' in 'human fraud'.

• May freeze in terror at the mere thought of unquantifiable variables in an investigation.

The Architect

Builds an intricate blueprint of strategy from fragments of data to reconstruct and protect what happened.

Strengths

• Their holistic approach ensures all factors are considered in an investigation.

• They can create comprehensive strategies that are thorough and meticulous.

Weaknesses

• Spends time building blueprints of how all the fraud tools can work together.

• Without enough data, they might be as lost as a tourist without a map.

The Protector

Strong moral compass drives them to shield the vulnerable from exploitative crimes. Passionate about justice and supporting victims.

Strengths

• Their moral compass and passion for justice can be highly motivating.

• They may go above and beyond to support victims and ensure justice is served.

Weaknesses

• Emotions might cloud their judgement faster than a foggy morning.

• Sees themselves as apart of the Avengers even though their scene got cut from the movie.

The Detective

Observant and insightful, picks up on subtle clues others miss. Uses logic and strategic questioning to unravel schemes. The classic meticulous investigator.

Strengths

• Their keen observational skills and logical thinking can unearth hidden information.

• Their strategic questioning can help them gather information efficiently.

Weaknesses

• Often can be found on page 20 of a Google search.

• Frequently talking to pictures of suspects, hoping they'll crack under the pressure.

The Lone Wolf

Prefers working solo with minimal oversight. Independent and self-motivated. Does their best work alone.

Strengths

• Their independence allows them to work efficiently and without distraction.

• They're self-motivated and can take initiative.

Weaknesses

• Collaboration is as enjoyable to them as a root canal.

• Often spotted in their natural habitat, a secluded corner of the office, fiercely guarding their coffee.

The Bloodhound

Intense focus and persistence when trailing a hot red flag. Won't let up once they latch onto evidence.

Strengths

• Their persistence can help them solve complex or long-term cases.

• They won't be easily discouraged by obstacles or challenges.

Weaknesses

• Struggle to let go of unresolved cases like a dog with their fav chew toy.

• Typically found hunched over an escalated case from their first day, muttering "I'm close, I can feel it."

The Psychologist

High emotional intelligence allows them to decipher behaviors and micro-expressions. Reads between the lines and identifies deceit.

Strengths

• Their high emotional intelligence can help them understand human motivations and behaviors.

• They're adept at recognizing deception, which is valuable in fraud investigations.

Weaknesses

• They might rely too heavily on their interpretation of behaviors, creating a plot where there isn't one.

• They could get carried away reading between lines, leading to a masterpiece of imagination rather than fact.

Knowing your archetype provides insight into not just what you do best, but also who you are at your core and why you approach things in a certain manner.

Playing to Your Fraud Fighter

Lean into what you naturally do best. If you're the creative type, brainstorm solutions from new angles. If you're all about the data, use your analytical skills to get clear insights.

When a situation fits your abilities, take the lead and own it. But also acknowledge where you're weaker and take steps to balance it out.

A little self-awareness goes a long way.

Knowing your own style helps you connect better with other fraud fighters. Appreciate that your teammates have different strengths - learn from them!

Understanding each other breeds respect. You get why someone works the way they do, and can appreciate their unique style. Communications improve, conflicts decrease.

It's a win-win.

Diverse perspectives lead to balanced decisions. The data lovers balance the intuitives.

Mixing archetypes also enables adaptive problem solving. Creative thinkers, relentless workers, keen investigators - you attack from all sides.

Analyticals help imaginatives get more data-driven.

Lone wolves get collaboration tips from team players.

Now it’s time to figure out which fraud fighter archetype you are. Let me know once you find out.

See you again next Friday in your inbox.

​Brian

ps… If you’re enjoying Bad Fraud Advice, will you take 6 seconds and forward this edition to a friend? It goes a long way in helping grow the newsletter (and bring more and more fraud fighters into the world).

→ Today's action step: Read back through this issue and figure out where you’re at. Find the relevant suggestions I laid out and choose just one to move forward with next week.

If you’re looking to build your career, I hope this can be a resource for you:

1. that fraud Job Board: Have you ever wondered why there are no fraud and trust & safety job boards? Build the fraud career you deserve with job board and career resources.

Knowing your archetype provides insight into not just what you do best, but also who you are at your core and why you approach things in a certain manner.

Your archetype reveals your deeper motivations, perspectives, priorities, ideal processes, and innate personality traits. Embracing this professional identity allows you to play to your strengths, make strategic career decisions, build self-awareness, complement teams, and craft an authentic fraud-fighting self.

Knowing this provides self-understanding and confidence in applying your gifts.

The Virtuoso

Wildly creative thinker. Approaches cases from unorthodox angles and identifies complex connections that crack cases wide open.

The Scientist

Relies on data-driven analysis to pinpoint anomalies and patterns indicative of fraud. Precise and quantitative in their approach.

The Architect

Builds an intricate blueprint of strategy from fragments of data to reconstruct and protect what happened.

The Protector

Strong moral compass drives them to shield the vulnerable from exploitative crimes. Passionate about justice and supporting victims.

The Detective

Observant and insightful, picks up on subtle clues others miss. Uses logic and strategic questioning to unravel schemes. The classic meticulous investigator.

The Lone Wolf

Prefers working solo with minimal oversight. Independent and self-motivated. Does their best work alone.

The Bloodhound

Intense focus and persistence when trailing a hot red flag. Won't let up once they latch onto evidence.

The Psychologist

High emotional intelligence allows them to decipher behaviors and micro-expressions. Reads between the lines and identifies deceit.

Share this with your team to see what archetype they are

What's happening Fraud Fighters?

From an overlooked intern to a credible fraud fighter. I wish I could say it happened overnight and engineering credibility could happen with the snap of my fingers.

It’s probably not going to happen like that, but let’s lay out a roadmap to learn the nuanced art of credibility.

Ready for a shortcut that’s not a shortcut for a successful fraud career?

Let's investigate further.

Read Time: ~4.07 Minutes

I Had 0 Credibility

I sat at my desk as a low paid intern flipping through invoices to input into our system. Tapping away on my keyboard. Until I noticed something seemed off.

I dug a little deeper and looked up the account in our system. Noticing a few patterns and overlapping dates on these invoices.

I didn’t really know what I was doing, but I knew something wasn’t right. Didn’t even realize this was considered fraud at the time. Completely confused with what this could be, I raised my hand and asked a few questions to my boss. The case got quickly escalated and taken off my plate.

crickets

I never heard anything about this case again because I was just an intern. No credit. No good job. No thanks.

We had lost a large amount of money to this scheme.

How did this low-paid intern become the one to catch it.

Right then I realized 2 things.

• I was going to become a fraud fighter

• There was both an art and business to fighting fraud

Why did I never hear anything about this again?

I had zero credibility.

3 Levels of Credibility

A lot of people don’t want to take the time to learn the game. They’d much rather get to the part where people know who they are and start giving them instant approval.

Especially if the fraud fighter has already achieved some level of fraud fighting success elsewhere, they expect the very first thing they say or try to implement leadership and engineers jump to it.

They believe their professional status should be enough for people to pay attention to them.

For me, I didn’t have the privilege of relying on my previous successes or cushy sounding titles. I hand’t achieved anything yet in my fraud career. As a result, credibility was something that needed to be earned.

Look at where you currently stand. It is crucial to recognize that credibility is not a static concept. It is something that needs to be nurtured and continuously earned.

Did you know there are levels to credibility? What level are you on in your current role?

1. Implied credibility

2. Perceived credibility

3. Earned credibility

Credibility is not the key to becoming a popular fraud fighter. Or the most liked fraud fighter. Credibility is your way of earning currency as a fraud fighter - whether that be a paycheck, budget, or influence.

Roadmap to Credibility

Luckily, in the ever-evolving digital age of fighting fraud, the methods to establish and maintain credibility are different.

As a digital fraud fighter, credibility is no longer solely earned the traditional way because there is less of a path into our world. We come from so many unique journeys but still end up here fighting fraud.

Some signs of credibility are subtle and others are not-so-subtle. But it really just means that you are a fraud fighter worth listening to.

Let’s break down the 3 levels to credibility.

Implied credibility is how much better or worse your fraud advice is than everyone else’s in the conversation.

If you’re sitting in a meeting discussing a recent fraud attack and what happened, you lay out your solution in a clear, concise, and specific manner (and understanding the audience that is sitting in the room)

They don’t need to read your resume or take a look at your past reviews to know whether or not you’re someone credible. They’ve already made their judgement. Your solution is so good, your credibility is implied.

The second level gets a little tricky, and most fraud fighters want it: perceived credibility. It’s making a promise that you’re credible based on what other people are saying about you.

Certifications like the CFE

or quotes like “Brian Davis is the single greatest fraud fighter of this generation” - George Washington

or how many followers someone has

or lists like 30 Fraud Fighters under 30

To be honest, these signals of credibility do work. There’s a reason why social proof wis used in almost every marketing campaign. These signals can be extremely powerful in gaining attention.

The challenge with perceived credibility is that it can be bought, but you still have to back up the expectations and deliver. Some can. But if you skip to this level, you’re going to leave a lot of people disappointed.

The third level is the simplest to gain but takes time. Earned credibility.

Simply put, this is your experience fighting fraud - the battles, bruises, and scars.

What hooks people in is your consistency, your improvement over time, and your ability to create solutions that resonates with us fraud fighters.

People will keep coming back to you because they believe what you do tomorrow will be even better than what you did today. The coolest part about earned credibility is it can be acquired all for free.

Expertise vs Arrogance

Expertise is valuable. It commands respect, builds trust, and can be a powerful tool for your career. The fine line between demonstrating expertise and appearing arrogant can be challenging to navigate.

Demonstrating expertise is more than just about asserting what you know.

it's about conversation, collaboration, and learning. By navigating this journey with self awareness and respect, you can show your expertise without seeming arrogant. Now you’re one step closer to becoming a respected, credible fraud leader.

You’ve made it this far and there haven’t been any real frameworks yet. What’s the deal?

Let’s break it down simply. How can you show your expertise without appearing arrogant today?

1. Understand your expertise and stay current on fraud trends.

2. Cultivate curiosity by asking thoughtful questions.

3. Actively listen. Listen before speaking, gaining a deeper understanding.

4. Teach others and provide constructive feedback.

5. Admit mistakes gracefully, showing humility and strength.

6. Build relationships based on trust and respect.

7. Let evidence speak for your expertise; it's about 'show', not 'tell'.

The moment you have even one signal of credibility, you should start leveraging it.

There are an infinite number of credibility signals that exist.

Unfortunately, most fraud fighters don’t use these signals to their advantage. They have them, or they very easily could have them, they just choose not to leverage them.

As a result, they don’t appear very credible at all.

See you again next Friday in your inbox.

​Brian

ps… If you’re enjoying Bad Fraud Advice, will you take 6 seconds and forward this edition to a friend? It goes a long way in helping grow the newsletter (and bring more and more fraud fighters into the world).

→ Today's action step: Read back through this issue and figure out where you’re at. Find the relevant suggestions I laid out and choose just one to move forward with next week.

If you’re looking to build your career, there are 2 ways I can help you:

1. Monthly Fraud Fighters Networking Series: Make new connections, learn from the best in the field, and stay updated on the latest fraud prevention strategies. Meet five new fraud fighters each month, share your challenges, and expand your horizon.

2. that fraud Job Board: Have you ever wondered why there are no fraud and trust & safety job boards? Build the fraud career you deserve with job board and career resources.

What's happening Fraud Fighters?

If you've taken on the task of creating or overhauling fraud operations at your company, you know it can feel like an uphill battle.

When processes are undocumented or disorganized, it's challenging to make meaningful progress.

Where do you even begin establishing structure within all that chaos?

Let's investigate further.

Read Time: ~3.57 Minutes

Understanding the Chaos

There were no pre-existing structures, no clear protocols, and absolutely no team. I was taking over from another fraud by committee. A handful of people who inherited different parts of fraud, but want nothing to do with it. Why would they though? It was never really supposed to be why they were hired.

It’s never not a daunting task, but for some reason this is where I thrive.

The fraud operations function had been neglected for years and processes were disorganized at best, nonexistent at worst.

The team consisted of 3 people working in silos, no documented procedures, and zero big picture strategy or coordination. They were happy to quickly hand off their responsibilities to me - almost in a way that they felt like I was a sucker…

I started with a deep dive fraud risk assessment, interviewing stakeholders across the business to shine a light on vulnerabilities and digging through customer tickets to find the voice of the customer. It was eye opening just how many gaps there were in processes and controls throughout the business. No wonder why they decided to hire for this role

Organizing the Chaos

Now that you know the risks, it's time to plan efficient workflows for your fraud operations. Start with comprehensive documentation of the existing processes and procedures. This should include every step that your team currently takes in carrying out an investigation, from the initial notification of an incident, all the way to the resolution and reporting of results. Be meticulous in documenting the tasks, including who performs each task, how they do it, the tools or systems they use, and the time it typically takes.

Watch your fraud fighters work. Notice the difficulties they face every day. But don't just stop there. Take a closer look at the case management systems and tools they use. It's important to see if these systems and tools are causing the problems. If they are, it's time to make big changes.

Start by testing small changes in your workflow before implementing them on a larger scale. This allows you to assess their effectiveness and make adjustments without causing major disruptions. By testing on a smaller scale, you can ensure compatibility with current processes and minimize risks.

Set up tracking mechanisms to monitor key workflow efficiency metrics like analyst caseloads, investigation handling times, and escalation resolution rates. Continually refine workflows based on changing needs and emerging trends. Smooth handoffs and communication channels are key for productivity.

Just here for the simple processes? I got you

1. Document current workflow processes end-to-end

2. Identify pain points and bottlenecks causing inefficiencies

3. Brainstorm ways to streamline handoffs between teams

4. Map optimized workflows and get stakeholder input

5. Implement workflow changes through small controlled pilots first

6. Provide training and support on new workflows

7. Establish quantifiable metrics to track workflow efficiency

8. Iterate on changes in response to measured outcomes

9. Automate repetitive manual tasks where possible

10. Continually assess workflows in light of new tools/priorities

The Anti-Chaos Framework

As workflows shape up, it's time to develop an overarching framework to guide all fraud operation activities. This provides the infrastructure to scale operations now and into the future.

When designing your framework, opt for adaptability over rigidness. We know fraud threats are always evolving, so we need to build in flexibility to pivot as needed.

Thought I forgot about how to align fraud with bigger business objectives?

You knew me better by now.

Clearly align framework components to business objectives and risk appetite. This ensures fraud operations activities drive toward the right outcomes. Update frameworks along with changes to the business strategy.

Introduce changes incrementally when implementing new frameworks to minimize disruption. Provide ample training and get stakeholder buy-in at every stage. If you have no reinforcement plan, your training will be a waste of time.

Without a solid framework, fraud fighting efforts become fragmented. A strong foundation allows you to systematically expand capabilities down the road.

But scale doesn’t matter if everything is still just chaos.

For fraud fighters to work efficiently, standardized procedures for investigations are a must. Establish consistency across investigations to enable accurate benchmarking.

Build playbooks with step-by-step protocols tailored to fraud types analysts will encounter. Address everything from receiving alerts to evidence gathering, analysis, reporting, and prevention recommendations.

If fraud fighters don't have established guidelines, they tend to create processes on the spot. This can result in crucial steps being overlooked, delays in handling cases, and ultimately allowing fraud to go undetected. Continual quality checks and playbook updates are essential in avoiding these habits and future coaching nightmares.

The playbook serves as a guidebook that outlines the proper steps to follow when handling different types of cases. By updating the playbook regularly, fraud fighters can stay informed about the latest fraud trends, techniques, and prevention strategies. This allows them to adapt their processes accordingly and stay one step ahead of fraudsters.

If they know the playbooks are never up to date, why would they ever use them?

I wouldn’t.

So let’s help a fraud fighter out by staying up to date with this framework.

1. Document current procedures for fraud investigation operations

2. Identify variability and gaps in investigation process

3. Standardize playbooks for investigation processes

4. Customize based on different fraud risk types

5. Training for investigators on new procedures

6. Implement QA practices for consistency

7. Reinforce SOPs with case management

8. Solicit regular investigator feedback

9. Use insights from past cases

10. Update as fraud evolves

See you again next Friday in your inbox.

​Brian

PS… If you’re enjoying Bad Fraud Advice, will you take 6 seconds and forward this edition to a friend? It goes a long way in helping grow the newsletter (and bring more and more fraud fighters into the world).

→ Today's action step: Read back through this issue and figure out where you’re at. Find the relevant suggestions I laid out and choose just one to move forward with next week.

If you’re looking to build your career, there are 2 ways I can help you:

1. Monthly Fraud Fighters Networking Series: Make new connections, learn from the best in the field, and stay updated on the latest fraud prevention strategies. Meet five new fraud fighters each month, share your challenges, and expand your horizon.

2. that fraud Job Board: Have you ever wondered why there are no fraud and trust & safety job boards? Build the fraud career you deserve with job board and career resources.

How To Build a Fintech Fraud Program From Scratch

In the rapidly growing world of financial technology (fintech), fraud management has become a critical aspect of ensuring the security and trustworthiness of digital transactions. As fintech companies continue to revolutionize the way we manage our finances, it is crucial for them to prioritize the establishment of robust fraud management programs.

Understanding the Importance of Fraud Management in Fintech

Fraud has become a significant concern in the financial industry, with criminals employing increasingly sophisticated tactics to exploit vulnerabilities in digital systems. In this section, we will explore the rising threat of financial fraud and the pivotal role that fintech plays in preventing these fraudulent activities.

Financial fraud is a growing problem that affects individuals, businesses, and the entire economy. The digitization of financial transactions has made it easier than ever for fraudsters to carry out their illicit activities. From identity theft to account takeovers, criminals are constantly evolving their tactics to exploit vulnerabilities in digital systems. As more and more people rely on digital platforms for their financial needs, the risk of falling victim to fraud increases.

Fortunately, fintech companies are at the forefront of the battle against fraud. They understand the importance of implementing robust fraud management systems to protect their customers and maintain the integrity of the financial ecosystem. By investing in cutting-edge technologies and adopting innovative approaches, fintech firms are actively working to stay one step ahead of fraudsters.

The Rising Threat of Financial Fraud

The rise of financial fraud is a cause for concern for individuals and businesses alike. Criminals are constantly finding new ways to exploit vulnerabilities in digital systems, making it essential for financial institutions to be proactive in their fraud prevention efforts. From phishing attacks to malware-infected websites, fraudsters are always looking for opportunities to trick unsuspecting victims into revealing sensitive information.

One of the most prevalent forms of financial fraud is identity theft. With stolen personal information, fraudsters can impersonate individuals and carry out fraudulent transactions. This can have devastating consequences for the victims, leading to financial loss, damaged credit scores, and even reputational harm. Fintech companies recognize the severity of this threat and are taking significant steps to protect their customers' identities.

The Role of Fintech in Fraud Prevention

Fintech companies play a crucial role in preventing financial fraud. They employ advanced technologies and data-driven approaches to detect and prevent fraudulent activities. By leveraging machine learning algorithms, artificial intelligence, and other cutting-edge tools, these companies can analyze vast amounts of data and identify patterns indicative of fraudulent behavior.

For example, fintech firms use sophisticated algorithms to detect anomalies in customer transactions. By comparing each transaction to a vast database of known fraudulent patterns, they can quickly identify suspicious activity and take appropriate action. This proactive approach allows them to prevent fraudulent transactions before they cause any harm.

In addition to leveraging technology, fintech companies also work closely with industry regulators to implement robust security measures. They understand the importance of protecting customer data and financial transactions from unauthorized access. By adhering to strict security standards and constantly monitoring for potential threats, fintech firms create a safe and secure environment for their customers to conduct their financial activities.

In conclusion, the rising threat of financial fraud necessitates the active involvement of fintech companies in fraud prevention. By employing advanced technologies, data-driven approaches, and close collaboration with industry regulators, fintech firms are at the forefront of the battle against fraud. Their efforts are crucial in maintaining the trust and confidence of customers in the digital financial landscape.

Key Components of a Successful Fraud Management Program

A well-designed fraud management program encompasses various elements, each playing a crucial role in ensuring the program's effectiveness. In this section, we will delve into the key components that should be considered when building a successful fraud management program.

Identifying and Assessing Fraud Risks

The first step in developing an effective fraud management program is identifying and assessing the potential risks your organization faces. Understanding the specific threats relevant to your industry and target audience will allow you to tailor your prevention strategies accordingly. Conducting risk assessments regularly will also enable you to stay ahead of emerging fraud trends.

When identifying fraud risks, it is important to consider both internal and external factors. Internal risks may include employee fraud, collusion, or unauthorized access to sensitive information. External risks, on the other hand, may involve cyberattacks, identity theft, or fraudulent transactions.

Assessing fraud risks involves a comprehensive analysis of your organization's processes, systems, and controls. This assessment may include reviewing historical fraud incidents, analyzing industry trends, and conducting interviews with key stakeholders. By understanding the specific risks your organization faces, you can develop targeted strategies to mitigate and prevent fraudulent activities.

Developing Fraud Prevention Strategies

Based on the identified risks, developing robust fraud prevention strategies is essential. This involves implementing stringent authentication measures, such as multi-factor authentication and biometric technologies, to ensure the legitimacy of users and transactions. Establishing strong internal controls and regularly training employees on fraud prevention techniques will further enhance the program's effectiveness.

Effective fraud prevention strategies also involve creating a strong organizational culture that promotes ethical behavior and integrity. By fostering an environment where employees are encouraged to report suspicious activities and are aware of the consequences of fraud, you can create a strong deterrent against fraudulent behavior.

Furthermore, staying updated with the latest fraud prevention technologies and industry best practices is crucial. As fraudsters constantly evolve their tactics, organizations must continuously adapt and enhance their prevention strategies to stay one step ahead.

Implementing Fraud Detection Systems

To detect and mitigate fraudulent activities, integrating sophisticated fraud detection systems is crucial. These systems employ advanced analytics and machine learning algorithms to identify anomalies and patterns suggestive of fraud. Real-time monitoring and analysis of transactions can provide valuable insights and enable swift action to be taken against fraudulent activities.

Implementing fraud detection systems involves integrating various data sources, such as transactional data, customer behavior data, and external threat intelligence. By leveraging data analytics, organizations can detect unusual patterns, unusual transaction amounts, or suspicious user behavior that may indicate fraudulent activities.

It is important to note that fraud detection systems should not be solely relied upon. Human intervention and expertise are still essential in interpreting the results generated by these systems and making informed decisions. Regularly reviewing and updating fraud detection models and rules is also necessary to ensure the system remains effective in detecting new fraud patterns.

Additionally, organizations should establish clear protocols and processes for handling suspected fraud cases. This includes defining escalation procedures, coordinating with law enforcement agencies, and implementing measures to recover losses resulting from fraud.

In conclusion, a successful fraud management program requires a comprehensive approach that encompasses identifying and assessing fraud risks, developing robust prevention strategies, and implementing sophisticated detection systems. By continuously evaluating and enhancing these key components, organizations can effectively mitigate the risks associated with fraud and safeguard their assets and reputation.

Steps to Building a Fraud Management Program from Scratch

Now that we have discussed the key components of a successful fraud management program, let's move on to the practical steps involved in building one from scratch.

Establishing a Fraud Management Team

Forming a dedicated fraud management team is fundamental to the success of your program. This team should consist of individuals with expertise in fraud prevention, data analysis, and technology. By working collaboratively, the team can identify vulnerabilities, drive innovation, and respond promptly to emerging fraud threats.

In addition to the core team, it is also important to involve representatives from different departments within the organization. This cross-functional approach ensures that all areas of the business are considered when implementing fraud prevention measures. It also promotes a culture of fraud awareness and accountability throughout the organization.

The fraud management team should regularly meet to discuss ongoing initiatives, review fraud trends, and share best practices. These meetings serve as a platform for knowledge exchange and continuous improvement.

Setting Up Fraud Prevention Policies

Developing comprehensive fraud prevention policies is critical to combatting fraudulent activities effectively. These policies should outline the organization's stance on fraud, the responsibilities of employees, and the procedures for reporting and investigating suspicious activities.

When creating these policies, it is important to consider industry regulations and best practices. This ensures that the organization is compliant with applicable laws and standards. It also helps to establish a strong foundation for fraud prevention.

Regular training and communication to ensure the policies are well understood by all employees is essential. This can include workshops, webinars, and awareness campaigns. By educating employees about the different types of fraud and the warning signs to look out for, organizations can empower their workforce to be proactive in detecting and preventing fraud.

Integrating Fraud Detection Technologies

To enhance the efficiency of your fraud management program, integrating state-of-the-art fraud detection technologies is essential. From AI-powered predictive analytics to behavioral biometrics, these technologies provide real-time insights into potential fraudulent activities.

When selecting fraud detection technologies, it is important to consider the specific needs and goals of the organization. Different technologies offer different capabilities, and what works for one company may not work for another. Conducting thorough research, evaluating vendors, and seeking recommendations from industry experts can help in making informed decisions.

Once the technologies are implemented, continuous monitoring and evaluation are necessary to ensure their effectiveness. This involves analyzing data, identifying patterns, and fine-tuning the algorithms to improve accuracy and reduce false positives. It is an ongoing process that requires collaboration between the fraud management team and the technology providers.

Furthermore, staying updated with the latest advancements in fraud detection technologies is crucial. The landscape of fraud is constantly evolving, and new threats emerge regularly. By keeping abreast of industry trends and innovations, organizations can stay one step ahead of fraudsters and better protect themselves and their customers.

Future Trends in Fintech Fraud Management

As technology keeps getting better, fraudsters are also finding new ways to trick people. Let’s explore the latest trends in fintech fraud and how they are changing the way we manage it. By understanding these new developments, we can stay ahead of the fraudsters and protect our fintech sector.

The Role of AI and Machine Learning in Fraud Detection

Artificial intelligence and machine learning algorithms have revolutionized fraud detection processes. By analyzing vast volumes of data in real-time, these technologies can detect patterns and anomalies indicative of fraudulent activities. As AI and machine learning continue to advance, they will play an even more crucial role in safeguarding fintech transactions.

The Impact of Blockchain on Fraud Prevention

Blockchain technology offers inherent security features that can significantly enhance fraud prevention efforts. By creating a decentralized and transparent ledger, blockchain reduces the risk of fraudulent transactions and increases trust among participants. As blockchain becomes more prevalent in the fintech industry, its impact on fraud prevention will undoubtedly grow.

Building a robust fraud management program is a multifaceted endeavor that requires a combination of technological innovation, expert teams, and proactive strategies. By understanding the importance of fraud management in fintech, incorporating key components into your program, and staying informed about emerging trends, you can establish a fraud management program that safeguards your organization and instills confidence in your customers.

What's happening Fraud Fighters?

Imagine being the sole fraud fighter in a company. You would feel quite alone, and it would seem that others don't understand your role.

You're trapped in a continuous cycle of frustration, constantly correcting misunderstandings and trying to find support that seemed nonexistent. In a world full of busy leaders, the role of fraud often gets lost in translation.

It seems like each leader has a different perception of what fraud is. But how do we change that?

Let's investigate further.

Read Time: ~4.44 Minutes

Grappling with Isolation

I sat down at my desk after being scolded for not working at my desk.

I was the sole member of a fraud prevention team, a one-man army trying to fight fraud. Leadership saw me as someone who should be glued to a desk. I had a unique style of work, often finding open spots in the building to create new dynamics and perspectives in my working environment.

This kept me sharp and creative, but it was a concept that was hard for others to grasp.

I was grappling with a sense of isolation. The feeling of shouting into a void, of not being heard, was overwhelming. The lack of understanding from leadership about my role led to consistent frustration.

I was struggling.

The lack of budget, the absence of engineering support, and the dwindling influence with leadership were all clear signs of an uphill battle. I was stuck as a one-man fraud team.

I couldn't get the support I needed - physical, financial, nor technical. It was clear they had no idea what I did or how I did it, and it seemed like they didn't care to understand.

We didn’t have a misunderstanding. We needed to reframe the entire perception of fraud.

My Battle with Misconceptions

Misconceptions often cloud the understanding of various roles and functions. One area that frequently falls prey to misunderstanding is our world of fraud management. As a Fraud Leader, I wanted to uncover these misconceptions within my organization, aiming to shed light on the true value and strategic importance of fighting fraud.

Misconception 1: Fraud is a Cost of Doing Business

Fraud is inevitable and just a cost of doing business. We know that many instances of fraud can be prevented with the right controls. Believing this misconception can lead to complacency, potentially increasing the organization's vulnerability to fraud.

Misconception 2: Small Fraud Doesn't Matter

Small fraud aren't worth the time and resources to investigate. We understand that small fraud can be indicative of larger issues and can also add up over time to represent significant losses. Ignoring this misconception can lead to where fraud is overlooked, leading to larger issues down the line.

Misconception 3: Fraud Management is a Standalone Function

Fraud management operates independently of other business functions. In reality, we need to collaborate closely with various departments, such as finance, operations, and engineering, to implement effective fraud prevention strategies. This misconception can lead to a lack of integration and communication between departments, creating the dreaded silos.

Misconception 4: Technology Alone Can Solve Fraud

While technology plays a crucial role in detecting and preventing fraud, it's not a silver bullet. Effective fraud management requires a combination of technology, well-designed processes, and the fraud fighter’s brain. Believing this misconception can lead to over-reliance on technology and neglect of other important aspects of fraud management.

Identifying Misconceptions

Where do you even begin identifying if there are key misconceptions? Most probably won’t feel confident enough to bring up the conversation directly with leadership.

^{(spoiler: you should. we’re all adults. Consider discussing them with leadership directly to ensure everyone has a clear and accurate understanding of your team's role.)}

If you're looking to assess leadership's understanding of your team's role without direct interaction, you'll need to rely on indirect methods. Here are some strategies:

Review Existing Communications

Look at emails, meeting minutes, and other communications from leadership that mention your team or your team's work. Do they accurately represent what your team does? Misunderstandings or inaccuracies could indicate a misconception.

Observe Decisions and Actions

How leadership makes decisions or acts in relation to your team can also reveal their understanding. For example, if they frequently bypass your team on projects where you should be involved, they may not fully understand your team's role.

Feedback from Other Teams

Other teams that interact with both your team and leadership can provide valuable insights. Without breaching confidentiality, you can gauge their perception of how leadership views your team.

Performance Reviews 

If your team's performance reviews include feedback from leadership, this can give you an idea of their understanding of your team's role.

Remember, these methods can provide clues, but they may not give you a complete picture.

Misconception Mistakes to Avoid

In the journey of reframing the perception of fraud management, it's crucial to be aware of potential pitfalls. These are the top three common mistakes that organizations often make, and understanding them is the first step towards prevention. Each mistake carries with it a lesson, a roadmap to better practices, and a guide to strategic decision-making

Ignoring Misconceptions

One of the biggest mistakes is ignoring misconceptions, hoping they will correct themselves over time. Misconceptions can persist and even spread if not addressed, leading to misunderstandings about our role. To avoid this, we should proactively identify and address misconceptions through education and communication.

Overcomplicating the Message

When trying to address misconceptions, we may overcomplicate their message with technical jargon or complex explanations. This can confuse people and even reinforce misconceptions. To avoid this, We should strive to communicate in a clear, simple, and relatable manner (KYS, KYA, KYM). Simplify complex topics to make people care.

Not Engaging with Employees

Another common mistake is not engaging with employees when addressing misconceptions. This can lead to a one-way communication flow and may limit the effectiveness of the message. We should build in a feedback loop and involve employees in the process. This can help ensure that the message is understood and that misconceptions are effectively addressed.

Reframing Leadership’s Perspective

In many organizations, fraud is often misunderstood or undervalued. It's seen as a cost center, a necessary evil, or even a roadblock to business operations.

The negative impact of not reframing the perception of fraud management can be significant. Without support, fraud teams can struggle to keep up with evolving fraud risks, leading to financial losses, reputational damage, and regulatory penalties - but you know that struggle.

Reframing the perception of fraud management is crucial.

When fraud management is seen as a strategic partner, we get the support and resources we need to effectively protect our organization. We can contribute to broader business objectives, such as improving customer trust and operational efficiency.

Let’s break it down simply. How can you you use this framework today?

1. Understand the current perception

2. Identify the desired perception

3. Identify barriers to change

4. Develop strategies to overcome barriers

5. Put your strategies into action

6. Monitor and adjust

Change takes time, especially when it involves shifting perceptions. Expecting immediate change can lead to frustration and could potentially derail your efforts.

If an organization communicates the importance of fraud management but doesn't follow through with actions (like training, resource allocation, engineering), it can lead to skepticism and resistance among the rest of employees.

Avoid this at all costs.

Ensure that your actions align with your messaging. Consistency is key in successfully reframing perceptions.

Learn. Build. Prove.

See you again next Friday in your inbox.

​Brian

PS… If you’re enjoying Bad Fraud Advice, will you take 6 seconds and forward this edition to a friend? It goes a long way in helping grow the newsletter (and bring more and more fraud fighters into the world).

→ Today's action step: Read back through this issue and figure out where you’re at. Find the relevant suggestions I laid out and choose just one to move forward with next week.

If you’re looking to build your career, there are 2 ways I can help you:

1. Monthly Fraud Fighters Networking Series: Make new connections, learn from the best in the field, and stay updated on the latest fraud prevention strategies. Meet five new fraud fighters each month, share your challenges, and expand your horizon.

2. that fraud Job Board: Have you ever wondered why there are no fraud and trust & safety job boards? Build the fraud career you deserve with job board and career resources.

What's happening Fraud Fighters?

Been pretty heads down this week doing a lot more doing than thinking this week. I guess that’s led me to feeling pretty tactical this week.

My pillars to building a fraud program from zero aren’t new to you but these thought-provoking questions of how I think are. Only use them if you’re ready to move your fraud program forward

Let's investigate further.

Read Time: ~3.65 Minutes

7 Pillars to Building a Fraud Program from 0

If we haven't met, let me share a bit about myself. I've built my career in fraud by developing fraud programs right from scratch. Throughout my journey, I've explored diverse industries and business models, gaining insights into multiple forms of abuse that businesses encounter.

To be honest, what fascinates me the most is observing how various businesses can be vulnerable to fraud.

The world of fraud is constantly evolving and poses a challenging problem that requires innovative approaches and a deep comprehension of its complexities. I have developed a strong appreciation for the significance of taking proactive measures to address this issue effectively.

Enough about me…

What were those pillars of building a fraud program I mentioned? I won’t make you dig them up. Here you go -

1. Identifying the risks across the user journey

2. Building a risk framework

3. Building your fraud stack

4. Organizing your processes

5. Balancing fraud vs friction

6. Building your squad

7. Establishing alignment

Identifying the risks across the user journey

5 approach based questions to understanding the user journey to identify potential fraud points

1. What are the top 3 stages in a typical user journey where fraud is most likely to occur?

2. Which are the top 3 signs of potential fraud to look out for at each stage of the user journey?

3. What are the 3 most important lessons learned from past failures in identifying fraud points in the user journey?

4. What are the top 3 data points or statistics related to identifying fraud points in the user journey?

5. What are the top 3 challenges most organizations face when trying to identify potential fraud points in the user journey?

Building a risk framework

5 approach based questions to building a risk framework to guide the fraud team's efforts

1. What are the top 3 essential components of an effective risk framework for a fraud team?

2. What are the 3 common challenges in developing and implementing a risk framework, and how can they be overcome?

3. What are the 3 key steps in building a risk framework for a fraud team from scratch?

4. What are the top 3 metrics to track the effectiveness of a risk framework in a fraud team?

5. What are the 3 most important insights or realizations that teams have after building a risk framework for fraud detection and prevention?

Building your fraud stack

5 approach based questions to constructing your fraud stack with appropriate tools and technologies

1. What are the top 3 must-have tools or technologies for building a robust fraud stack?

2. What are the 3 primary considerations when choosing tools and technologies for your fraud stack?

3. What are the top 3 mistakes to avoid when constructing a fraud stack?

4. What are the 3 latest technological advancements or trends in fraud detection that could impact the construction of a fraud stack?

5. What are the 3 benefits of integrating multiple tools and technologies into a fraud stack?

Organizing your processes

5 approach based questions to organizing processes to ensure smooth operations within the fraud team

1. What are the top 3 best practices for organizing processes within a fraud team?

2. What are the 3 most critical processes that need to be organized in a fraud team?

3. What are the 3 common mistakes fraud teams make when organizing their processes, and how can they be avoided?

4. What are the top 3 challenges that fraud teams face when organizing their processes, and how can they be overcome?

5. What are the 3 benefits of having well-organized processes in a fraud team?

Balancing fraud vs friction

5 approach based questions to mastering the basics of balancing fraud and friction

1. What are the top 3 types of fraud that a team should be equipped to detect and prevent?

2. Who are the top 3 experts in fraud detection and prevention that the team should learn from?

3. What are the 3 common mistakes made in fraud detection and prevention, and how can they be avoided?

4. Can you name the top 3 skills necessary for balancing fraud and friction?

5. What are the 3 most important lessons from past failures in balancing fraud and friction incorrectly?

Building your squad

5 approach based questions to developing a hiring process for assembling a skilled fraud team

1. What are the top 3 traits to look for when hiring members for a fraud team?

2. Can you share 3 examples of successful hiring strategies used by leading organizations to assemble their fraud teams?

3. What are the 3 key roles that need to be filled in a comprehensive fraud team?

4. Can you suggest the top 3 interview questions to ask potential fraud team members?

5. What are the top 3 common mistakes organizations make when hiring for their fraud team, and how can these be avoided?

Establishing business alignment

5 approach based questions to aligning your fraud team's strategy with your overall business objectives

1. What are the 3 key communication practices to foster alignment between the fraud team and other departments?

2. What are the first 3 steps to align your fraud team's strategy with your company's overall business objectives?

3. What are the 3 potential challenges in aligning fraud team strategy with business objectives, and how can they be addressed?

4. What are the top 3 metrics or KPIs to track to ensure alignment between fraud team strategy and business objectives?

5. How can you ensure ongoing alignment between your fraud team's strategy and evolving business objectives?

A guide, a roadmap, definitely not a test

This wasn’t supposed to feel like a test.

It was meant to be a guide, a roadmap to help you navigate the intricate world of fraud detection and prevention. The seven pillars I shared with you are not groundbreaking concepts, but rather a collection of thought-provoking questions designed to spark your thinking and propel your fraud program forward.

Remember, this is not a one-size-fits-all approach. Adaptation is key. Use these pillars as a starting point, but tailor them to your organization's unique needs and challenges. Embrace innovation and stay vigilant in the face of the ever-evolving landscape of fraud.

See you again next Friday in your inbox. Maybe I’ll be a little less tactical or maybe I’ll be just as tactical.

We’ll see what type of conversations I have next week…

​Brian

PS… If you’re enjoying Bad Fraud Advice, will you take 6 seconds and forward this edition to a friend? It goes a long way in helping us grow the newsletter (and bring more and more fraud fighters into the world).

What's happening Fraud Fighters?

I needed to tell you before you found out the hard way. You see, knowledge isn't just power. It's armor against the world's harsh realities.

So brace yourself. You need to hear these 2 harsh truths that every fraud fighter should be aware of

Let's investigate further.

Read Time: ~3.9 Minutes

The 2 Harsh Truths

I totally get it - you've thrown your heart and soul into your work. It's not just a job, it's who you are. You've spent enough weekends brainstorming to last a lifetime.

This isn't just about getting a paycheck. It's about pouring every bit of your dedication and determination into something you believe in.

So, of course, when you feel like you're being pushed out or overlooked, it hits hard. You're not just losing a role. It feels like a part of your identity is being stripped away.

Worse, you start questioning everything - the late nights, the sacrificed weekends, the countless hours.

You ask, "Was it worth it?"

The trust you've put in the organization begins to crumble, and it feels like you're standing on shaky ground.

So brace yourself. You need to hear these 2 harsh truths that every fraud fighter should be aware of

1. You are just a number

2. You are replaceable

Now, don't get me wrong. This isn't what I believe about you. But it's unfortunate many businesses feel this way about fraud fighters.

I needed to tell you before you found out the hard way. You see, knowledge isn't just power. It's armor against the world's harsh realities.

And in this case, knowing these bitter truths arms you against the unwelcome surprises the corporate world may throw your way.

This isn't the end, and you aren't powerless.

Quite the opposite. Now that you know the realities, you can use them. You can strategize, prepare, and combat the system.

But it won’t change by itself.

Navigating Complex Conversations

Before we find a path to a solution, it's crucial to understand how we got here. Throughout my career, I've encountered many difficult (even awkward) situations, but a few stand out.

Here are some 3 themes from convos that have left an impact on me:

Fraud Fighters are Disposable - Fraud Fighters become faceless entries on the balance sheet, easily targeted in cost cutting. This numbers driven view not only undermines fraud fighters but also risks the trust and reputation pillars upon which the business has built.

Prevention is Overrated - Fueled by a 'growth at all costs' mentality, sparks a provocative debate: Is the hefty investment in fraud prevention a vital shield or an unnecessary obstacle? Some leaders argue that pursuing rapid growth demands pouring resources into revenue-generating activities, suggesting that while a comprehensive fraud prevention team could mitigate risk, it could also drain the very resources that fuel growth.

AI and Automation will Eliminate Fraud - As tech grows, some leaders might believe that human fraud fighters will become obsolete. They may argue we're increasingly capable of detecting and preventing fraudulent activities. These models will work round-the-clock without any human biases or errors. They are not only more efficient but also more cost-effective in the long run.

Question: How often does this happen to you?

Have you ever found yourself in the midst of a conversation, five minutes deep, where you're left confused, struggling to understand why you’re in the middle of conversation?

It feels unsettling. As you try to make sense of the information being shared, you're left wondering:

What am I meant to do with all this?

Your mind works overtime, wasting precious minutes. The toll it takes on your productivity and mental clarity is significant, highlighting the importance of clear, purposeful communication.

This is what leadership is thinking when they’re on the receiving end as you talk about the latest fraud spike.

Most leaders are running from meeting to meeting and constantly using their brain. Naturally, their brain gets tired.

Help them out by framing the conversation. Make it easy for them to understand your value.

Wouldn’t it be great if we could start conversations about large and complex topics in a way that was always clear and easy to understand?

Like fraud. Or your career.

KYS. KYA. KYM.

Using this framework can help make it easy for leadership to understand, decipher, and more importantly care about fraud.

Have Clarity - This is the first pillar in successfully communicating the importance of fraud fighters. Clarity in your message ensures that there's no ambiguity about your team's role. With the harsh truth of being perceived as just a number, a clear message delivers the unique value your team brings to the business, making it easier for leadership to understand your contributions.

Understand Your Audience - Recognizing the needs, concerns, and expectations of your audience - the leadership - helps tailor your message to their perspective. With the second harsh truth of being seen as replaceable, understanding your audience can help demonstrate why you and your expertise are vital.

Position Your Message/Value - The positioning of your message plays a crucial role in emphasizing your team's value, impact, and/or solution. Well-positioned messages take into account the audience's priorities, the company's broader goals, and industry trends. Showcasing how your team's work aligns with or supports growth strategies can be a microphone of the strategic importance of fraud fighters.

If you are telling someone about an issue or problem, what do you expect them to do with the information? You either need help, advice, someone to take action, or you are giving the other person a heads-up.

If you’ve followed these steps, but received a question like one of these

“Why are you telling me this?”

“Is there something you need me to do?”

“I’m not sure what to do with that information.”

You’re having trouble framing the conversation and delivering your key message. It’s going to be hard to overcome those 2 harsh truths.

Let’s break it down simply. How can you you use this framework today?

1. Define the Topic

2. Clarify the Intent

3. Craft Concise Key Message

4. Provide Supporting Evidence

5. Conclude and Check Understanding

KYS. KYA. KYM.

See you again next Friday in your inbox.

​Brian

ps fraud loves acronyms. any guesses on what those acronyms stand for?

First Party Fraud: Vulnerabilities Across the Customer Journey

Brian: [00:00:00] Thank you everyone. Welcome fraud fighters and people sitting here who say, I'm not quite a fraud fighter. You are today. So today we're gonna shed some light on first party fraud and I'm honored to be your moderator. But before I introduce myself, love to bring our lovely experts to the stage.

Maria: Good afternoon. My name is Maria. I am a senior threat, threat intel manager at company called Bill. We are a business payments provider. We provide three main payment offering services, so issuing spend management, for business expenses, acquiring for merchants to be able to receive payments and not payable solutions for, for.

Businesses to be able to pay their vendors, and my team is mainly responsible for doing root cause analysis for any fraud attempts that we encounter on our platform and provide a deep, grounded understanding to our remaining risk, strategy and analytics and operations team in terms of how the [00:01:00] per is perpetrated and, all the kind of steps that the frauds go through to make that happen.

Yigit: All right. Hard to beat that., I lead, the fraud and risk products for Secure. secure is an item verification and fraud prevention, platform. We serve, a lot of great names here. I'm sure a lot of you are customers. And hopefully, the rest of you will be customers soon. But, my team is responsible for our, flagship Sigma scores, risk solutions for, Point a risk assessment for email, phone, and address.

Also, device intelligence, behavioral analytics, as well as the data and machine learning platforms for, our internal users. I'm a data scientist by heart and a technical person,

Brian: normally always the battle of data versus everyone else in engineering. I am Brian Davis, head of trust and safety. Your moderator today for Dodgeball Fraud Stack as a service.

So your single integration automation platform bringing together. Lovely vendors all in one place. So non-technical people, me can drag and drop everything. [00:02:00] Today we're gonna talk about a simple but complex topic. it's often overlooked until it's too late first party fraud, and there's nothing friendly about it.

So today there's many different scenarios we can walk through of examples of first party fraud. Today we're gonna talk about. Bust outs. So for the ones that are familiar with or not so familiar with bust outs is when an individual comes to your site, ultimately sets up an account, starts to use it in seemingly normal patterns, behaviors, and ultimately, one day these thought to be good users turn bad.

So Maria, what are you looking out for? In these types of scenarios.

Maria: So it is something that is really hard to discover in the beginning when these businesses would normally sign up. And we're in an [00:03:00] interesting position because we provide services to businesses. So we don't, we don't onboard consumers. every business that signs up has to be operated by an individual.

And so we often don't see, like, you know, this happening right up front in the beginning and it's not really easy to discover. So businesses will sign up. They will pass the K yb because the business does exist. It's real on paper, and it will also be operated by an individual that is associated with this business passes the kyc.

They can provide any requested information upon request because they do in fact, Exist and they do in fact have this information, registered in its field and then they start utilizing the account. And this, again, this scenario is most applicable to our issuing service. And so we would issue a credit line to that business and they would start utilizing it normally, normal business expenses over a period of time that fit with the industry that they're a part of.

And over time they will. Kind of, you know, make their significant footprint [00:04:00] on our platform. They'll, they'll have many, kind of entities that will create, and at some point in time they bust out, they default and they stop making payments. And we, kinda those points in time, that's when we kind do the discovery and we do the retrospective and we do the raw analysis and the.

We learn from these. yeah.

Brian: And Yigit. So is this a credit risk problem, a fraud risk problem? How do you really categorize this to ultimately educate the people you're working with?

Yigit: I think this is an amazing question and I think these things get coupled together quite often. It's easier to write it off as credit risk because there's some

yeah, exactly. And when you, when you do that and when you don't really understand, there is no intention to pay and this was never a question of, an ability to pay. It's an intention to pay. That changes the picture. So if you don't define the problem correctly, if you do not measure the problem correctly after that, you won't be able to mitigate the problem accurately either.

So I think [00:05:00] the first thing I tell, our prospects and customers whenever we are working with them, know what you're up against. Identify the problem correctly, let's measure it correctly, and let's work together to, fix the issue correctly.

Brian: So there's complexities of a user comes through. Your platform.

They, we talk a lot here already. Know your customer. Know your customer. Know your customer. We think we know our customer when they're coming to the door, they pass kyc, they pass kyb, they go through i d V. What are you looking at and how, like what are the challenges at that point of the user journey for you?

Maria: So a, again, it like at the point in time when they're just coming through the door, it's really hard to differentiate them from. What a good, good business is. Good, good prospect versus someone who has got malicious intentions. And in the instances that we've encountered and investigated, again, looking in retrospect, these are not like sole actors.

These [00:06:00] are organized groups working together and they have investments in the scheme that they're orchestrating. So they take time to stage this. They, they time to build it out. But essentially, What ends up bringing them to light is how they end up moving the money around. Right? So they, they, they make payments that.

Appear to be business related expenses, but these payments are going for to towards entities that they operate. So they're essentially moving funds around. And so what does help bring them to light is kind of being able to cluster where payments are being routed by a certain group of companies to a certain number of merchants that are kind of isolate.

No one else is transacting with these merchants. Except for this particular group.

Brian: So you're trying to cluster them in a sense and pull together different data points throughout the user journey to ultimately link them. What are some of those data points? What are you specifically looking [00:07:00] at when you go through a retro and you're going back through that user journey of how did this user one get on our platform?

What were the steps of that? And then how are they actually using our platform? Are they taking, are they. Immediately getting on the platform and spending transactions for a week, six months, two years. What type of patterns are you seeing for this type of life cycle?

Maria: There's definitely a range. And so, you know, going backwards when during their kind of root cause and how that transpired, we see a range from, you know, six months to a year or even more.

And so they come on sets by sets, they bring on companies together. The companies aren't necessarily connected in, in like any sense in terms of like devices or ips, so they're seemingly unrelated. But when they do start to transact, there is pattern forming in terms of. Multiple businesses are peeing to.

A similar merchant, and this merchant is not [00:08:00] receiving, you know, no, no one else is paying to this merchant. I think that's kind of one of the main things that kind of can really isolate them because as, as we mentioned, they're using real information. They're using, they exist on paper. And we're, we're in a digital space, right?

So we can't physically go to the business location and verify is there actual, like business, like if, for example, if it's trucking company, you know, like can, can we go to their garage and see like, do they have trucks? Do they have, you know, do they actually like, Executing are they actually functioning?

So we have to rely on a lot of the like, open source information and open source information. They know what they need to build out to make their profiles look like they're existing and they're real, and they're functional. To to, to make this kind of, to stage an orchestrate, this con,

Brian: it's long going and sometimes feels like it's never going away.

Yigit when you're working with some companies or even in your past life of digging through different data and, and identifying patterns, what are you using and looking at to help educate internal stakeholders or customers and clients?

Yigit: That's a great [00:09:00] question. I think, there are different approaches to looking at this problem and, more coordinated crime ranks are very prevalent and there are more sole actors sometimes that we also see acting out and there are different levels of sophistication.

And I always say, let's categorize the problem and let's collect the low hanging fruit first. So when you were to take a look at, even the email addresses some of these, frauds with create. They would be very open about it. Everything would match. But even you look at the email handle, you would see something like bust out tommy gmail.com and it's so in your face.

It's more like a day or to you that come and get me. Everything matches and my credit score is amazing, so open me an account. But, so all those types of. Things you can, you can do a great assessment for a person, but more sophisticated ranks, you need to take a look at lockstep behavior, as I would call it.

So you would see not direct connections between these individuals or businesses You would see if you were to build a graph and build these relationships between different entities, you would find weak [00:10:00] connections. You would see coinciding events happening. And when you look at different, times the application stage, when you look at a couple days happening, you would see weekly related things coming together and clusters around it.

And you would see transactions colluding together over time. Not the same entity, but it looks like in AML structuring type of a pattern, paying each other and you would see busting out behavior happening all at the same time. So looking at it, You hate the word I know. Holistically and really trying to understand, what's happening in your portfolio.

Not on an individual basis, but as a whole, trying to find those, clustering behavior and lockstep behavior, temporal patterns. That's, what is very important to take a look at.

Brian: Maria, you're an operator, so you're going through these investigations or your teams are going through these investigations.

You find these clusters, you find these patterns tactically. I feel like people wanna know, what do you do with that information? Like, alright, we think we found something's [00:11:00] busting out about to bust out, or similar types of patterns of money moving to these little bits of groups or clusters. What does, what do you and your team do?

Maria: So something that we start, once we have a thread to pull on is we, we would describe it as like kind of sweeps. We sweep our entire platform to see if there are any similar type of entities that are currently existing that we can identify through any of the traces that we found as a result of pulling a single string.

So like when someone started going bad, now we start pulling the thread in and we we start looking by. You know, clusters of companies that are sending up within a particular closed geographic region, because while these are kind of these organized groups, they are organized, they. The, the, the main ones that we've tackled are working closely together.

Like, like they actually know each other in person. They live nearby. And so we start looking at close geographic locations, similar industries. So once they, they kind of, they, they pick certain industries for the type of businesses that they kind of execute this con [00:12:00] with. And so we start looking for location industry.

Time range for signup and the types of transactions we've seen based on the merchants, do I see if we can kind of identify additional entities and utilize this information that we uncover to subsequently catch them as they continue trying or catch similar type of vectors. But again, the important point that you kind of important point you made earlier around kind of like identifying this and.

I isolating. This is like a fraud related activity because you need to look deeper. Some, it's very easy to miss if you are gonna write this off as a credit loss because then you may not look deeper to see what's the actual malicious criminal intent, which based on everything that we are able to combine together there, there is, there appears to be

Brian: when do you know the good users go bad?

When, how do you figure out that there is. Actual some type of malicious intent or that they never had intent to pay back.

Maria: That's not always gonna be blatantly, obviously in front. Like, oh, [00:13:00] okay, this one's gone bad. They stopped paying. They're bad, they're fraudster. Definitely not as, kind of black and white as you would like it to be.

But again, when you start looking deeper at an account that's defaulting and start looking at. Like what was their behavior like before? Who were they transacting with? You find connected entities based on the things that I just described. It forms a picture, and then you start doing a little bit of ENT research and you find that.

They went after American Express and they went after pnc, and PNC had sued them and as a public lawsuit against one of their associates. This may not have been available to you when they were onboarding because maybe that suit was still in process or maybe that associate never opened a business credit line with you.

But, you just, again, forms that picture that this is not, The chance of, I lost my job, my business closed. I can't pay

Brian: Yigit. Same goes for you. How do you start to understand when good users go bad? You come from a little bit of a different perspective today of seeing the breadth of your customers, so your perspective, similar to Maria's, [00:14:00] but kind of a different type of scope to it.

Yigit: Yeah. I think there are, again, two, two ways of looking at this, being proactive versus reactive, and finding, to your point, a, the first, threat of what's going on. Really what we see is these actors might be acting out in different. Different places. So we might be seeing these actors, running a malicious activities in one company, and they're doing that in another one at different times in coordinated times.

Really trying to triangulate those points and really try to see what else is going on, not just looking at one bad event. When we catch that, looking at it, okay, what more can it be running our investigations? And running our models around the holistic view of what's going on is the most important thing that we are trying to do.

Really having a consortium of seeing all this behavior going together is an amazing reactive measure. It doesn't always help being proactive, but [00:15:00] first part, the fraud problem is such a difficult problem, complex problem to solve in some very sophisticated cases. It's really. Hard to become proactive. So the best thing you can do is to react as soon as possible and cut the losses sometimes.

Brian: So this happens throughout the user journey, and there's different teams that work. Marketing, product engineering payments, you can kind of name almost everyone, but they care about different parts of the user journey. How do you work with them to ultimately, they're your stakeholders. You need their support, you need their influence, and that's one way that I do see of.

Helping try to transition a little bit more to proactive versus reactive. We can't do it alone. So do you have any examples of working with some of those other stakeholders internally to help kind of push that through to get a little bit more closer to the proactivity?

Maria: Yeah, so I think. That's an interesting challenge because what happens is we are trying to [00:16:00] balance our growth.

And again, these are seemingly legitimate clients coming in, looking up, you know, to sign up, bring us business, and so. One of the focuses is for education and awareness that this can happen, this, this, this can happen. And this does not always, this is not always gonna translate into a good, customer that's gonna gonna contribute to our growth instead of causes harm.

And so, ensuring that their teams are aware of this happening, educating of like, If you've got customers coming in and they're all coming from the same area, they're really pushing for higher credit limit. And, you know, you're, you're seeing this kind of back to back, definitely be weary, beyond the lookout, in, in the conversation.

Brian: So on the education side of things, that's one piece. Internally, externally, especially when it comes to first party fraud, it's almost set up that sometimes merchants are. Guilty until proven, and you really have your backs against the wall. So what can you do for the people who come to your platform?[00:17:00]

Either, let's start with you of like, how do you work with customers of helping them educate their end users that this ist a type of abuse, this is, and can be considered fraudulent and criminal, to prevent them either being used by these organized crimes or just the ignorance and naiveness that they're, they think circumvention is okay.

Yigit: We approach this from both a qualitative and quantitative perspective. Really there's, a way of really showing our customers how these events are happening, what the signals are, and how these signals are not really related to a, a enable to pay. Really, if we were to take a look at some of the indicators about ability to pay, there is nothing to do with it.

And, when you look at some of these things coming together, That story becomes very obvious, to, to people, okay, there's something funky going on. Not at first sight, but when we look at this from when we take a step back and take a look at this activity, there's something going on that's the [00:18:00] qualitative aspect and quantitative aspect of things, but really quantifying after defining, quantifying how big of an impact there might be.

This doesn't happen very often, especially very sophisticated ones. That's why this might be under the radar, but when it happens, it is, it is massive. When it's massive. When you think about how it can hurt your business and it can hurt it, in a very, very bad way, let me say, then you get your attention.

You need to, we try to arm our, customers with information so they can go and tell the story and really warn the business against what they're up against.

Brian: Definitely an easy way to find some budget. Internally when things like that happen, we are running up to the end of our time. I appreciate you all coming to our panel of fighting first party fraud and uncovering the vulnerabilities across the rest.

Thank you, Yigit. Thank you, Maria. I appreciate it.

How to Prioritize Tasks Effectively in Fraud Management

Remember, in fraud management, it is crucial to prioritize tasks that will help you prevent, detect, and manage fraud more effectively. These tasks should always take precedence over 'busy work' that does not contribute to these goals.

Step 1: Understand the Concept of 'Busy Work'

Before you can prioritize tasks effectively, you need to understand the concept of 'busy work.' Busy work refers to tasks that keep you occupied but do not necessarily contribute to achieving your key goals or metrics. In the context of fraud management, this could include administrative tasks or repetitive tasks that could be automated.

Step 2: Identify Your 'Busy Work'

To start prioritizing effectively, you need to identify which tasks in your daily routine constitute 'busy work.' These are the tasks that take up your time but do not move the needle in terms of your fraud management goals.

Step 3: Define Your Key Metrics and Goals

To prioritize your tasks, you need to have a clear understanding of your key metrics and goals. These are the end results that you want to achieve in your fraud management role. Your goals could be related to reducing fraud incidents, enhancing system security, or improving fraud detection accuracy, among others.

Step 4: Evaluate Your Tasks Against Your Goals

Once you have defined your goals, evaluate each of your tasks against these goals. Ask yourself whether each task contributes directly to achieving your goals. If a task does not contribute to your goals, it should be lower on your priority list.

Step 5: Implement 'Guardrails'

'Guardrails' are essentially rules or guidelines that help you stay focused on your key metrics and goals. They help you decide which tasks are worth your time and which are not. Implementing guardrails could involve setting rules about the type of tasks you will focus on, the time you will allocate to different types of tasks, or the tasks you will delegate or automate.

Step 6: Regularly Review and Adjust Your Priorities

Prioritizing tasks is not a one-time task. It should be a continuous process. Regularly review your tasks, goals, and priorities. As your goals evolve, or as you achieve your existing goals, your task priorities will likely need to change too. Regular reviews will ensure that your task priorities are always aligned with your current goals.

How to Translate Fraud Taxonomies into Prevention Strategies: A Comprehensive Guide

Understanding various types of fraud through taxonomies is one part of the equation, the next crucial part is to translate this knowledge into effective fraud prevention strategies. This guide will walk you through the process of transforming your fraud taxonomy into practical, actionable strategies.

Step 1: Understand Your Fraud Taxonomy Before you start, make sure you have a thorough understanding of your existing fraud taxonomy. It should break down the types of fraud your organization could encounter, with each type clearly defined and categorized. This forms the basis of your prevention strategies.

Step 2: Evaluate Existing Prevention Measures Evaluate the prevention measures currently in place for each type of fraud listed in your taxonomy. Identify the strengths and weaknesses of these measures. This will provide a baseline from which you can build more comprehensive strategies.

Step 3: Identify Potential Fraud Risks for Each Category Next, examine each fraud type in your taxonomy and identify potential risks associated with them. Consider how fraudsters could potentially exploit your systems, and what kind of damage each fraud type could cause. This analysis is key to creating effective prevention strategies.

Step 4: Develop Specific Strategies for Each Fraud Type Based on your risk assessment, develop specific prevention strategies for each type of fraud. These strategies should aim to minimize the identified risks and prevent the occurrence of the fraud. Strategies could include stronger authentication methods, enhanced monitoring systems, or improved staff training.

Step 5: Integrate Your Strategies into Your Existing Systems Once you have developed your prevention strategies, the next step is to integrate these strategies into your existing systems. This could involve updating your software systems, implementing new policies, or introducing new procedures.

Step 6: Test Your Strategies After integrating your strategies, it's important to test their effectiveness. This could be done through system tests, audits, or even mock scenarios. Testing will help you identify any gaps or weaknesses in your strategies.

Step 7: Monitor, Review, and Refine Your Strategies Finally, continuously monitor your strategies to ensure they are effectively preventing fraud. Regularly review and update your strategies in response to new fraud types or tactics identified through your ongoing analysis of your fraud taxonomy.

How to Create a Fraud Taxonomy: A Step-by-Step Guide

Understanding and identifying fraudulent activities is a crucial aspect of security and risk management. One effective way of organizing fraud types is by creating a taxonomy. This step-by-step guide will walk you through the process of creating a fraud taxonomy to better define, understand, and tackle fraud.

Step 1: Understand the Concept of Taxonomies

Before creating a fraud taxonomy, it's important to understand what a taxonomy is. Taxonomy is a system of classification used to organize and categorize complex structures into simpler, understandable formats. In the context of fraud, it involves categorizing different types of fraudulent activities.

Step 2: Identify Different Types of Fraud

Begin by identifying the various types of fraud that your organization might encounter. This could include credit card fraud, identity theft, wire fraud, check fraud, or internet fraud, among others. This identification is typically based on your industry and the specific threats that your organization faces.

Step 3: Categorize the Identified Fraud Types

After identifying the different fraud types, group them into broad categories based on their similarities. For instance, you might have a category for financial fraud, which would include credit card fraud, check fraud, and wire fraud.

Step 4: Define Each Fraud Type

Next, provide detailed definitions for each type of fraud. This includes the tactics used by fraudsters, the conditions that enable the fraud, and the signs that the fraud has occurred. Definitions should be clear, precise, and easily understandable.

Step 5: Construct Your Taxonomy

Now that you have your fraud types categorized and defined, you can construct your taxonomy. This can be a simple hierarchical structure with broad categories at the top and specific fraud types beneath them. You can also create a visual representation of your taxonomy for better understanding and communication.

Step 6: Review and Update Your Taxonomy

Fraud tactics evolve over time, so your taxonomy should not be static. Regularly review and update your taxonomy to include new fraud types and tactics. Updating your taxonomy helps to ensure that it remains a relevant and effective tool in your fraud management strategy.

Creating an experimental plan is an essential step in conducting any scientific or business study. The right plan can help you determine the effectiveness of different approaches and identify the best strategies for your objectives. This step-by-step guide will help you establish an effective experimental plan.

Step 1: Define the Objectives You Want to Achieve Begin by identifying and clearly defining the objectives you want to achieve with your experiment. These objectives could range from understanding customer behavior, identifying effective business strategies, improving product quality, or enhancing service delivery. Ensure that your objectives are SMART - Specific, Measurable, Achievable, Relevant, and Time-bound.

Step 2: Choose Fraud Taxonomy Fraud taxonomy refers to the classification of fraudulent activities you're looking out for in your experiment. Depending on the nature of your experiment, you might need to watch out for different types of potential fraud. Categorize these fraudulent activities and incorporate preventive measures into your plan.

Step 3: Select Customer Checkpoint Customer checkpoints are important in tracking user behavior and interactions with your service or product. It could be a particular stage in your product usage or a point of contact with your service. Your checkpoints should be chosen based on your objectives and the data needed to achieve them.

Step 4: List the A/B Experiments A/B testing, or split testing, is a fundamental component of any experimental plan. This involves comparing two versions of a variable to determine which performs better. Create a list of all the A/B tests that you intend to run in the course of your experiment.

Step 5: Create Roadmap with Key Dates Having a clear roadmap for your experimental plan ensures that you remain focused and organized. Your roadmap should contain all the key dates for your experiment, such as when to start, end, and review each A/B test, as well as when to analyze results and implement changes based on these results.

Step 6: Allocate Resources Determine what resources are required to effectively carry out your experiment. This could include personnel, equipment, time, and finances. Once identified, allocate these resources efficiently to ensure a smooth run of your experimental plan.

Step 7: Organize Tactical Timeline Your tactical timeline should detail the specific steps you'll take to execute your plan, with a specific order and timeframe. This timeline will keep you on track, ensuring you're meeting deadlines and milestones throughout your experiment.

Step 8: Measure and Report Lastly, it's crucial to measure the results of your experiment and report them accurately. This includes keeping track of all data, interpreting the results, and presenting your findings. Your report should be clear, precise, and insightful to provide valuable feedback for future planning and decision-making.

What's happening Fraud Fighters?

I’ve been finding a lot of my inspiration lately from conversations I’ve been having throughout the week. They make me think back to these little moments in my journey and what lasting impact they’ve had.

Maybe one day I’ll share what sparked this rant and trip down memory lane.

We’ve all had a Spreadsheet leader. I was one. But realized I was more than a number babysitter.

Let's investigate further.

Read Time: ~4.21 Minutes

The Spreadsheet Manager

Every journey starts with a single step. Mine started within the comfortable confines of spreadsheets filled with numbers and metrics, as a fresh-faced Fraud Manager eager to make my mark.

My values at the time were simple, almost textbook.

I was focused on how many cases my team completed, how much fraud we managed to block, and our average handling time for each case. After all, these were the measurable and quantifiable indicators of success that seemed to be the industry standard.

With each case that passed through my hands, each fraud incident we successfully countered, I found my perspective broadening. The conventional metrics I had initially clung to started to feel inadequate, too surface-level to show the depth and complexity of our mission.

The spreadsheet that was once my constant companion started to look different. Instead of merely tracking cases completed and fraud blocked, I found myself analyzing patterns and identifying trends. I found excitement in the patterns we uncovered, the innovative solutions we recommended, and the improvements we championed in our fraud strategy.

The lens through which I viewed my work was evolving, shifting from a microscope to a wide-angle lens.

The transformation was not overnight. It was a gradual evolution, marked by trials, errors, insights, and revelations. But I could feel it – I was no longer just an operationally-focused Fraud Manager who gauged success by Fraud Fighter "activity."

I was becoming something more - strategic - measuring the "business impact" of our actions.

This wasn't just a change in metric. It was a complete mindset shift.

Spreadsheets, Oh Spreadsheets

They were the go-to tool for many fraud managers starting their journey. They offered simplicity and accessibility, making them the trusted sidekick for organizing and analyzing data.

But let's not forget the allure of those activity-based metrics. They kept us focused on output. It seemed like the holy grail of measuring productivity and effectiveness.

You boss comes to you and asks what’s fraud look like. You panic and you go back to your default. But why?

1. It’s Simple - Traditional metrics like cases completed, fraud blocked, and average handling time are straightforward and easy to understand. Stakeholders without a deep understanding of fraud management can easily grasp these concepts. They provide a clear, simple way to demonstrate progress and effectiveness in fraud management.

2. It’s Legacy - Many organizations have longstanding structures and processes in place. These structures might require related data for reporting or other operational needs. Deviating from these established practices can be seen as a disruption or could require significant changes in systems and processes.

3. It’s Quantifiable - Cases completed, fraud blocked, and average handling time are easily quantifiable and measurable metrics. They provide concrete numbers that can be tracked over time, compared to past performance, or used to set future targets. Business impact, on the other hand, can be more abstract and harder to quantify, making it more challenging to track and report.

4. It’s Immediate - Traditional metrics offer a quick snapshot of the current operational efficiency of the fraud team. They can be used to identify immediate problems, such as a sudden increase in fraud cases or a slow-down in handling time. While business impact metrics provide a deeper understanding of the overall impact on the organization, they might not provide the immediacy required to manage day-to-day operations.

5. It’s Pressure - Leaders may be under pressure from stakeholders to demonstrate short-term results or progress. Traditional metrics can often show a more immediate impact, as they tend to focus on direct outputs like the number of cases handled or blocked. In contrast, business impact metrics often represent longer-term strategic outcomes, which might not align with a need for immediate results.

You might feel the pressure or find it’s the easiest way to start bossing a team. But you run a higher risk of

• Narrow focus on legacy metrics

• Reactive fraud management

• Poor strategic alignment

• Lack of team growth

• Inability to innovate

Your team is more than just a number.

Manager to Leader

My journey as a Fraud Manager began much like any other, with my eyes firmly fixated on the numbers: cases completed, fraud blocked, average handling time. These were the pillars of my success, or so I thought. However, as I immersed myself deeper in the field, I began to realize that this was just the tip of the iceberg.

I started to see the role of a Fraud Manager differently.

I wasn’t just a caretaker of activity-based metrics, but as a strategic visionary tasked with far greater responsibilities.

It meant stepping away from simply being an operations-focused leader to embodying the role of a strategic guide.

By focusing solely on activity-based metrics, you risk missing the bigger picture. Yes, completing cases and blocking fraud are important pieces of your job, but they're only parts of a much larger puzzle. You'll need to look beyond these and delve into the underlying causes of fraud, unveiling patterns and recommending solutions that address the problem at its root, not just its symptoms.

The transition from gauging "activity" to measuring "business impact" will be your guide. It will pave your way from being a manager to becoming a leader—a leader who impacts, who strategizes, and who shapes the future of fraud management.

Not sure where to begin to break free from the spreadsheets? Let me break it down simply

Step 1: Understand the big picture of your org's goals, strategies, and KPIs.

Step 2: Expand your scope to include full risk of fraud on your organization.

Step 3: Dive into your fraud data to uncover underlying patterns and trends.

Step 4: Establish new metrics that align with your strategic goals.

Step 5: Encourage a strategic mindset in your team.

Step 6: Communicate your strategic vision to other stakeholders in the org.

Step 7: Implement strategic initiatives based on your plan.

Step 8: Regularly review and refine your progress towards your strategic goals.

Now it’s your turn to take action.

See you again next Friday in your inbox.

​Brian

What's happening Fraud Fighters?

I talk about optics management all the time. Honestly it’s something I find myself bringing up in conversations almost daily. It's not just a buzzword, but a significant element that shapes our personal and professional interactions, relationships, and ultimately, our reputations.

It's only fair that I share this concept with you all, as it holds the potential to become an incredibly valuable tool in your arsenal. Whether you're a seasoned executive, an emerging leader, or someone who simply wants to cultivate better relationships in and out of the workplace, understanding and practicing effective optics management can make a substantial difference.

Let's investigate further.

Read Time: ~4.11 Minutes

Protecting Your Role

If I could teleport back to the inception of my managerial journey, there's one priceless piece of wisdom I would impart to my younger self – the absolute necessity of safeguarding your role.

So, why would fraud managers require such safeguarding?

Private discussions take place behind the closed doors of your office, particularly during difficult times. If you're not effectively demonstrating your work, especially when your team members are underperforming, your competence as a manager may be questioned.

Instances that can diminish faith in managers include:

• Major adjustments that significantly affect investigation output

• Unestablished trust between a manager and their boss – for instance, when a new executive joins or a manager transitions to a different team.

• Underperforming team members blaming the manager for their failures

Without a system to highlight their contributions, a manager can easily become the scapegoat when things take a downturn.

To avoid this, you should develop a system that

• Promotes effective self-management

• Ensures accountability among team members

• Safeguards their contributions

Similar to how team members need a system to prioritize tasks and follow up on crucial matters, managers require a system to track each member's developmental focus and handle pending follow-up tasks.

Mirror, Mirror on the Wall

But how can you tell if you need to improve your system?, Here are a few questions I think about:

• How often do I struggle to remember follow-up tasks from one-on-one meetings with my team?

• If my boss requested an immediate conference call to update on the developmental areas for each of my team members, could I do it with minimal to no preparation?

• If someone asked a team member and me about their developmental areas, would our answers align?

If you're spending too much time grappling with remembering your team members' development areas or tasks needed for their progress, or if there's a discrepancy between your understanding and your team member's, a self-management system could be the solution.

People mirror your actions.

We all have that one manager we think of that was never prepared (and on-time if we’re lucky). I’m sure you’re thinking of one specific person…

Turning up unprepared for a one-on-one might signal to your team that they can slack off or show up unprepared for meetings.

If you are well-prepared and follow up on action items and development planning, your team will reciprocate your approach.

Also, if your team is not making the most of your one-on-one meetings – they're not completing tasks or sharing emails or calls for guidance, etc – and you're letting it slide, you're not doing anyone a favor.

By maintaining a system to monitor action items and key points for one-on-ones, you’ll:

• Elevate your expectations from your team – the principle of "inspect what you expect". If you don’t verify your team’s completed work, they may question the purpose or disregard the tasks altogether.

• Spot problems early – if team members have repeatedly missed action items in past one-on-ones, it needs to be addressed.

• Encourage a culture of confidence among your team – without a method to track progress and development, you risk losing your way. A system that keeps tabs on team development, the next steps for growth, and past progress can foster confidence within your team and strengthen your partnership.

Minor enhancements can greatly contribute to gaining control over life.

Some of the most stressful encounters with team members have provided the best lessons for me.

But I think you can tell, it didn’t happen by accidentally

It was the system.

The Art of Optics

Optics management is all about how your actions, decisions, and communications are perceived by others. It influences your personal and professional brand, playing a crucial role in how you're seen and understood. It's not merely about what you do but about how what you're doing is interpreted. This idea extends from major corporate decisions all the way to individual behaviors and interactions.

When effectively managed, optics can build trust, enhance credibility, foster better collaborations, and create opportunities for growth. It can shield you from misunderstandings or misinterpretations by ensuring you're viewed in the best possible light by your peers, superiors, or external stakeholders.

However, the key to optics management isn't about crafting a false image. It's about authenticity, clear communication, and being attuned to the perceptions and feedback of others. It's about being proactive, maintaining a consistent professional persona, and being able to adapt based on changing circumstances and feedback.

Understanding and applying the principles of optics management is a tool that can serve you well, regardless of your career stage or aspirations. As we navigate through our own fraud fighting journeys, it's worth keeping in mind that it's not just what we do that matters, but also how we are seen doing it.

See you again next Friday in your inbox.

​Brian

What's happening Fraud Fighters?

Not sure what happened last week…

I was out on a much deserved break and thought I had everything scheduled properly. LinkedIn worked just fine. Not entirely sure what happened, but here we are. How about we just pretend nothing happened and we just move forward? Cool?

I received one question privately this week that caught me off guard and made me really have to think how I answered it. Why not let you all in on what I was thinking

Let's investigate further.

Read Time: ~3.57 Minutes

Tales of an Operational Fraud Leader

I am an operational Fraud Leader and proud to be so.

How operational I am though depends on the business priorities and on my capacity. But I will never stop being somewhat operational.

Throughout my career, I still find myself in the queues from time to time. It helps me keep my investigating skills sharp, but more importantly understand what’s really happening as a front-line fraud fighter and how they’re really impacting the business.

What have I learned getting so close to the detail? I have come away with 10x more ideas for things we can start trying and do better. Sometimes it’s the unglamorous work that has the biggest impact.

If you needed more than that to convince you to roll up your sleeves, here are a few more reasons:

Hands-On Experience - Continuously engaging in frontline tasks allows the leader to keep their skills sharp and stay up-to-date with the latest fraud trends, techniques, and prevention tools. This allows them to make more informed decisions and provide better guidance to their team.

Leadership by Example - By participating in frontline investigations, you set a positive example for your team. It sends the message that every role and task is vital, regardless of one's position in the organization.

Understanding Front-Line Challenges - Staying involved with frontline investigations gives the leader a first-hand understanding of the challenges and obstacles that their team members face. This can result in more effective problem-solving and process improvement.

User Journey Risk - An engaged leader can spot inconsistencies, loopholes, or weaknesses in the fraud controls that might be missed otherwise. By being part of frontline investigations, you can quickly act upon these findings and strengthening the overall fraud prevention strategy.

Guardrails or Busy Work

Now we all know as fraud fighters nothing is ever as simple as this. I think it is so critical in fraud management as you can so often get distracted with other tasks and ‘busy work.’ But if it doesn’t align with your north star (or key metrics) then you really need to scrutinize why you are doing them.

Fraud, arguably more than any other department, needs strict guardrails on how it supports the rest of the company. These guardrails are also important to how fraud fighters prioritize their work.

You can easily spend 100% of your time on busy work that doesn’t move the needle.

I’m sure you are no stranger to joining a company where it was 100% busy work and queue work. Ultimately this led to unpredictable and limited revenue contributions and effectiveness.

In order to create real impact and change, you need to show leadership a roadmap for hitting business objectives and get this signed off upfront.

This then becomes your key tool for pushing back on tasks that don’t impact directly on your end goal.

You should still leave yourself and your team with unplanned capacity because after all we do work in fraud. This can be used for unplanned but critical tasks and fires that need to be put out.

One Question That Made Me Think

So, how do you do it? How do you talk so openly to a crowd?

I had to stop for a second.

How do I actually do it - especially when I don’t always feel at ease even though it may seem like I can talk so openly to a crowd.

I’ve built the trust internally, but how do you make the shift to winning over a public audience?

You may have noticed that I’ve begun creating different types of content with most of my content on LinkedIn. I realized there was added benefit of turning myself from an private subject matter expert to a public subject matter expert for our fraud fighting community. I could repurpose a lot of the conversations I was having on the daily.

That’s advice I’d give anyone in my position, don’t be afraid to use the content more than once. I often change up the same content but write in different formats or from different perspectives to keep it fresh.

I was already speaking as the subject matter expert internally and with customers from my role at Dodgeball. It’s a key part of our strategy, and I consider it a cheat code for vendors who hire fraud fighters who have done the job before.

So because I can repurpose my conversations and teachings, it’s not much more effort to start writing my posts. It actually made posting easier as I had a springboard of ideas. No longer was a blank page a problem for me. The first time I tried to write a post I feel like I stared at LinkedIn’s question ‘What do you want to talk about?’ for days before I started typing anything.

I could pick parts of my conversations I had previously had that had interest and build on it.

There are 4 things that I remind myself as I continue to develop my own voice as a public subject matter expert

• What’s my why?

• Be consistent

• Be genuinely me

• Be ok learning in public

I treat LinkedIn like a conference, but instead of submitting a proposal, crossing my finders, and hoping I get selected.

I grab the mic and start talking.

What’s New This Week?

This week’s Bad Fraud Advice was inspired by a few questions I privately received this past week, so I want to try something new moving forward.

Let's tackle the biggest questions from the fraud community. Every question comes from an anonymous source. These are the questions fraud fighters have, but are afraid to ask.

Submit your anonymous question here

Recently, I jumped on the mic with Jordan from The Fraud Boxer Podcast to talk all things fraud. We covered a lot. All sorts of things from finding a fraud job, picking fraud tools, fraud orchestration, building a fraud team, managing fraud fighters, even building fraud strategy.

Listen to the Fraud Boxer Podcast here or on any major streaming platform of your preference.

I also recorded a video series with IPQualityScore (IPQS) and they have been slowly releasing the clips across LinkedIn. They’ll be releasing the full video soon, and I will share it with you all when I get it. Check out this clip on Optimizing Checkpoints & Empowering Fraud Teams for Accurate Investigations.

See you again next Friday in your inbox.

​Brian

Just talkin’ fraud with Brian Davis from Dodgeball and That Fraud | The Fraud Boxer Podcast

Today, I and Jordan (The Fraud Boxer) just jump on a microphone and just straight up talk fraud. We had an outline before the mics went hot and when they did we just went for it!

We cover who I am, where I’ve been, and both of our approaches to fraud in general.

Topics from how to find a fraud job, joining a team, what do to as a leader, and how to execute a strategy. We cover it all, baby!

"Brian Davis builds fraud and T&S teams from scratch. He likes to call it organizing the chaos. Now he gets to be an extension of T&S teams and help them build out their strategy to scale T&S to align with their companies lofty goals. His internal goal is to help the community to find their voices and be seen as the true experts they are. Fraudsters work together, so it only makes sense we do too!"

http://fraudboxer.podbean.com/e/just-talkin-fraud-with-brian-davis-from-dodgeball-and-that-fraud

What's happening Fraud Fighters?

I’ve talked about this a few times this week, so it must be pretty top of mind for me.

A lot of people misunderstand the behaviors you’re rewarding when you give your team praise

Let's investigate further.

Read Time: ~4.01 Minutes

One Important Question

Can You Answer This One Essential Question?

Think for a moment. How do you like to receive your praise and criticism?

This isn't a trick question, nor is it one to be dismissed lightly. This question is 100% stolen from someone I’ve worked with. But I use it all the time now. It’s such a simple question but completely changes how you will work with anyone.

Beneath its simplicity lies a rich vein of interpersonal understanding. This question is a powerful tool that can completely transform your working relationships and how you engage with others - assuming you actually care about your team in the slightest. It helps unravel the unique set of preferences that each person has when it comes to receiving both praise and criticism.

In a nutshell, it's an essential to understanding and respecting individuality, which, can dramatically enhance your communication and collaboration. Whether in a professional environment or personal life, this question opens the door to more nuanced, empathetic, and ultimately successful relationships.

Let me ask again…

How do you like to receive your praise and criticism?

Is the Outcome Everything?

One day, I discovered a massive group of fraudsters who had been stealing money from the company for a long time.

After figuring out the scheme, my boss, a pretty serious guy, called me into his office. He crossed his arms and said, "Good job on finding the fraudsters." That's all he said. No details, no comments about the late nights I spent analyzing data, or the complex patterns I found. He only focused on the end result - that I found the fraudsters.

I smiled and nodded at him, even though I was a little upset inside. Sure, I had found the fraudsters. But he didn't seem to care about all the hard work that went into it. It was like he didn't see all the effort I put into solving this tricky case.

At that moment, I realized something was missing. My boss recognized what I did, but not how hard I worked to do it.

To this day, I’m still not even sure he understands what actually goes into an investigation…

Give Better Praise

In the world of fighting fraud, the power of recognition is often underestimated and underutilized. Regrettably, many fraud leaders do not provide sufficient recognition, and when they do, it often lacks the required depth and context that truly motivates and validates the front-line investigators.

Consider this example of misdirected recognition: "Great job uncovering that fraud ring!" While on the surface this seems encouraging and positive, it lacks the depth that real, meaningful recognition should encompass.

The issue?

Recognition must go hand in hand with a profound understanding of the actions, strategies, and analytical thinking that contributed to the breakthrough, not merely the end result.

When our appreciation solely highlights the outcome, we stumble into two crucial errors. Firstly, we limit our opportunities to offer recognition. Outcomes, such as fraud cases solved, are finite.

There are only so many fraudulent activities that can be uncovered. But the actions, critical thinking, and strategies employed in getting there occur constantly, providing numerous instances for recognition.

Secondly, by only recognizing the outcomes, we risk sending a message to our team that only the results matter, not the analytical journey and tireless effort. This mindset can stifle creativity, innovation, and the desire to go the extra mile.

Instead, we should be saying, "Fantastic work on uncovering that fraud bring, Brian! Your dedication to investigating those complex patterns is commendable and it's clearly paying dividends. Your detailed analysis in this case was spot on. Excellent work." Even this isn’t really that great of an example, but I think you get the point. I at least hope you do.

This manner of recognition appreciates not just the outcome, but also the specific behaviors and effort that led to the breakthrough.

Imagine being even more proactive and offering this kind of recognition during the ongoing investigation, or find some way to create visibility. "Brian, I just reviewed your report. You identified the irregular patterns with impressive precision, and the way you connected those disparate data points? Absolutely masterful!" Again not a great example, but I know you’ve got it now.

This forward-looking acknowledgment reinforces the behaviors you desire, encouraging a motivated, engaged team that consistently strives for excellence.

By recognizing the behaviors you want to replicate, rather than just the end results, you cultivate a culture of continuous growth and diligence. Just watch the transformation in your team's performance could be truly astonishing.

One Last Tip

Bonus advice for you fraud leaders — and honestly any field

It's important to remember that recognition doesn't come in a one-size-fits-all package. Each team member is unique, their preferences as individuals all the way to their fingerprints.

Some fraud fighters bask in the glow of public recognition, their accomplishments amplified by the applause and acknowledgment of their peers. This public praise can boost their morale and fuel their determination for the challenges to come.

On the other hand, some team members might find such public exposure disconcerting, even intimidating. They might prefer a more personal, one-on-one commendation, away from the spotlight. This quieter, more intimate form of recognition can feel just as, if not more, meaningful to them, respecting their comfort zone while appreciating their hard work and achievements.

As leaders, it is on us to understand and adapt to these preferences. It requires open communication, genuine interest in team dynamics, and the sensitivity to individual comfort levels.

A well-intentioned public recognition, though given with a heart full of gratitude, might unintentionally create discomfort for those who prefer the sidelines to center stage.

Recognition, when deployed effectively, becomes a powerful catalyst in a leader's toolkit. By ensuring it reflects the hard work, strategic thinking, and commitment — not just the end result — leaders can ignite inspiration, stimulate motivation, and form a profound connection with their teams.

As leaders, let's celebrate not just the solved cases, but the challenging puzzles that lead us there.

Let's create a culture where every step towards the goal is seen, appreciated, and applauded. Recognition, after all, is not just about the outcome. It's about the journey and the people who bravely embark on it, one analytical challenge at a time.

See you again next Friday in your inbox.

​Brian