Good morning.
I’m fascinated with cybercrime—the various ways bad actors hack into both our computers and our vulnerabilities. Now that we’ve learned to not click on attachments, urgent IRS missives, or opportunities to coinvest with foreign royalty, new threats loom.
AI has given cybercriminals better tools to trick us and created new challenges in establishing who pays for it. Remember the deepfake “CFO” of British design firm Arup who tricked a Hong Kong employee into transferring more than $25 million to fraudsters? The former lawyer scammed out of $740,000 in retirement savings? U.S. Investigators are now looking at whether JPMorgan Chase, Wells Fargo, Bank of America, and others have done enough to shut down accounts run by fraudsters.
I recently sat down with Gadi Mazor, CEO of BioCatch, an Israeli fraud detection firm that specializes in preventing digital fraud, money laundering, and impersonation for banks and financial services organizations. He told me that banks are getting pretty good at the cat-and-mouse chase to keep worms, viruses, malware, and other threats from getting into our bank accounts. Now, the problem is often customers and workers themselves, when they’re tricked into doing dumb things.
Mazor calls it “customer-enabled fraud loss,” noting that “it’s often way more devastating because people feel responsible for the crime.” Elaborate catfishing scams can unfold over months. What’s more, he argues, “The more educated you are, the more prone you are to fall for this because you feel like you know what you’re doing.” He adds that “most of the people falling for these scams are men, not women.”
The question is how to fight it. BioCatch measures hundreds of signals that can indicate when someone is being scammed. That includes typing in passwords (versus cut and paste); how quickly you move the mouse (to keep the screen up as you’re talking to a scammer); delay times (reading back a password); people moving their phone to their ear (possible manipulator on the line); and timing (the rate of one type of U.K. Scam went down during Russian soccer games because scammers took a break to watch). He says device theft is becoming so common in parts of Latin America that people carry two phones, with the one used for calls stripped of sensitive information.
Who’s responsible for bearing the cost of all this scamming? In October, U.K. Regulators will require payment service providers to reimburse customers when they’re tricked into making large bank transfers. But Ben Chance, the chief fraud risk officer for the payment app Zelle, says the main responsibility for shutting down scammers lies with consumers and law enforcement. As he recently told my colleague Michael del Castillo, “The solution to fraud and scam prevention has to be one that focuses across all payment networks, not one isolated payment network.”
More news below.
Diane Brady
[email protected]
Follow on LinkedIn
TOP NEWS
A judge ruled that Google broke antitrust law. Now what?
The Justice Department could force Google to split up after a U.S. Judge ruled that the company operates an illegal monopoly by paying companies to make its search engine the default on their products, sources told Bloomberg. This could mean separating the search business from other products, such as the Chrome browser and Android smartphone. This is far from a foregone conclusion, but any such split would disrupt the tech giant's search dominance and hobble its foray into AI—and become precedent for a line of other antitrust lawsuits in the works. Coins2Day
Democrats try to change the crypto narrative
Senate Majority Leader Chuck Schumer (D-N.Y.) And billionaire Mark Cuban were among those present at a town hall hosted by the newly formed Crypto for Harris organization yesterday. The inaugural meeting comes just a month after former President Trump presented himself as the pro-crypto candidate in this year's presidential election at the annual Bitcoin conference in July. G Clay Miller, an organizer for Crypto for Harris, told Coins2Day that "there was a lot of pent-up energy from Democratic crypto operatives, who viewed this opportunity as a chance to reset the narrative for Democrats around crypto." Coins2Day
Mars adds Cheez-Its and other snacks to its offerings
Mars, the massive company behind M&M's and a slew of other brands, announced on Wednesday that it will acquire fellow retail giant Kellanova for $35.9 billion, including debt. The deal is among the largest of the year so far and will add names like Cheez-Its, Pop-Tarts, Pringles, and more to the Mars portfolio. Coins2Day
Junior bankers told to snitch on bosses
Bank of America is asking junior bankers to report managers that ask them to lie about how many hours they've worked, according to the Wall Street Journal. This follows a previous investigation by the publication that found managers were asking junior staff to under-report how many hours they worked to avoid breaking a rule that caps them at 100 hours per week. Coins2Day
AROUND THE WATERCOOLER
The new Starbucks CEO shares the best business advice he ever got by Emma Burleigh
Why Aflac’s CEO chose the duck (even though it made him very nervous) by Coins2Day Editors
China’s newfound taste for milk could be a $626 billion business. How U.S. Banks and dairy farmers plan to cash in by Michael del Castillo
Starbucks’ interim CEO Rachel Ruggeri cashed in on $342,000 stock sale the day reshuffle was announced by Eleanor Pringle
Ex-JPMorgan top strategist ‘Gandalf’ remerges after shock exit to say I told you so by Christiaan Hetzner
Google’s ex-CEO blames working from home on the company’s AI struggles by Orianna Rosa Royle
This edition of CEO Daily was curated by Joey Abrams.
