Heroes in Business - David Britton, Experian VP Industry Solutions Global Identity and Fraud

Episode Date: March 30, 2022

Online payment fraud will reach 206 Billion by 2025. David Britton, Experian VP Industry Solutions Global Identity and Fraud is interviewed by David Cogan famous celebrity host of the Heroes Show and founder of Eliances entrepreneur community.  

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Well, I've got someone now that you just have got to meet and understand what he does. We have with us David Britton. He is the VP of Industry Solutions, Global Identity and Fraud at, are you ready for this? Experian. Now, David, with this title, there's no way you could sleep. This is a 24-7 times a gazillion job position. It is. And thank you for having me today. It's exciting to be here on the show, David. And yes, it's an interesting space to be in. That is absolutely for sure. And it never does stop where there's always something going on, for sure. I mean, isn't it safe to say that anybody who uses their computer long enough or does any type of online transaction eventually will someone will try to extort, try to create fraud on them? I mean, that's it's pretty much 100 percent, right?

It really is. We wake up every day knowing that we're actually fighting against very creative and highly motivated individuals. And they're going after businesses and they're going after consumers. And at the same time, all of us are just trying to get things done throughout the day as regular consumers. And so we've got to constantly make sure that we're stopping the bad guys while allowing good folks to simply get on with their day. That's absolutely the life we live. Yeah. Absolutely. So what are you seeing now is the top five threats, both within business and consumers? Because I'm sure there's probably tens of thousands of threats. What are the top five? Yeah, there's a handful of them. And I think it really comes out of what you just stated at the beginning, which is that this is really born out of the push into to digital has happened, particularly over the last couple

of years, what we've seen is a tremendous increase in fraudsters trying to hide in the crowds, if you will, across a number of fronts. So as we looked at the trends of where fraud was, where we predict fraud is going to have a negative impact coming in the next year, there's a couple of areas. One of them is going to be on things like the big push in new payment offerings like buy now and pay later. That's a huge, there's been a tremendous growth in that space. It's an attractive way for consumers to make payments on goods, but it's also a place where fraudsters are going to be able to use and are starting to use stolen identity data, stolen bank account information, stolen credit cards to go and

try to manipulate and use someone else's data and information to make payments on buy now, pay later schemes. So that's one of the big ones. It's one of the areas also where with Experian, we've got a whole set of services across all of these different attack vectors, by the way. We've got a whole set of services that we leverage. It starts with data, but it's also technology. And it's the use of analytics against the data to try to stop and determine who's a real person and who's a fraudster trying to use a victim's data. And that's really the way we look at the buy now, pay later scheme.

Absolutely. And again, you could reach David by going to Experian.com. That's e-x-p-e-r-i-a-n.com and of course we'll have it on our website at alliances.com all right david i'm going to throw out a number here i'm afraid to even say this number you're going to have to share with our audience what this number means because i did some research and i just about dropped 206 billion dollars what is that magic number? It's the estimated losses around payment fraud that they believe will be happening in the future and even happening today. So there's estimates. It's very difficult to actually come to hard numbers on this because a lot of this stuff doesn't get reported appropriately or gets recategorized in different ways. But that's the totality of the expectation of the fraud in the payment space going forward across all these different things. Buy now, pay later, credit card fraud, cryptocurrency payments, transfers out of bank accounts and so on.

transfers out of bank accounts, and so on. Yeah, and the thing is that definitely you mentioned a couple times about the buy now, pay later. That's gaining a ton of traction. I'm starting to see it everywhere. Share with us a little bit more insight into that, and how does that tie to fraud? Yeah, buy now, pay later is a really creative method. If you're someone that wants to be able to purchase goods, but you may not have the cash in hand to go do so, Buy Now, Pay Later offers a really creative and helpful way for people to be able to gain access to goods and services without having to pay the full amount up front. traditional credit card payment space, there are a lot of protections for the consumer around that. There's a lot of long-term established risk mitigation tools that have been in place over the years. When it comes to buy now, pay later, not all of those have been applied yet. And so

there's a vulnerability in the use of things like using stolen data or stolen identity data to set up a buy now, pay later account in someone else's name, as an example, or to take someone's bank account details and put them into a buy now, pay later environment and make payments from there. So while it's been great for the consumers as a very great alternative to the traditional credit card payment structure, there is this vulnerability that says the use of stolen data or compromised information can lead to losses for both the business and in some cases for the consumers, although most consumers are still well protected by their banks. So I'm getting nervous now about being on the computer with you right now with all these things

that could possibly happen. What, I mean, what's being done? And what role is Experian playing with this? Because everything, right, it ties to then your credit report and all of that type of stuff, and you have to go through so much. So what is we both pleased, David, as a business and as a consumer can do? Yeah, I think there's a couple of things. And while I don't work within the credit side of the Experian business, I'm on the fraud and identity side, the things that we are able to do are quite robust, actually. And this is where we feel confident in what we can bring to the table along with others in our space to help mitigate the risk.

And it comes in the form of things like identity authentication, right? Is this really David who is putting in his information? And the way we do that is not just around what we call the personal data, like the name and the address, but we're able to leverage technologies that we have at Experian around things like which device, which computer, which phone was used when they were trying to put that information in. Has the same device been seeing opening up three buy now, pay later accounts with different identities?

We can look at things like behavioral attributes and start to see if there's information there that makes sense or doesn't. And I'll give you an example. Like you and I both live in the Arizona area, but what happens if somebody is using our address information and our name, but that's coming from a device that's configured out of Southeast Asia by time zone setting or by network information. And it's really the collection of all of these different pieces of data that when you know what the right kind of analytics to put behind it and the right technology to bring to bear, that's what really helps us to mitigate fraud

in both this space as well as other things like account takeover and banking and so on. And those are the tools we bring to the market to be able to mitigate fraud in both this space as well as other things like account takeover and banking and so on and those are the tools we bring to the to the to the market to be able to mitigate fraud and if that wasn't enough all of this stuff too in regards to ransomware share with us everything now with the latest and greatest on ransomware taking place because it's it's happening and it seems to be happening more and more it does yeah ransomware is place because it's happening and it seems to be happening more and more. It does. Yeah. Ransomware is actually a more dangerous attack than just having to pay the ransom. And I think that's one of the things that many people don't necessarily understand, even in the business community, is that if you are attacked and the ransomware kidnappers, if you will, are going into to hijack data and usually

what they're doing is they're they're trying to get into a system hacking into a system or gaining access to a system to be able to control the data repository of that business and then they threaten to either delete it or release it to the public uh in exchange for a ransom that's the way ransomware tends to work the issue though is that it's not just that businesses may find themselves paying out the ransom. That's one loss. That's a financial loss. But the worst part of it is actually the longer term impact of the fact that once in there, the fraudsters have access to a tremendous amount of data about that company, not just the customer data, but perhaps also employee data, HR records, and other things that become quite dangerous in the longer run beyond just the ransom piece.

So again, the way to mitigate this, though, in the way we believe that we can be helpful is that oftentimes ransomware attacks begin with unauthorized access to a system. The wrong person gets the username and password and is able to log in somehow, an employee's credentials or something. And from that, they're able to then move across the network in that business to do these kinds of things. And so our answer to that is, if you have the right technology, predominantly on device recognition, behavioral biometrics, other network information, and so on, you can start to put a very robust lock on the door, if you will, that makes it really difficult for the fraudsters to overcome. And those are the types of things that we're bringing to bear to help mitigate

even things like ransomware today. Excellent. Excellent. Well, we're learning a lot. I got to tell you, David, if I had your position, I'd probably never sleep. Because again, you're listening and watching me, David Kogan, host of the Alliances Hero Show. Make sure that you go to alliances.com. That's E-L-I-A-N-C-E-S.com. The only place where entrepreneurs align. And as I mentioned, the guy that never sleeps probably with his role, David Britton, VP of Industry Solutions, Global Identity and Fraud. You can reach him at Experian.com. You'll see the link below.

E-X-P-E-R-I-A-N.com. David, now the latest and greatest that I'm hearing also too more and more, if it wasn't enough of what we already spoke about in regards to potential fraud scams that's taking place, it's the whole, and I'll use one word, crypto. Tell us now what's happening now with crypto. Yeah, cryptocurrency is the latest rage, really. And it's funny how aggressive the growth has been over the last six months, nine months in this space where people are seeing the value of it, right? And it was established to be able to, in an attempt to create a more

secure way of transferring funds, won't get into all the details on the crypto blockchain infrastructure, but the idea that you can have smart digital contracts that ensure that there's a concrete and consistent way of seeing the transactions in the blockchain, that's what cryptocurrency really enables. But what we've seen on the fraud side is that it is also at the moment a bit of an unregulated space. And so once cryptocurrencies go into that, the funds go into cryptocurrency, it becomes very difficult perhaps to find out where they're ultimately going, although there is some transparency there. What fraudsters are doing though, is they're using the cryptocurrency environment as a payment mechanism or a way to remove funds. I'll give you one example. Over the course of the pandemic,

there was a lot of stimulus funding theft that happened. A lot of fraudsters grabbed all the access to the government stimulus funding, and they had access to millions of dollars in stolen funds. In fact, billions of dollars were estimated to have been stolen from these government programs. The challenge the fraudsters had was, how do I get access to those funds and actually make use of them? You have to have a bank account to move it to, or you have to have some other container, if you will, to go to. I always liken it to, they had their hand on the cookie jar, or on the cookie inside the cookie jar, and they couldn't pull the hand out to take the cookies with them. Cryptocurrency offers a really viable way for them to be able to move money around. And again, it starts with who opened the cryptocurrency account? Who's actually, is it

the authenticated person that's doing it or not? And it really comes down to understanding who it is that's setting them up. Where is the money coming from? What's the source of it? Was it an authorized payment from someone's bank account or was it an unauthorized payment from that bank account? So as we often say, fraud happens because of the ecosystem and the gaps between the different services. And so we try to insert ourselves at those critical moments in the journey with looking at the right data, looking at the authenticated analytics pieces, and then the technology to stop fraud from happening. And crypto becomes a conduit for getting that money moved around by the fraudsters. Makes sense. Who put their hand in the cookie jar, right?

That's exactly right. That's it. Unbelievable. What's your day-to-day role with, again, and keeping up on all of the scams and just everything that's taking place and the fraud? How do you even keep up with it? Yeah, you know, I've been in this career since the mid-90s when the dot-com, when the worst fraudsters we had were 16-year-olds that were dumpster diving behind Blockbuster to grab the credit card slips, and then they'd go on the interwebs and buy stuff, right? Usually video games. It's changed a lot, but I'm privileged to work across a team with a tremendous number of experts in this field and technologists. And a lot of this has to do with technology it basically it comes down to reminding ourselves that there's a mission the money that gets stolen

from fraud is used for really bad stuff you know weapons deals human trafficking drug trade the it's almost like the mantra is what a fraudster does on the stealing of money on a given day is probably the best thing they're going to do that day. Everything else is downhill from there. So there's a mission for most people in our industry that are in our space. We have a collective goal to stop this stuff from happening. And so it's a lot of time spent with the engineering teams, a lot of time spent with the product teams, a lot of time spent working and learning with our clients what they're seeing on the attack side. Understanding, is there an attack here and can we solve it without interrupting good customer experience?

I'm a consumer, first and foremost. I hate it when I have to jump through too many hurdles. So it's always this dedication to put the right technology to solve the right problem without infringing on privacy in too many intrusive ways and making sure the customer experience doesn't suffer as a result. That's really the day. And we have someone who's part of our alliances community and they started a nonprofit in regards to senior elder abuse and that. In fact, talk to us about the digital elder abuse. And then also, too, is the whole thing of these online dating apps and the scams that take place there. Yeah. And they're kind of in the same bucket. And usually what we see is this is really where

you get to the scams part of the fraud industry. With the rush to digital, particularly during the pandemic, unfortunately, there were some what we would call non-digital natives that were forced into doing things online. There was also a lot of loneliness during the pandemic. And so we saw a rise in sort of the use of the dating apps and other things. Unfortunately, the internet and digital world is anonymous by design, unfortunately. It was not designed with security in mind. So as you look at folks that may not be totally comfortable in the digital space, the fraudsters are going after them.

And that includes the elderly and it includes folks that may be looking for companionship. mind is that fraudsters are often making promises and making things that sound really appealing to some part of the population and deceiving them into either giving away information or in worst cases giving away money. And at that point it becomes a bit of a challenge because now you have an actual victim who has authorized a payment to some other person and doesn't realize that it's a fraudster on the other end of the line. So for the recommendation, and I say this to all of my family members as well, particularly those that are getting older, do be aware that your bank won't call you and ask you personal details. If you do get a call, if you get a voicemail, if you get an email, don't respond to that call or that email.

Go back, find the records that you have on your statements or on the back of your credit card, and reach out to the official number that's published there. That alone, I think, can go a long way in helping mitigate some of this. Frogsters will exploit the vulnerable and those that are less fortunate. And that's the part that we also fight hard to overcome. And we try to put solutions in place, again, leveraging our expertise and our technology to help both businesses and the consumers stay safe when it comes to the fraud work that we're doing. David, what's your crystal ball say kind of about the future of how just things have morphed so much, like you said, from dumpster diving to now crypto?

What is your crystal ball say about the future of the fraud, global identity fraud prevention and that? I mean, you know, I mean, people still break into homes, right? How long have we had locks and somebody could easily break a window, bust through a door? right? How long have we had locks and somebody could easily break a window, bust through a door? Will there ever be improvements in regards to security, online security? It's a great question, David, and I don't often say that, but this is an important question. And I think it's important to remember that we talk about it. It is really fraud management and risk management. It's not fraud obviation. We're not necessarily getting rid of it all. That's a bit of a pipe dream, frankly. And the future, as we

look at it, is always driven by technologies that enable consumers to do more. Software continues to be developed in new and creative ways. We talk about the metaverse now. Within that metaverse, and the pandemic is sort of a prelude to all of this that says, you know, we're all being represented through our digital devices. How we interact with people is all through these digital means,

more than it has ever been before. I'll say, I'll take a quick look back before answering your final question, which is humans in face-to-face interaction, we use a lot of signals to identify the person we're engaging with. How tall is this person? What does their voice sound like? How do they look? What are their habits as they interact with me? And over time, you begin to be able to recognize the person. And in a world where 99% of the population is only trying to do the right thing,

and there may be this subset, this very small population of fraudsters that are wreaking havoc, if you will, in the future, we think that there's going to be much more use of data in the digital streams and the analytics required to use that data and the technology required to use that data to keep the environments safe over time. And that's why I'm excited to continue working. I've been in

startups. I've been in the entrepreneurial space in this area for a long time. But this is why at Experian, we're able to take advantage of a huge number of resources and apply them to these problems going forward. And there's going to be a lot of work ahead of us. Not to be afraid of it, though. I think that we as a species, we're good at moving along and surviving. And I think that we're going to be seeing more of that into the future. We're going to be able to stay a step ahead of the fraudsters as we can in many fronts. Well, David, you're definitely helping to protect businesses and consumers from fraud schemes and so much more. That helps. That's a hero.

VP of Industry Solutions, Global Identity and Fraud. You can reach him by going to Experian. That's E-X-P-E-R-I-A-N.com. This has been David Kogan with the Alliance of Charlotte.