March is Fraud Prevention month! In the March edition of Shop Talk Podcast, we’re talking about fraud prevention. Al’s co-host is Yale Holder, VP CEx at Moneris. They talk about the importance of fraud prevention for your business. In the featured interview Al speaks with the Chief Customer Experience Officer at Kount, Rich Stuppy about fraud trends. Rich also provides valuable tips and insights on how you can protect your business from fraud.
March is Fraud Prevention month!
In the March edition of Shop Talk Podcast, we’re talking about fraud prevention.
Al’s co-host is Yale Holder, VP CEx at Moneris. They talk about the importance of fraud prevention for your business.
In the featured interview Al speaks with the Chief Customer Experience Officer at Kount, Rich Stuppy about fraud trends. Rich also provides valuable tips and insights on how you can protect your business from fraud.
Also in this episode:
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Al Grego: Coming up on Shop Talk.
Rich Stuppy: I work with people all the time that are frankly shocked by the idea that there's an international fraud ring targeting their business.
Al Grego: Right. Hello everyone. I'm Al Grego.
Yale Holder: And I'm Yale Holder.
Al Grego: And this is the March 2022 edition of Shop Talk with Moneris. Welcome to the Shop Talk Podcast, Yale.
Yale Holder: Thank you very much, Al.
Al Grego: Yale, you're the VP of customer experience at Moneris. Why don't you tell us a little bit about that role?
Yale Holder: Well, once a merchant becomes a new customer of Moneris, it's my team's responsibility to ensure that customer has the necessary support to continue operating the business with as little interruption as possible. We support all our customers needs, whether it's financial, technical, or even a new customized solution for them. We have close to 200 service center agents to support our small independent businesses, and a dedicated team of service managers who take care of our larger relationships, enterprises, ISVs, ISOs, and other partnerships. And we work closely with the partnership and product teams on this. Finally, we support charge by corporations for all our customers.
Al Grego: Your team must deal with all sorts of issues.
Yale Holder: Yes. Like I said before, we take care of everything, from financial and technical issues to fraud. We are the first point of contact.
Al Grego: You mentioned fraud, which is why you're here today. Because March is Fraud Prevention Month and that's the theme of our episode.
Yale Holder: Makes sense.
Al Grego: So I guess the obvious question then is why is fraud prevention important?
Yale Holder: Fraud disrupts the normal activities of a business and it can come at a considerable cost. Loss of revenue, along with goods and services, plus the time to manage and deal with it, including working with authorities in many cases. Taking some simple steps to prevent fraud and build healthy payment practices can mitigate the impact of fraud and keep our customers businesses flowing smoothly.
Al Grego: I know that entrepreneur and business owners are already likely experts in whatever they do for business. It seems daunting to think they also have to be experts in preventing fraud.
Yale Holder: The good news is there are a lot of great tips, practices and tools available online at moneris.com, that can minimize the risk of fraud to your business.
Al Grego: Well, hopefully today's episode will provide some of that important information.
Yale Holder: Who do we have lined up?
Al Grego: Well, our feature interview is with Rich Stuppy. He's the chief customer experience officer at Kount.
Yale Holder: Kount is an industry lead in fraud prevention. Rich would have some great insight.
Al Grego: And then I have Shawn Cologna. He's the director of business banking fraud at BMO, with our by the numbers segment.
Yale Holder: I bet he has some great data as well.
Al Grego: And our very own VP of enterprise risk management, Daniel Trunzo, will answer this month's ask the expert question.
Yale Holder: Ah, yes. Daniel certainly qualifies as an expert. I work very closely with Daniel.
Al Grego: So we'll begin with my feature interview with Rich Stuppy from Kount. Here's my chat with Rich.
Speaker 4: Featured interview.
Al Grego: I'm here with Rich Stuppy. He's the chief customer experience officer at Kount. Thank you so much for joining me today, Rich.
Rich Stuppy: Yeah, thank you so much for having me on this podcast about National Fraud Month in Canada.
Al Grego: Before we begin, why don't you tell us a bit about what Kount does?
Rich Stuppy: Sure. Kount is a fraud protection company. So we help businesses like payment processors, retailers, and really any digital business protect themselves from people that use stolen credit cards, stolen identities and stolen credentials to commit fraud on their digital businesses.
Al Grego: Okay. March is Fraud Prevention Month and that's the theme of our episode. So why don't we just start with the obvious question, why is fraud prevention important?
Rich Stuppy: Great question, and I think it's really fundamental to understand that there are people that are trying to steal from your business or cause brand damage. And that has many, many negative downstream consequences from the obvious of losing money and goods, et cetera. But also, it can cause reputational damage in the industry. The bottom line is all of those things are a horrible customer experience for the people that you're trying to serve with your business.
Al Grego: Agreed, for sure. So when talking about fraud, there's different types of fraud obviously. For our listeners, what types of fraud should they be concerned about?
Rich Stuppy: I think the trends that I see are, fraudsters are attacking every point in the customer journey, in particular, the payment. So a fraud check prior to payment where, they're using very good data, they are using stolen credit cards. So maybe they're doing card testing. That payment point is a key moment in that customer journey, but they're attacking all of it. So even post payment fraud where it's either refund fraud or first party or what the industry calls friendly fraud, although it's certainly not friendly in my book, that's a real issue.
Then we also see things like account takeover and other things where they're attacking maybe a loyalty program or attacking maybe a wallet of some sort. It's really all across the customer journey that these professional fraudster are targeting small, medium, and even enterprise businesses. They're all being targeted.
Al Grego: Now, when we talk about prevention measures, what measures are already in place to protect customers and merchants from fraud?
Rich Stuppy: Great question again. Talent relationship with Moneris. So we have implemented our comprehensive fraud control platform that really is layered protection across every aspect of the evaluation for fraud, whether it's device PII, email signals, physical signals, digital signals, AI and machine learning. All of that is implemented in to our integrated partnership with Moneris. And we've customized that to make it available for enterprise customers, as well as the small to medium business. Because sometimes the concerns that they have on those classes of businesses will be a little bit different. So with our relationship, the protections are in place, as you said.
Al Grego: You talk about some of the Kount products that certainly are integrated in a lot of the Moneris products, but they're also, tools such as CVV, AVS, 3D secure that are also measures that are ubiquitous. If you're a credit card holder, for example, you already know about some of these, right?
Rich Stuppy: Yeah, you bet. Those are incorporated in an adjacent manner to the Kount core system. Certainly AVS and CVV can be important. And the ability to do a step up authentication with 3DS equally important, depending on the objectives of a particular business. I think that's what's important, is having all the tools available to implement the right suite for a business' particular objectives and the way they want to treat their customers.
Al Grego: So what advice would you give to a business owner to protect their business from fraud outside of the tools available? What common sense steps can they take with their business?
Rich Stuppy: I think first and foremost is awareness. Because I work with people all the time that are frankly shocked by the idea that there's a international fraud ring targeting their business. So you have to be observant for indicators. I would also say that you might also think about the idea that once you've detected it, it might be too late. So it's about layering in those protections in advance to make sure you have the sensors to make it easier to detect, and the controls to make it easier to take action should you become a target of a fraud ring or one of these organized crime businesses.
Al Grego: I mean, some people might think, well, why should I worry? I'm just, for example, an online merchant selling with an online store. But what's probably important for them to understand, especially when it comes to card testing, those are prime targets for fraudsters who want to test a bunch of cards really quickly. They look for those small stores.
Rich Stuppy: Yeah. Great point there. And this is another part of the awareness concept, because if you're running a digital business, you can be a victim of fraud and they're not even looking to get the goods that you're selling. They're looking to use your rails, for lack of a better word, to test and validate whether or not a stolen credit card still works. And then once they get the determination that the current card still works and it's still open to buy, then they go target a bunch of other stores as quickly as they can to monetize that card before it gets turned off.
Al Grego: Exactly. So in that example there, if ever you get a statement and you see a large quantity of small one dollar purchases or canceled purchases, you know that you've probably just been targeted in a card testing scheme.
Rich Stuppy: Absolutely. The tools that card testers and fraudsters in general have available to them now, in terms of automation and programmatically attacking individual businesses, they've come a long, long way in the last couple of years. They've gotten a lot better. We are hearing about and seeing and stopping automation driven testing attacks on literally multiple times a day.
Al Grego: Aside from awareness, and that's the big one, what would you want to leave our listeners with, another piece of advice that you might want to leave our listeners with today?
Rich Stuppy: Yeah. I think it's important to understand the knock on effects of fraud. One of those knock on effects is it can dramatically change the data that represents your customer to you. Even if you're defending against fraud perfectly, but they're going through your funnel and they are executing purchases or attempting purchases, and those later get reversed or stopped to prevent the fraud, you have to be careful to subtract those clicks and those visits from your journey metrics and your ad campaigns and your ROI calculations because they never actually happened and they weren't actually good customers. And when you do that subtraction, it can dramatically change your perception of the customers that you deal with on a daily basis.
Al Grego: Good, that's a great point. Thank you so much for your time today, Rich.
Rich Stuppy: Yeah, thank you very much. I was born in March and I'm super happy that March is Fraud Protection Month in Canada. And I look forward to working with folks to fight the fraudsters because that's what we're here for.
Al Grego: That's great. It sounds like you were born in the right month.
Rich Stuppy: Indeed.
Al Grego: All right, have a good day.
Speaker 5: As a business owner, change comes at you fast. That's why Moneris is right by your side as you innovate and adapt so you can get paid. With solutions for businesses of all shapes and sizes, we're proud to help Canadians like you achieve their goals. From online, in-store, curbside and pickup solutions, Moneris is there to help your business succeed every step of the way. To talk to one of our business advisors, call 1866 Moneris or visit moneris.com.
Speaker 4: By the numbers.
Al Grego: I'm here with Shawn Cologna. He's the new director of fraud strategy for north American business banking at BMO. Thank you for joining me today, Shawn.
Shawn Cologna: Thank you. Pleasure to be here.
Al Grego: Well, so what number do you have for me today?
Shawn Cologna: Well, from the Canadian Anti-Fraud Center, since the beginning of the pandemic, fraud in Canada has risen between 600% and 800%.
Al Grego: That's a big number.
Shawn Cologna: Well, it continues to grow. Also, from the Canadian Anti-Fraud Center last year, there were over 74,500 Canadian reports of fraud, which was up from over 71,000 the year prior. They were also 50,666 Canadian victims of fraud up from 42,100 in the year 2020. And here's a big number for you.
Al Grego: Yeah.
Shawn Cologna: $269 million. That's the amount of money that was lost last year to fraud and more than double the year prior of just under 106 million.
Al Grego: That's incredible. Most of this, I guess is pandemic related. Would you say?
Shawn Cologna: I would definitely say that. I should also add that unfortunately, these numbers are only from people that reported it. There's a lot of people that have not reported that they were victims of fraud because they were hesitant, a little embarrassed or a little ashamed, but I personally think that we need to remove the stigma of being a victim of fraud. Fraud can happen to anyone. And the more that we know about fraud, the more that we can do to prevent it.
Al Grego: That's a good point. I mean, we can't prevent it if we don't know what the problem is or where the problem's coming from.
Shawn Cologna: That's exactly it. I think it's important to know that it happens to everybody on different degrees of severity. But the more that we talk about it, the more we can be more proactive and recognize when frauds are about to occur before it happens.
Al Grego: Right. Now, in terms of fraud threats, you've got three main categories that they fall under, what would they be?
Shawn Cologna: Yeah. The three main events that we see impacting many businesses today are digital fraud, payment fraud, and identity theft. Digital fraud is when customer information is accessed often online through passwords that are stored in email and funds are obtained online through account takeovers. Payment fraud is when you have your credit card stolen or a gift card stolen, fraudulent checks are used as payment, or when fraudsters pose as business owners, asking companies staff members to send wires on their behalf. Wires are significantly more difficult to recover once they arrive at the recipient bank.
Lastly, identity theft. This one, we've heard a lot of, it's a combination of fake and real information to create a new identity that is used to obtain credit or open up accounts in your name and then using those accounts for criminal activity.
Al Grego: Now, I said earlier that this is probably pandemic related. It's easy to blame everything on the pandemic, but why exactly is this happening?
Shawn Cologna: I think the rise can be attributed to a few factors. For one, people are spending more time at home, which allows them to be online more and increase the security risks when they're working remotely. Also, remember that crime is profitable and portable. Cyber crime is global and can happen anywhere, anytime. From that, fraudsters are exploiting the eCommerce boom. And believe it or not, another reason why fraud is happening more often is because there's staffing shortages. Businesses are operating with reduced, overwork or distracted staff, and there isn't a lot of time for people to stop and think and ask themselves, does this make sense?
Al Grego: That makes complete sense. I mean, when you retired, you make more mistakes, right?
Shawn Cologna: Absolutely correct.
Al Grego: So what are some of the recommendations BMO's making to prevent fraud?
Shawn Cologna: What we're recommending is to step back and think about the transaction itself or the request. Does it make sense? If somebody's asking you for personal information, think, do I really need to give it out? Is it a requirement? Is it mandatory? Slow down and be skeptical of what links you're clicking on or the attachments that you're being asked to open. Be critical of anything that is sent to you by way of an anonymous email.
Stay note on unsolicited calls or emails, use biometrics to upgrade your passwords and don't use common data burst or numbers sequences for a pin number. Sign up for account alerts for purposes of fraud detection. Make sure your financial institutions contact information is up to date so you can be contacted quickly if they need to contact you, and just plan a response. Pretend that you're going to be a victim of fraud and think to myself, if and when it does occur, who do I want to contact and how will I contain the fallout before it happens?
Al Grego: That's great. I want to say, the used biometrics, I love that. I do that now with my banking app. Not only is it more secure, it's faster. I mean, why wouldn't you use your fingerprint to log into your bank? I'm always forgetting my banking passwords. So biometrics is a lifesaver.
Shawn Cologna: It is a lot more difficult to replicate a thumbprint than it is a pin number. Correct.
Al Grego: Exactly. Okay, great. So before I let you go, what are some messages you want to leave us with regarding fraud prevention?
Shawn Cologna: Well, fraud is a public security threat, and at Bank of Montreal, we take protection of our customers' information very seriously. It's our job to help our business owners understand the threats. If you have questions, don't hesitate to ask your banker, does this seem legitimate? Am I being conned? Or can you provide me with any guidance or advice on how I can perhaps prevent fraud?
Al Grego: Okay. And where could people learn more about what BMO's doing in terms of fraud prevention?
Shawn Cologna: I'd recommend everybody to visit bmo.com/security for fraud prevention tips for your business.
Al Grego: Thank you so much for your time today, Shawn.
Shawn Cologna: It's been a pleasure. Always happy to chat fraud.
Al Grego: Excellent.
Speaker 4: Ask an expert.
Al Grego: I'm speaking today with Daniel Trunzo, he's the VP of enterprise risk portfolio management at Moneris. Daniel, thank you so much for taking time today.
Daniel Trunzo: Hi, pleased to meet everyone.
Al Grego: So we've heard now from Kount and from BMO and from your colleague, Yale, about the importance of fraud prevention and some different tools that are available for fraud prevention. The question we'd like you to answer is what are some things business owners can do right now to prevent fraud?
Daniel Trunzo: There's a lot merchants can do and managing the fraud risk is always a multifaceted risk to manage. Fraudsters and perpetrators always change or disguise in their approach. So having a layer of controls and a multifaceted approach to deal with fraud risk is always the way we give suggestions and recommendations to our merchants. Some of those come down to, what are the products or what are the more sophisticated things a merchant can add? And some of them could be very simple. Like if you're having someone in your own office do the cashflow management and reconciliations on a daily basis, the sooner you detect something, the better you are at mitigating and managing that.
Having internal controls and authorities in your organization. So whoever's managing your payment acceptance account is at arms length or a different person and there's some oversight on that with the bank account. And even just at the transaction level, I speak from seeing many transactions throughout our merchants history and different conversations, where some small local businesses, they may not need to necessarily accept the transaction from a very far country abroad where arguably, they never fulfilled anything too, or they're not having as customers. So if they're seeing an influx, all these payments coming from these places or card transactions, that should be suspicious, or they can even prevent or block some of those.
Al Grego: Right. What's one key piece of advice you would give to our listeners about fraud prevention?
Daniel Trunzo: To a degree, it also sometime comes down to common sense, and things that sometimes look too good to be true, to a degree are. And be mindful of things that become very seasonal in timing, and if someone's trying to rush you for a transaction, for instance, we see some peaks around when it's snow tire season, everyone's rushing getting snow tires and then you get that trend. There's been other trends, such as PPE.
For the beginning part of the pandemic, it wasn't easy to get PPE available. So then everyone became quick and scrambling to do transactions for PPE. And then some merchants got hit with either them having made a payment for PPE, where then they never got their PPE. So then merchants themselves as buyers have become victims where they're trying to buy PPE for their businesses and it turned out on the other end, there was just someone trying to get a rush transaction and speculate on it. So be wary when things like that happen, where it's really trendy and timely because that's the areas where fraudsters will attack, is where there's a rush decision or a big demand about something [inaudible 00:20:52].
Al Grego: Now, Daniel, you have a bit of a reputation for having some great metaphors. Do you have any here you'd like to share before we let you go?
Daniel Trunzo: Sure. Let's see. Yeah, I would say, try to be safe and if your grandmother wouldn't do something, think about her when something's happening in your business and probably trust her judgment. So use that little voice in your head sometime. Yeah, it goes a long way.
Al Grego: Great. Thank you so much, Daniel, for your time today.
Daniel Trunzo: Cheers. Pleasure.
Speaker 4: Save the date.
Al Grego: I'm joined today by Amanda Ibrahim, communications specialist for our events in ESG team. Thank you for joining me today, Amanda.
Amanda Ibrahim: Thanks for having me, Al.
Al Grego: We have three events to look forward to in March. The first one involves our CFO. Why don't you tell us a little bit about that one, Amanda?
Amanda Ibrahim: Yeah, sure. Coming up on March 7th, our chief financial officer, Winnie Leung, will be featured at an international Women's Day event, Dress For Success Toronto, Your Hour, Her Power.
Al Grego: So what is Dress For Success?
Amanda Ibrahim: Dress For Success Toronto is an organization with a mission to empower women to achieve economic independence by providing a network of support, professional attire and career development. They've been helping women thrive in the workplace since 2009.
Al Grego: And where can people get tickets for that event?
Amanda Ibrahim: Tickets will be available at toronto.dressforsuccess.org.
Al Grego: Excellent. What else do we have this month?
Amanda Ibrahim: On March 11th, Moneris is sponsoring Greater Vancouver Board of Trades ICE workshop. ICE stands for Integrated e-Commerce Essentials. It's a workshop that helps businesses discover, learn, and create an integrated online strategy to drive global sales.
Al Grego: Where's the workshop being held?
Amanda Ibrahim: The workshop will be held at the Pam Pacific Hotel in Vancouver, and you can get tickets at boardoftrade.com/events. You can use code MonerisICE for a full bursary at checkout for the workshop registration.
Al Grego: Great. And finally, we have some e-Commerce North news.
Amanda Ibrahim: Yes. The second cohort of e-Commerce North will be kicking off on March 23rd. To stay updated on all the latest and greatest news, you can visit ecommercenorth.ca.
Al Grego: Great. So just for a rundown, March 7th, we have our CFO Winnie Leung at the Dress For Success event, March 11th, we have the Vancouver Board of Trade ICE workshop, and March 23rd is the kickoff to e-Commerce North.
Amanda Ibrahim: You got it.
Al Grego: Perfect. I'll post the details and links to these events in the show notes for this podcast. Thank you so much, Amanda, for your time today.
Amanda Ibrahim: Thank you. Have a great day.
Al Grego: You too. And that's all we have for this month. I hope you found this episode informative. Before we sign off, I'd like to take a moment to promote another Moneris podcast that you might enjoy called Yes, We Are Open. Here's a little teaser. Running a small business in Canada is no small matter.
Speaker 9: Check it out.
Al Grego: Here are eight stories to prove it.
Speaker 10: There's times where we didn't pay ourselves.
Speaker 11: This was my dream, but it became her nightmare.
Al Grego: Eight stories of success.
Speaker 12: The future is bright.
Speaker 13: The online took off and it's been good.
Al Grego: Listen to all eight stories now on the Yes, We Are Open podcast available wherever you get your podcast.
Speaker 14: It's called Yes, We Are Open.
Speaker 15: Yes, we are way open.
Yale Holder: If you haven't already, you can subscribe to this podcast, Yes, We Are Open, wherever you get your podcasts.
Al Grego: If you'd like to support the show, share this podcast with your network or review us on Spotify or Apple Podcasts. And finally, if you have a payment related question you'd like to submit to one of our experts like Daniel, you can email us at podcast@moneris.com.
Yale Holder: Join us again next month for more expert insight and data to help grow your business.
Al Grego: Yale, thank you so much for co-hosting.
Yale Holder: Well, thank you for having me, Al.
Al Grego: On behalf of Yale, myself and the rest of Moneris, thank you for listening to Shop Talk. Talk again in April.