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Getting in Front of the Scam: How to Build Trust With Your Customers, A conversation with Hailey Windham, a Credit Union Fraud Fighter
331 Plays6 months ago
In this episode, we are joined by Hailed Windham, a leading voice in the credit union community, who shares her expertise on the collaborative efforts to fight fraud. Hailed tells us about her involvement in multiple impactful initiatives, such as promoting awareness programs through the #cufightfraud campaign she initiated on social media and co-leading the bank and FI subgroup in Operation Shamrock. She also discusses her active role in Mission Omega, highlighting the importance of coordinated efforts in fraud prevention.
Hailed further explains how she is driving the fight against #pigbutechering scams with the Crypto Coalition in South Carolina, aiming to drive regulatory changes and improve enforcement against cryptocurrency investment scams.
Tune in to learn about the innovative strategies credit unions are employing to safeguard their members and stay ahead of emerging threats in the financial sector.
Hailey Windham on LinkedIn: https://www.linkedin.com/in/hailey-windham/
Banking on Fraudology Podcast: https://pod.link/1744207174
This podcast is hosted by Ayelet Biger-Levin who spent the last 15 years building technology to help financial institutions authenticate their customers and identify fraud. She believes that when it comes to scams, the story starts well before the transaction. She has created this podcast to talk about the human side of scams, and to learn from people who have decided to dedicate their lives to speaking up on behalf of scam victims and who take action to solve this problem.
Be sure to follow her on LinkedIn and reach out to learn about her additional activities in this space. https://www.linkedin.com/in/ayelet-biger-levin/
ScamRanger: https://scamranger.ai/
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Transcript
Introduction to Fraud and Regulatory Challenges
00:00:00
Speaker
Banks and credit unions are the last place in the scam before the money is sent out. So when we're the last place, that's where everybody wants to place blame, but there's only so much we can do. So we've got to get regulation and policy changed so that banks can start being more empowered to hold back these funds that we know are a part of a scam. And then of course you've got the technology and the data. Like we should be able to rely more on our vendors and our software to do more to help us catch these.
00:00:33
Speaker
Scam Rangers, a podcast about the human side of fraud and the people who are on a mission to protect us.
Host and Guest Backgrounds
00:00:41
Speaker
I'm your host, Ayere Figer Levine, and I'm passionate about driving awareness and solving this problem.
00:00:52
Speaker
Today's scam ranger knows a lot about fraud and credit unions. Hailey Windham is a 2023 credit union rock star recipient. She's a certified financial crime specialist and she's implemented several programs with her previous organizations to aim at holistically preventing fraud among membership and employees. She's worked at credit unions and is currently with Mission Omega, taking the perspective of credit unions in their operations.
00:01:19
Speaker
Haley also is one of the leaders of the banking and financial institution stream in Operation Shamrock. And she recently launched her own podcast called Banking on Frodology, which is the extension of Carice Henrigg's Frodology.
00:01:34
Speaker
Haley Windham, great to have you on the podcast. Thank you so much. I'm so happy to be here. Yeah, so we've been talking for a while. You've been always my go-to for credit unions. And I can't wait to dive into so much that's going on with you these days, starting from your background. But also, you're involved in Operation Shamrock. You're with Mission Omega. You're highlighting credit unions that are
00:02:01
Speaker
fighting fraud, so I can't wait to go and unpack everything with you. So let's start with your background. You've been in the credit union fraud fighting space for a very long time. Tell me a little bit about how that came to be. Did you choose this as your go-to profession since always, or you stumbled across it?
00:02:23
Speaker
Well, I stumbled into it really. I started in banking in 2014. So I'm at the 10 year mark working on my 10 year anniversary. I feel like once I get there, that's whenever I can start saying I've been in banking a while, but you know, I talked to so many others and they're like, I've been in banking since the 90s. And I'm like,
00:02:41
Speaker
That's when I was born. So anyways, I'm just, I love, absolutely love what I do. It started out really just as an opportunity to work in a financial institution and then get into balancing general ledgers and
00:02:56
Speaker
hanging out with the bookkeeping crowd, which operations, you know, without operations, you can't have a successful business.
Credit Unions vs Banks: Different Approaches to Fraud
00:03:03
Speaker
So my heart is always with operations. Um, but I was able to start processing reggae debit card claims. And so that's where my love for fraud came. Well, fraud prevention, obviously.
00:03:16
Speaker
But it was a way like, how can we get in front of it? Like what happened? Why are we taking these losses? And really that was kind of the request of working at a bank was, you know, we've got to stop these losses. How can we stop these losses and, you know, get them as minimal as possible?
00:03:31
Speaker
And then when I switched and went to the credit union side, it was how can we stop impacting members? We don't care necessarily about the losses that we take as long as we are looking out for our members and doing what's best for them. So it was a completely and totally different new world. And I was just so excited to dive in, but I wasn't expecting to be in a credit union or in a bank or really working in fraud because I didn't know that was a real thing. So when I found out it was,
00:04:01
Speaker
got bit by the fraud bug and I haven't looked back since. Yeah. I just said something really interesting that I don't think we pay enough attention to. We've talked to Seth Rudin an episode maybe seven a long time ago about the difference between banks and credit unions a little bit. But you mentioned something that I think we need to double click into about
00:04:23
Speaker
While you were at the bank looking at the losses and how do we minimize losses, but in the credit union, it's less about the minimizing losses, which of course a credit union wants to do a good job about minimizing losses, but it's also in a big chunk of it is also about how do we make sure our customers are treated better. Exactly.
00:04:44
Speaker
Yeah, and it changed the way that I'll even look at fraud fighting. I went in with very excited mindset and just finally I can dive into this fraud world that hasn't been worked yet because it was a new position in the credit union.
00:05:01
Speaker
And so, and it was one dedicated fully to fraud. So I was very excited to get in and I was like, Oh, I'm going to make all these changes and I'm going to stop all this fraud. And it's going to be this new, like, I'm going to be able to show them, like, we've saved X amount of dollars in fraud. And I remember I wrote my first fraud rule, um, based on a trend that had come in, you know, uh, with debit cards and I was, I was ready to go. I typed up my memo and you know, at that time it was, um,
00:05:28
Speaker
uh, an authority matrix. So, you know, you had to send it in for approval and it had like an impact of, I think maybe 7% of card holders. And I was like, that's a good, you know, trend, like that's not going to impact a lot of people. And it was shot down so quick. And I was like, but, but wait a minute, we're going to save, you know, this, this much money, like this is a lot of money. What are we doing? And they're like, no, you not realizing like you only factored in.
00:05:56
Speaker
how many members you were going to impact over a month, but the dollars that you were showing us that we were going to save was over the course of 12 months. Really, you need to figure out 12 times more members were going to be impacted, and we're not going to allow that many members to be impacted by this. You've got to go back to the drawing board. At first, I was frustrated. I was like,
00:06:19
Speaker
Why? This makes no sense. What are we doing? Can't we just respond yes or no to a fraud text? Wouldn't that take care of this? It's just a little bit of impact. They're like, no, we don't want any impact. We want our members to be able to trust the process that it's going to work. You need to figure out how to stop the fraud without impacting the member.
00:06:42
Speaker
Being able to have that mindset shift of it's not so much about the losses as much as it is the experience for the member.
00:06:53
Speaker
That was just so eye-opening and also just awe-inspiring that an institution would take that stance. And then to find out that it's not just one institution, it's the industry, the credit union industry. I'm a big, huge fan. People helping people is how they were founded, but it resonates so much within each of their brands and I'm here for it. So tell me a little bit more about, you've been a fraud fighter at a credit union.
Community and Collaboration in Fraud Prevention
00:07:19
Speaker
but you've also taken up all this extra curriculum activity in the community of the fraud fighters in, I think in South Carolina, but also in broader area. So tell me a little bit about that and what you've been involved. I think you also joined a fraud retreat. Oh, well, yeah. Okay. So fraud retreat is a conference that is hosted by Amanda Jo Ervin. It's one of my absolute favorite conferences. Yes, I've only been once, but I've been asked to come back again this year and I'm very excited.
00:07:50
Speaker
The connections that I made that retreat, it's very, what's the word I'm looking for, where we are more connected, it's more personal, where you still get these big name people that are there to teach you, but you get to spend time connecting with them. They get off the stage and then they're sitting at the table right beside you. And it's crazy that they're more
00:08:17
Speaker
more personable, right? And I think that's something that we really need in the industry. The big flashy conferences are great, but ultimately once we can make those real personal connections with other fraud fighters, it's kind of like even like how you and I have connected. I don't know what I would do without this friendship that we have. It's one that I'm very grateful for.
00:08:39
Speaker
The fraud retreat did that for me. With the credit unions, while I was in credit unions, we started a fraud roundtable within QNA. QNA at that time was the Credit Union National Association, which they have now combined forces with NAFQ and they are now America's credit unions. But there was a post that went out on one of their compliance pages that said, you know, we need help with fraud at our institution.
00:09:08
Speaker
Well, there are a few other comments on it, like four or five. And so I was reached out to, um, and they said, Hey, would you help us run this, um, this round table? You know, it's just one meeting. We don't know what's going to happen with it, but we just want to see where it goes. We'd love for you to be a part of it. Absolutely. So we get on and.
00:09:26
Speaker
The first meeting was supposed to have like four or five institutions. We ended up having almost like 30. And then they were like, we need to keep this going. And so now when they meet, they have at least 250 different credit unions represented on this monthly roundtable.
00:09:42
Speaker
that is nationwide where we talk about the trends that are happening, how to combat them, what vendors they're talking to. So these are fraud fighters in credit unions talking to other fraud fighters in credit unions. And one of my favorite things that we did from that initiative or from those roundtables is we were able to bring in people to talk to credit unions, vendors and such that sure, they could talk about their product, but our stipulation was always, you gotta teach us something before you sell us something.
00:10:13
Speaker
Like don't try to give us your platform and try to sell us on this or that. We want you to teach us, make this, make your time with us so impactful that we appreciate what you've been able to give to us. So then we won't mind giving you, you know, 30 minutes for a demo and you know, an introductory call. Um, and it worked out really well for a lot of institutions and a lot of vendors.
00:10:35
Speaker
Now that I'm no longer with a credit union, I'm not a part of that round table. So that was probably one of the hardest decisions I made when leaving the credit union because I knew I would be missing out on that. But I also knew that I had a mission and
Online Scams and Resource Challenges
00:10:50
Speaker
a purpose, which is why I'm at Mission Omega is because I want to build something for credit unions that I know that they need. And so I'm hoping to be able to be a part of something greater than myself and greater than one institution.
00:11:04
Speaker
bring it to a lot of institutions in one. So that's really amazing. I think the ability of credit unions to come together and have a conversation about trends. Actually, I'm gonna take you before we get into more extracurricular activity. What do you think had shifted when online scams became such a big and critical meaningful impact or had such meaningful impact on your members in the credit union space?
00:11:33
Speaker
You know, how did the conversation shift from traditional account takeover fraud, new account fraud fighting to online scams?
00:11:41
Speaker
So, well, for me, especially, you know, I, I first came into my role at that particular credit union. Um, it was at the end of the year. And so there wasn't really any budget allocated out to me. So for me, I was noticing that there were these scams happening, but I didn't have any real way to like get in front of it behind the scenes, if that makes sense. Um, so what I needed to do instead was utilize what I had, which was.
00:12:07
Speaker
kind of my mouth and being able to talk about it and train people and get people excited about it so being able to you know personalize I guess our approach to educating victims or potential victims because we don't want to have victims you know we'd love to get in front of it so being able to change that narrative of
00:12:30
Speaker
Oh, fraud is bad. And please read this boring newsletter that I know you're not going to read. Instead, it was like, how do we get, how do we get people excited about learning more about fraud and, and, and teaching them, you know, the difference between what, what this scam is and how to protect yourself. And really it just, it just changed so much. And even because as, as I was on those calls with the other credit unions, it became apparent that we were all going through the same thing where our institutions were being, um,
00:12:59
Speaker
cloned, so to speak, or impersonated. And these text messages were going out to our members that they were trying to pretend to be the credit union, um, which they then were turned into like credential stuffing and mirroring. And it just, the problem was getting so big and it was happening all over that. I mean, we, as the credit unions, you know, the ones that were on the call, we were struggling with keeping up, like what do we do to get in front of it?
00:13:27
Speaker
So I think, you know, that shift happened when it was like they, they knew that there was a place to exploit and they, they hit it pretty hard and they hit multiple institutions. The scammers did.
00:13:38
Speaker
What are credit unions doing about this? It sounds like there's a challenge in terms of budget. And one thing is awareness that I think is maybe lower cost. Not necessarily, I would say. You still have to promote awareness through channels that are impactful and that does cost money. So awareness is one thing. And you've been highlighting every Friday, maybe you want to share on social media, credit unions that are doing a good job at that.
00:14:04
Speaker
Yeah. Um, so there are credit unions that, that do sometimes, you know, have a budget that they can allocate to this. And that's where we're working with our IT departments. And we're trying to figure out like.
00:14:14
Speaker
How do we take down these bad sites? It's one thing that if we can't really get in front of it, so to speak, and prevent the member from clicking on the link, what can we do when we find out that there is a bad account or a bad website that's impersonating us? And so working with IT departments to try to go dark web surfing and all that good stuff to try to figure out where these sites are and to take them down. But sometimes we don't have the ability to do that.
00:14:41
Speaker
And then sometimes fraud fighters or fraud leaders within these credit unions have a hard time pushing the narrative to marketing that says, Hey, it's okay to market fraud prevention. Like we need to do it because you keep wanting to promote all these new, um, these new products, these new services that we're offering to members, but at the same time that you're marketing them and not telling me about them, I can't do anything to help prevent any fraud. And you're letting fraudsters know, Hey, guess what? We've got some new shiny toy that we want you to exploit.
00:15:11
Speaker
And so for me, whenever I left the credit union, that was one gap that I knew that there was in the industry. And so, you know, how can I give back, especially while I'm in this kind of in between where, you know, I'm really learning my new role and how I can help, but at the same time, how can I still give back to that credit union industry? And what I did was, um, so now I've started a new campaign. It's, um, see you fight fraud, hashtag see you fight fraud.
00:15:37
Speaker
I post every Friday where I highlight credit unions that are doing a phenomenal job in the industry promoting fraud awareness.
00:15:45
Speaker
Um, they, you know, are doing Tik TOK videos. They're on YouTube. They're doing newsletters. They're doing Facebook posts that are featuring mean girls and, you know, just how they are marketing, um, fraud awareness with scams and the trends and things that are currently happening in their institutions. They've just done such a phenomenal job. So for me to get back to the industry, it's to show these other marketing, you know, executives that, Hey,
00:16:13
Speaker
other credit unions are doing it. And guess what? It's not hurting their brand at all. In fact, it's making them a trusted member focused, financially savvy institution. And so being able to give that back so that fraud fighters or fraud leaders can now
00:16:29
Speaker
You know, search for the hashtags, you fight fraud and they're going to be able to pull it up and put in their memos. Like here's how many, um, credit unions have been highlighted so far. Here's what they're
Building Fraud Awareness and Education
00:16:39
Speaker
doing. And here's how it's not impacting them. Like here's how they are getting brand recognition from highlighting fraud and, and scam prevention and awareness.
00:16:49
Speaker
Here's a webinar that was hosted. Here's an in-person member event where they hosted the elderly community to come in, their elder members to come in. And they had different speakers and they hosted a panel and they gave back and gave swag bags and things like that. Being able to give just something back, but at the same time saying,
00:17:11
Speaker
it's okay to talk about it and let's talk about it so much that they, our members, you know, will act like you do. Every time I talk about fraud, they're like, we know about fraud now. We get it. We get it. But it's not in a negative sense. It's more like a, they really are persistent. They want to make sure that I'm not going to fall for this. And don't you want to be that institution that warned them versus the one that tried to hide it? Absolutely.
00:17:39
Speaker
I think the huge difference between the classic fraud, which is account takeover fraud and scams, is that account takeover fraud, typically the customer doesn't even know. It's not a part of the fraud, right? It's on the bank to discover, it's on the bank to reimburse. So it's almost seamless to the customer. Maybe they'll find out that something happened to their account and they'll alert the bank. But for the most part, there's no shame. They did not get scammed. They're not the victim, right? And here when it comes to scams, we actually
00:18:10
Speaker
First of all, they know what's happening. So for a financial institution not to talk about it is really avoiding the fact that everybody knows about it. It's hitting us day in, day out with these messages and calls. So it's really stepping up, taking responsibility and saying, we're here to empower you to protect yourself from online scams. And we'll give you the tools. I just want to give a shout out to scam Rangers.
00:18:34
Speaker
I am the biggest fan of scam Rangers. I, from the moment I saw your product and what you're doing, I just was so inspired that, you know, there's, that's another way to empower members, right? Is, is with scam Rangers being able to
00:18:52
Speaker
You and I had conversations and unfortunately I'm no longer with a credit union that can make this decision, but I'll put this plug out there for anybody that wants to as we talk about marketing and fair play and what needs to happen with our members and how we can empower them. But my father-in-law and pretty much any other family member that I have, they reach out to me almost daily and say, hey, is this a scam message? I can't tell you how many screenshots I get from my grandmother that says, is this a fraud?
00:19:20
Speaker
And it's like, yes, it's a fraud. Don't, if you're asking me, it's a fraud. Um, but you know, I, when I saw scam ranger, I had the thought of not everybody has someone they can call or they can text and say, Hey, is this the scam?
00:19:36
Speaker
You know, and, and what scam Rangers does is it empowers the consumer to be able to, you know, have their text messages risk ranked and to know, Hey, low risk, low risk, high risk. And here's some steps you can take to protect yourself. So I just wanted to shout out scam Rangers while I had the time to do it. I am such a big fan. And I just know that, you know, once it,
00:20:01
Speaker
If credit unions even knew that there was the ability to put this on their website and make it where your members can click in on ScamRanger and they can upload a message and determine, hey, high risk, low risk, and you can even customize with marketing. I just think that this is just a huge win and something that is so needed in the industry.
00:20:23
Speaker
While I had my five minutes of fame, I was going to shout out Scam Rangers. Thank you so much for the product. Like truly big fan. And I just see that it will be such a mover in the industry and an empower for citizens and consumers. So just wanted to take the time to thank you also. I appreciate that very much. Thank you so much. Of course, if anyone wants to learn more, they can reach out to me.
00:20:51
Speaker
In terms of technology and process, and, you know, I think you talked a lot about awareness. What about internal process within credit unions? Like, for example, the customer support teams or the call centers, how has that at all changed with regards to online scams? So I know it's changed in the sense that, you know, for a few institutions that I have personal knowledge of,
00:21:17
Speaker
You know, they're changing the way that they talk to members. They're changing the way that they authenticate. They're changing the way really that the conversation flows. You know, they're looking for red flags and how the member is talking to them about whatever is going on. But at the same time, they're also trying to go in and see if there's any red flags or warnings on the account.
00:21:39
Speaker
You know, fraud fighters are doing their best to put like a trigger warning or like a red alert on an account within the court to say, hey, we're seeing this, you know, make sure to take extra precautions when authenticating over the phone. Because what you don't want to do is have a fraudster that has compromised credentials for that account takeover that you were mentioning, where it's a compromised situation and not where credentials were given.
00:22:08
Speaker
You want to make sure that when the fraudster is the one that's on the call impersonating the member, that your team in the call centers aren't allowing them to go through just because they were able to answer the questions correctly. We're looking at those tier one and tier two questions and saying, hey, can we answer all of these if we simply have access to online banking? Where's that defining or that line between
00:22:36
Speaker
what's readily available online in the, um, within the online banking and what would they need to know? Like if they were actually that person, like what's the difference? So you, you see that they are, I know that they are providing more education and awareness internally to those, um, teams, just because there's only so much that can be done on the back end once credentials have been given. Right.
00:23:04
Speaker
And even if it's not a credential theft scenario, like you talked about, maybe they have somehow gained access and now they're calling in, but maybe even if it's a case of someone is being coerced by or guided by a criminal to transfer money, and it's actually the legitimate customer you're talking to, how do you still identify those signs of coercion, you know, that someone is guiding them on the other line?
00:23:33
Speaker
That's where it gets hard. Yeah, that's where it gets really hard because in financial institutions, we're bound by regulations and things where we've got to make sure that funds are available. You know, we can't hold funds even if we suspect fraud unless, you know, South Carolina has the law in place, which is the Elder Financial Exploitation Bill where if a financial institution suspects that there is fraud or misappropriation or
00:24:00
Speaker
some type of financial exploitation of an individual 55 years or older or that's medically handicapped, then we can hold funds for 30 days.
00:24:12
Speaker
Um, and, and that's, but again, if you've got to be 55 years and older, um, and right now, you know, these scams are targeting like the, the 25 to 60 ish range. So, you know, in some cases it can help, but in others it can't. And so when you have those conversations with your, with your members, it's, it's hard to get them to understand that they have been, um, a victim because number one.
00:24:40
Speaker
they don't want to be a victim. So it's like, no, that, that can't be so because I have, this is a trusted person. And where we're trying to talk them out of doing a transaction within, you know, 10 minutes of them making the decision to do it, coming in to do the transaction right at the start of transaction, we've got max, maybe 10 minutes to talk this person out of it.
00:25:03
Speaker
But meanwhile, they've been coerced for the last two years. They've had this relationship built up for two years and, and not even that, maybe it's, it's a, you know, shorter relationship, but ultimately they've been, um, you know, tricked into doing this. And it's been, it was such a believable lie that they were coming to do the transaction.
00:25:27
Speaker
So for us, when we even try to talk a member out of doing a transaction, we get a lot of pushback. And that's where we've got that member friction aspect that I talked about in the beginning that we have to struggle with too.
00:25:40
Speaker
Do we allow this transaction to go through knowing that this is ultimately going to lead to a fraud? And so what I started doing in my role at that time was when I knew that it followed a pattern and I could 99.9% say that it was a known fraud because it was an established pattern that I'd seen exactly through the credit union before, then I would say we will not knowingly participate in fraudulent activity.
00:26:07
Speaker
So we've got enough information now to determine that this would result in a fraud. And so we won't allow you to use our payment methods to disperse these funds to the fraudsters, but you can come and get your cash. And that's where we would stop it is like they would have to then physically come in and talk about it and get in front of somebody and have that conversation. But it's really hard to do that with every conversation. And it's really hard to do that when you've got those persistent people.
00:26:37
Speaker
You mentioned the regulation in South Carolina that talks about the elderly and the ability to withhold funds in a very specific case. I know that you've been active in general in South Carolina advocating for cryptocurrency investment scam detection or enforcement and other initiatives. Tell me a little bit about that. I think that's something really interesting and something to take note of across the U.S.
Crypto Scams and Legal Challenges
00:27:03
Speaker
So
00:27:04
Speaker
Everybody I feel knows Erin West at this point, the district attorney in Santa Clara, California, who has pretty much coined Operation Shamrock and how to recover those funds that were lost to pig butchering. I had a member once that had a, she was a part of a scam and basically she had taken her money out and gone and deposited it into a Bitcoin ATM.
00:27:34
Speaker
And she called the credit union almost immediately after she did the transaction and said, I just have a bad feeling. And it's always because it's right at the end of the transaction that you have that feeling that.
00:27:48
Speaker
Um, Oh, you know, now that I can sit and think about it, maybe there were red flags that I should have listened to. And so she called and said that this is what had happened. She gave me the whole spiel and I said, well, do you still have the receipts? I knew that, you know, I could use, I had seen a post before about the receipts and got to have those and got to do it within a certain timeframe. So I was like, Oh my gosh, we might be able to get this woman her money back. And I was very excited. I didn't disclose any of that to the member at the time, because I didn't know if it was going to work.
00:28:16
Speaker
But I was ready to be the first one to pull it back in South Carolina. I was so ready for it. And so I had the information reached out to Aaron and I was like, Hey, do you happen to have anybody in South Carolina that does the crypto tracing? And she was like, I don't know, let me look. And so anyways, it was a bit of back and forth. And then I talked to some other investigators that I was familiar with and local and state agencies and said, you know, what can we do? And they said, we can't do anything at this time.
00:28:46
Speaker
Like there's nothing we can do. You can transfer it to the feds, but the feds probably won't look at it because it's under a certain dollar amount. So, you know, we're, we're stuck. We don't have anything to do or there's nothing we can do. So.
00:28:57
Speaker
I was completely deflated at that point. Kept listening to Erin, kept talking with her and asked her if she would host a training for us. Like if we hosted a training, a lunch and learn for law enforcement and could get a bunch of law enforcement in one room, would she be willing to do a virtual training for South Carolina law enforcement?
00:29:18
Speaker
She agreed because she's a saint. We did the virtual call and she trained everybody. I want to ask how you got law enforcement to come to the training. Yeah, you're right. You're right. I made friends. I'd been building up my relationships with law enforcement over the last like two or three years at that time.
00:29:42
Speaker
And so I'd made friends at sled who also happened to be the Carolina's chapter president for the IFCI. Um, and so I reached out to her and I was like, Hey, if we get like a lunch and learn, like, can we get some law enforcement together? Like we'll provide lunch and everything. Like, can we just get them there? And she was like, Hey, I'll send out the invite. We'll see what happens. And we got a lot of interest. Like we had over, I think 40 participants that day.
00:30:08
Speaker
It was a great, it was a great, great day. Um, but yeah, they, and they were all very excited. Like it wasn't like, I'm just here for a free lunch. Now I was all for just paying for their free lunch, just to get them to listen. Like, you know, I'll, I'll pay for your lunch. If you'll listen to me.
00:30:23
Speaker
You know, um, but they, they came willingly and, um, it was so funny because as soon as Aaron started talking, all the food just like stopped, like all the chip bag rustling, you know, all that just quit. They put everything down and they were taking notes. And I was just even more on fire after that.
00:30:41
Speaker
So, yeah, during that training though, like afterwards is when we realized, you know, looking at our state law, that the state law was not specific enough to cover digital assets in the recovery of a financial fraud. So, the statute, you know, I pulled down the, there's a template that was out there for this search warrant that Aaron West conducted, you know, with the Santa Clara, California,
00:31:11
Speaker
And so I pulled that and tried to compare it to like our state law, no legal expertise here, just full disclosure. And so I was like, oh, this one says digital assets. And I was pulling it over and I sent it to some law enforcement buddies and I was like, Hey, what do you think would this read, write? And they were like, no, that's if the funds were stolen or, you know, a part of a drug bust. And I was like, well, well, you know,
00:31:37
Speaker
Maybe, maybe we could pretend they were like, no, that's not how it works. So, you know, we went back to the drawing board and I was able to, you know, get the thoughts together and we got some, really some, some other individuals in South Carolina that said, Hey, I want to help. Like, what can I do? So we're, we're forming this crypto coalition, figured out where all the
00:32:01
Speaker
gaps are in state legislation and the various things that we need done. For example, funds to give to these agencies so that they can trace crypto. That's not something that's currently budgeted for with these agencies. Being able to provide the means for that and the
00:32:22
Speaker
written proposal for why we need what we need changed and why we need resources or why we need resources allocated additionally to these other law enforcement agencies. So we got all that information together and luckily I was able to do a presentation in front of Senate President Thomas Alexander in South Carolina where I mentioned the issue that we had and
00:32:46
Speaker
I talked about how we needed to change, you know, legislation because South Carolina law right now is holding us back. And I watched him take notes and I was so very excited. Um, and he went to leave, you know, right after he spoke and he came up to me and he was like, I want to continue this conversation. Like we get out, we get to talk. I want to help. And I was so pumped after that. That was in November. Um, and it is now April and we've had a hard time getting, um,
00:33:14
Speaker
booked. But I'll tell you, it's been hilarious because
00:33:17
Speaker
If you're trying to get in touch with lawmakers in your state, if you utilize your state's website and the contact doesn't send an email, that website is audited and they have to respond to you within a certain number of days. So every time I send a response there, I get an immediate call or something and it is great. So just an FYI for anybody going forward. So we do have some time
00:33:44
Speaker
booked in the next couple of weeks. So I'm very excited. But it's a matter of kind of like drafting the bill. And, you know, again, I've given you that disclosure of no legal expertise from me. So, you know, that's where we're at. That's amazing. Because, you know, you're just I think a lot of listeners to this podcast are front fighters. And what you're doing, very humble about it. But what you're doing is you're saying, OK,
00:34:14
Speaker
As a fraud fighter in a financial institution, I want to be able to help my members, right? Help my members, my customers, but the framework right now of law enforcement recovery is just not there. So yes, I can do awareness and I can do tools and technology and process for prevention and handling the situation, but can we go the extra mile and assist with recovery because we know it happened.
00:34:40
Speaker
and expedite that and also ensure that we have the legal framework and everything. And you're not just saying, okay, there's nothing we can do is good enough. You're actually driving this. And I think many fraud fighters in different states can take notes and maybe reach out to you and say, okay, I think you talked about creating a playbook. Yes. Yeah. I'm working on a playbook. I was talking with Aaron and it's like,
00:35:07
Speaker
You know, if California can do it, right, you know, make it a competition. I'll make it a competition. If California can do it and South Carolina can do it, there's literally no excuse for any other state for why you can or cannot do something.
00:35:23
Speaker
The West Coast and the East Coast can combine forces and they have no issues doing it. We're forced to be reckoned with right now. I'm just excited because imagine being able to tell your victim, because right now as a fraud fighter, when the funds are gone, they're usually gone in a wire scam. If you don't react fast, the money's gone and your financial institution is liable for it.
00:35:51
Speaker
Sure, you've got some institutions that will pay that back, but you have others that don't. But imagine being able to say, I've recovered your funds. I didn't take a loss for you. I recovered your funds. How empowering would that be for fraud fighters to be able to say, I've got the trace number. I've got the information. Here's everything you need to know law enforcement.
00:36:12
Speaker
fast track this over to a local agency that has the ability, or not even the ability, but the time and the resources, because the larger agencies may not be able to do something, but the smaller ones may have the ability, the capacity to investigate these crypto crimes. They may be able to assign someone to it.
00:36:34
Speaker
Imagine being able to go to your local county office and say, hey, I've got this case. Here's the information. All you've got to do is trace it, submit the subpoena, and then we've got the funds back. Like how empowering is that for fraud fighters on the banking side and the law enforcement side? Like, I mean, we're going to be able to just ultimately crush this. So I'm super excited. It's like so many things working. And yes, it's all like on my own.
00:37:01
Speaker
Time and like my own advocacy things but it's because it's gotta get done. I want it done. It's one of those things that if I want to see it done and you know in a in a quicker time frame than what would be allowed or be able to be given from
00:37:18
Speaker
any institution or any organization, I've got to make sacrifices. And this is one I don't mind doing because it's going to benefit my state, other financial institutions. And it's something that as we continue to develop this, yeah, as we continue to develop the playbook, I mean, we can, it's repeatable,
Operation Shamrock and Future Goals
00:37:38
Speaker
right? Like go state by state. Why not?
00:37:41
Speaker
Yeah. So I think that ties really nicely into your activity. Speaking of another initiative that you're involved in kind of voluntarily, Operation Shamrock. So there was this huge exciting meeting that happened I think last a week and a half ago, where over 500 people joined a meeting led by Aaron West about Operation Shamrock. And you are one of the
00:38:07
Speaker
I think five team members jointly with another team lead. Tell us about that. What is your charter and what are your goals? So I am in the banking group. I'm one of the co-leads for banking and credit unions. I was very just honored that Erin reached out and she said,
00:38:32
Speaker
Hayley, I want you to help represent small banks and credit unions. Like you and I, we are cut from the same cloth, you get stuff done, and I just need somebody that can be that voice, give the voice to those smaller institutions. And so I'm working with a seasoned fraud fighter in banking, and I'm just so excited to get to work with her. Her name is Saskia. And so what we're doing is we are,
00:39:00
Speaker
We're creating accountability, right? And to say, we've all got these great ideas. We always do. I've got a ton. I can sit and spit ball ideas with you for three days in a row and not get tired.
00:39:15
Speaker
but how do we act on those ideas? How do we make something happen? How do we tackle these initiatives and create attainable goals and benchmarks and set those to where we are holding each other accountable. And this is not just in this banking group, but this is across all the sectors that are working together. We're saying, look, now banking has created this work stream, this presentation.
00:39:44
Speaker
what are the rest of the sectors doing? And being able to truly just say, hey, we want to get stuff done. Here's what we want to get done. Here's the timeline in which we want to do it, which is we are looking at the people component. How do we train everybody? How do we make a consistent training that can be offered across all financial institutions that you use to train your front line, you train your back office? And it's something that
00:40:12
Speaker
Because we offered the same training, all financial institutions are going to know this is pig butchering. These are the red flags. This is how you combat it. This is what you do when you don't have resources, monetary resources, and you can't implement new processes, new systems, but you can utilize your people. Here's the training.
00:40:35
Speaker
you know, go forth and multiply. Tell everybody else about it. And so that's the people aspect. Then you've got your process and policy. How do we talk with regulators and say, look, we want to do more to stop this, but our hands are tied because of X, Y, and Z. You've got to loosen the reins on one area and give us more guidance in another so that we can start saying, hey, because we know that this known pattern that meets
00:41:02
Speaker
XYZ is pig butchering, we can hold funds for two to three days and then reach out to the other financial institution. Give us some cushion so that financial institutions can then connect with the receiving financial institutions and say, hey, is this a known fraud account? Can you look at it and provide some insights? Should we keep these funds here? Of course, don't share PII, but look at the account, determine and say, hey,
00:41:29
Speaker
I'm sending you a wire that says it's for a crypto investment. Is your account that's receiving it? Are they an actual crypto business or is this some mom and pop shop that has also been compromised in some kind of account takeover scheme and then they're going to just send the money out and it's going to be just another form of mewling or placement or whatever. We've got to be able to do more with the information that we have because
00:41:58
Speaker
Banks and credit unions are the last place in the scam before the money is sent out. So when we're the last place, that's where everybody wants to place blame, but there's only so much we can do. So we've got to get regulation and policy changed so that banks can start being more empowered to hold back these funds that we know are a part of a scam.
00:42:18
Speaker
And then of course you've got the technology and the data. Like we should be able to rely more on our vendors and our software to do more to help us catch these. We've got so many transactions that are coming in and out of the financial institution. Why aren't you alerting us? Why aren't these systems working enough to say, Hey, this is an issue and we've got to, you know, stop it or take another look at it and determine
00:42:41
Speaker
if it's fraud or not, or if
Conclusion and Reflections
00:42:43
Speaker
it's pig butchering. So we've got, there's more things that need to be done and we've got the right people in the right chairs that can help push these initiatives. And I'm just so completely excited and honored to be a part of it. That's amazing. I know change will happen with such a force multiplier, 500 people. I think it's going to be 126. It was crazy. Yeah. I was on that too. It was amazing.
00:43:09
Speaker
very, very inspiring. I know a lot of the listeners of this podcast were on there too. It was good to see some of them.
00:43:19
Speaker
Hailey, I think what you're doing is amazing. I'm so inspired by your work and I know that a lot of this is kind of like volunteer work from your perspective, but your passion is so powerful and I know you're gonna move mountains. I wanted to thank you so much for joining me today and for your time and for everything that you do. Thank you so much, Aylett. It's been a pleasure to have you on the podcast today.