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The Australian Formula for Tackling Scams: A Shared Responsibility Approach, A conversation with Toby Evans, Head of Economic Crime, Australian Payments Network
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In this episode, talk to Toby Evans, Head of Economic Crime, Australian Payments Network to explore the newly introduced Australian scams prevention framework and its implications for various industries. We discuss the importance of collaborative efforts across sectors, including banking, telecommunications, and digital platforms, in addressing the growing threat of scams.
Key Themes:
- New Legislation Overview: Introduction of a draft scams prevention framework open for comments until October 4, 2024.
Key principles include scam prevention, detection, and disruption. - Scope Beyond Banks: Emphasis on the involvement of multiple sectors, including telecommunications and digital platforms.
Recognition of the shared responsibility to combat scams. - Significant Penalties: Overview of substantial penalties for non-compliance, with fines reaching over $50 million for severe breaches.
Importance of companies taking proactive measures against scams. - Collaborative Approach: Insights from Toby Evans on the necessity for all industries to work together in the fight against scams.
Discussion on how a unified front can enhance protection for consumers. - Proactive Measures and Strategies: Importance of businesses implementing robust anti-scam strategies.
Encouragement for sharing intelligence and aligning efforts to create a safer environment.
Follow Toby On LinkedIn: https://www.linkedin.com/in/toby-evans-635661231/
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. h
ttps://www.linkedin.com/in/ayelet-biger-levin/
ScamRanger: https://scamranger.ai/
04 Sep 2024 · 46 minutes
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Transcript
Australia's Comprehensive Anti-Scam Approach
00:00:00
Speaker
What's happening in Australia is we, as I said, we don't take the same or we take fraud and scams very seriously. We expect real action. And that's what's been great about the National Anti-Scam Centre, because when we're all sitting together in the room and we're going through a work group or a fusion cell on a particular scam type, you look into those industries saying, well, what what are you doing to do this? So you're making that, I guess, accountability across our ecosystem. The government's taken a very strong leadership stance on this.
00:00:28
Speaker
And if certain sectors aren't doing their part, they're getting significant media pressure. And our ah minister has been very, I guess, assertively in the media, calling out who's not doing enough. And now we're moving to this model where we're going to have scam codes introduced to parliament this year. And that will ensure that it's a whole of ecosystem approach. We're not just regulating one part of the ecosystem because one part of the ecosystem alone cannot stop scams or mitigate scams effectively. It's going to take that whole of approach and everyone needs to do their part.
00:01:04
Speaker
The Australian scams prevention framework introduces new legislation aimed at protecting Australians from scams. It was released just a few days ago as a draft and open for comments until October 4th, 2024. It sets principles for scam prevention, detection and disruption. And what makes this framework unique is its broad scope involving multiple sectors beyond just banks like telecommunications and digital platforms.
00:01:31
Speaker
Under the framework, penalties for non-compliance are significant, with maximum fines reaching over $50 million dollars for severe breaches by corporations.
Introduction to the 'Scam Rangers' Podcast
00:01:40
Speaker
The framework also mandates companies to proactively block scams, detect suspicious activity, and share scam intelligence with regulators, ensuring a coordinated effort to reduce scam risks across Australia.
00:01:56
Speaker
Scam Rangers a podcast about the human side of fraud and the people who are on a mission to protect us. I am your host, Ayere Piger Levine, and I'm passionate about driving awareness and solving this problem.
00:02:14
Speaker
Today's scam ranger is Toby Evans, head of economic crime in the Australian payments network. I first met Toby virtually at the global anti-scam summit in Brussels this year. And I was really impressed by the perspective that he brought to the table with regards to what is being done in Australia. In this podcast episode, we talk about the approach to combating scams that the Australian government and industry players are taking in collaboration, which is different from other strategies introduced worldwide and the results of this approach, which have been very successful.
00:02:53
Speaker
Okay, i'm I'm really excited to have our guest today. Toby, welcome to the podcast. Thank you. It's great to be here. It's great to talk to you. I've been a long time listener and first time caller.
00:03:08
Speaker
Absolutely. So we're continuing kind of a journey around the world. Last episode we talked to folks from the Netherlands and I'm so excited to have you from Down Under in Australia and I think we have a ton to learn from you when it comes to an approach for scams.
Toby Evans' Journey in Anti-Scam Efforts
00:03:27
Speaker
But before we dive into that, I wanted to ask if you can share a little bit about your background, um your current role with the Australian payments network and how you got there. It's a really intriguing kind of journey of how one is put in such a position. Oh, it is a long journey for me and probably not a traditional journey, but
00:03:48
Speaker
For me, after university, I actually joined the police in Australia and I became a detective and that was investigating all sorts of crime, which also included financial crime. Then sort of moved my way up to, we had like a state based crime and corruption commission, which was organised crime, but also political and police corruption. And that sort of got into the money laundering space. And then after driving into the money laundering space. And this is like all the sort of hawala networks and trade-based money laundering and so forth. I got into a national agency called the Australian Criminal Intelligence Commission. And that was about collecting at that stage like domestic and international intelligence on serious and organised crime threats in impacting Australia. And that led me into um sort of a global space where we were working with our international partners to infiltrate and investigate money laundering networks. and
00:04:39
Speaker
It was an amazing organisation because it also had these coercive powers where people didn't have the right to silence so you got to speak to criminals and find out what they were doing and they had those coverage and managing human sources and COVID operatives and deploying them into those money laundering syndicates. So it was a really eye-opening space across all sorts of crime and financial crime but obviously it all leads, all those predicate offences lead to money laundering. And then from that are now in an organisation called the Australian Payments Network. And it's an industry association and has 150 members, so the banks, ah credit card companies, FinTechs, payment service providers. And what that also does is self-regulation in the payment system. So it works to deliver confidence in payments. It works very closely with our central bank
00:05:31
Speaker
ah regulators and our members to deliver its standards and regulation. But a key issue for our members is economic crime. And that's my role. So I'm the head of economic crime. So we do a number of initiatives with government and regulators to mitigate economic crime in the payment system and really important work. And some of that's like the advanced encryption standard to be quantum computing ready. It's our card not present fraud mitigation network. And the big topic is scam, scam, scam. So that's my bread and butter at the moment.
00:06:00
Speaker
So I think it's really interesting to bring such a well-rounded background and really understanding how criminals work into this organization that is really focused on payments and how do we make payments better and grow the business and make it faster and more convenient for customers and more efficient for financial institutions. But then that aspect of crime ah that you bring in and that understanding of of the and os and um that really, I'm kind of almost really glad that that's your background ah for the purpose of, you know, there's someone responsible who knows what he's talking about in that ah side of the business. So that's really interesting. Thanks for sharing.
00:06:43
Speaker
So I really want to hear about the work done in Australia and the approach to the holistic approach to fighting scams and I'll call it the collaborative approach as well.
Collaborative Industrial Approach to Scams
00:06:53
Speaker
So in Australia, you shared with me in the past, there's the anti-scam center that brings all industries together. um I wanted to maybe ask you how it came to be and what exactly is the overall approach of this organization?
00:07:08
Speaker
The formation of our national anti-scam center has been a game changer. So it came in in July, 2023. And what it did is it needed a space where there was so much blame game happening in the scam ecosystem that it needed government leadership to bring all the players of the scam lifecycle together. So we know that's telcos, it's digital platforms, it's banks and payment systems. It's the crypto industry, but more importantly, it's also law enforcement.
00:07:38
Speaker
to bring them together so everyone needs to do their part. And we'd hear a lot about people saying, oh, we take fraud and scams very seriously. But there wasn't that cross collaboration across the ecosystem and people weren't delivering the action that was required. And we all needed to join up. The digital economy um transfers across all those industries and we can't silo that, we need to do that as well. And that's what's so important about the National Anti-Scam Centre, bringing us all together in a room so we can share those insights.
00:08:07
Speaker
um share best practice risk mitigation strategies, but also importantly give clear case studies where government needs to lead to legislative regulatory change, which where we're doing and how they can help us and and vice versa, how we can help them.
00:08:23
Speaker
So now I'm going to throw that curve ball at you. I think one of the biggest challenges, at least for me here in the US, is who has the motivation or what are the motivations for the different players in the ecosystem to really come together and tackle all this problem? So if we talk about the scam lifecycle, we have the operating, you know, think about mobile devices or phones, we have the operating system vendors, we have the social media platforms, the telcos, as you mentioned,
00:08:51
Speaker
that direct messaging platforms, and then the financial institutions, law enforcement, et cetera. I definitely understand the motivation for law enforcement and the mode I think it's mostly lack of resources that's always been a challenge. And I understand the motivation for financial institutions because their customers are coming to them asking for reimbursement, for help. They're expecting the bank to safeguard the money.
00:09:14
Speaker
The challenge has always been, you know and UK has also said the industry needs to come together and that's been a play there as well. But there's always been a challenge with what is the motivation for tech companies and what is the motivation for telcos?
00:09:30
Speaker
to really come together and share besides you know not to appease besides appeasing the regulators, appeasing the government. How can we position a motivation or how has the the this ah organization in Australia managed to bring everyone together and truly bring everyone together to take action? What I think it's done is we can all see the harm and the horrific harm it causes on consumers and businesses. And what it's shown that we all have a corporate responsibility to stop it. But I think we've come to a greater issue that in addition to that significant and horrific harm, that there's now been this erosion of trust across the whole digital economy.
Trust Erosion and Corporate Responsibility
00:10:10
Speaker
So all the gains that we made from the efficiencies out of the digital economy had been taken away. So you think of the telco industry, people don't answer their phone anymore. ah People don't check their emails.
00:10:22
Speaker
anymore. ah Businesses can't use clickable links on a text message anymore. ah When you think about digital platforms, can you trust the advertisements that you've seen? We've seen about the high losses to investment scams and how um whether it be internet search engines or the false advertisements is is hooking in and phishing in those customers. So there's that erosion of trust across that whole digital platform. For banking and payments,
00:10:47
Speaker
who are you actually paying with you know confirmation of pay solutions? And then also the challenges with real-time payments, being able to trace your money in real time and be able to repatriate it and recall it back and moving through those challenges as well. And then of course the crypto industry, which was used as you know a significant money laundering gateway for organized crime. So there's been this whole erosion of trust across the digital economy. And then you have to ask yourself,
00:11:13
Speaker
What is the impacts to the economy as a whole? And even when you talk about UK, it's become so great, the class that is a national security issue. And that's the level it's got for most countries and around the world. So I think we've got to a point now where you know with the government or all those interest industry industries say, hey, we have to do something. Then also from crime, police are responding to that because they're dealing with volume and violent crime on the street, whether it be domestic violence or or street crime or so forth. But now you've got so many victims and they want justice. And hearing, oh, it's the criminals are overseas. We can't do anything. We don't have the resources. It's not good enough now. And the community wants justice and they deserve justice. And so that's why we've got to do it together, because one part of the ecosystem or lifecycle is not going to solve this. We can't the way out of the problem, we can't arrest the way out of the problem, but they all have their part. And I think that's now where we need to do this sort of toolbox approach where, this multi-prong approach where we all get together. And not only domestically now, but we need to do it globally. Because there's a global problem that needs this global solution. And that's the new challenge. So I talked about two things. ah First, I want to say, I heard a nuanced culture difference potentially, and hard for me to say that. but
00:12:31
Speaker
because they see how harmful it is. And so so the caring seems to be a component of action beyond the, because there's always like the the financial gain versus the impact. And so how much is that part of really truly ah action taken by organizations? we'll We'll put the tech platforms aside for a second, because some of them are American companies, most of them.
00:12:58
Speaker
um but But when it comes to other players like telcos, do you feel like that social care aspect is ah is a cultural thing that impacts the action? I think so. And I think look the harm that we're seeing that's happening to our consumers and I said comes down to that corporate responsibility.
00:13:18
Speaker
But also, what's happening in Australia is we, as I said, we don't take the same or we take fraud and scams very seriously. We expect real action. And that's what's been great about the National Anti-Scam Centre, because when we're all sitting together in the room and we're going through a work group or a fusion cell on a particular scam type, you look into those industries saying, well, what what are you doing to do this? So you're making that, I guess, accountability across our ecosystem. But more importantly,
00:13:46
Speaker
The difference in Australia is the government's taken a very strong leadership stance on this. And if certain sectors aren't doing their part, they're getting significant media pressure. And our ah minister has been very, I guess, assertively in the media calling out who's not doing enough.
00:14:06
Speaker
And now we're moving to this model where we're going to have scam codes introduced to parliament this year, and that will ensure that it's a whole of ecosystem approach. We're not just regulating one part of the ecosystem because one part of the ecosystem alone cannot stop scams or mitigate scams effectively. It's going to take that whole of approach and everyone needs to do their part. and if you're Operating in Australia, you need to comply with those codes. It needs to go before parliament this year, but then off the back of that, there'll have to be the detail behind it. So what's happened is the industry groups in Australia are now foreseeing what's going to happen in the scam codes. So tell me about the scam codes and that the government is working on. What is their goal and what's going to be included as far as you know, I know it's still in process. So the government
00:14:53
Speaker
has identified that's going to take an ecosystem approach to mitigate this problem. And it will require all sectors of the scams lifecycle to comply. And they'll need to comply and they'll need to have minimum standards of what they can do to mitigate it. um So it'll be the telecommunications industry, it'll be digital platforms, be banking and payments, and then other sectors will be brought in over time.
00:15:19
Speaker
So the proposal for the government is to introduce that before Parliament this year. If that passes through Parliament, it will then need to be supported with a variety of detailed codes and standards about what those minimum obligations would be. And if you don't meet those minimum obligations, you'll be on the the hook, whether it be for compensation or financial penalties. so The detail is yet to come out, but that's the proposal um from government, which have received an awful lot of support across um the Australian community and especially industry. And what we've actually seen at the moment is because that's coming and because of the political pressure from the National Anti-Scam Centre, which is identifying these case studies and vulnerabilities, industries are now releasing codes and frameworks that are voluntary.
00:16:05
Speaker
trying to foresee what potentially might be in the code. So they're doing this heavy uplift. And that's why in Australia, we're already seeing um significant reductions. debt So the reductions in Australia, 13% is the fictional government data, but from our industry data, we're seeing up to 30 to 40% reductions. So for example, about A lot of that is within the investment scam category, but we're also receiving up to 70% reductions in crypto investment scams, particularly. And we all know investment scams is a lion's share, and that's where we're seeing the drop.
00:16:43
Speaker
I think the traditional scams have been in the range of $1,000 to $2,000. But when we talk about investment and especially crypto investment per victim, the numbers can get to tens of thousands to up to millions of dollars per victim. So definitely first place to tackle. How has Australia been successful in reducing the scams? What tactics were deployed in order to actually drive that change? Which is amazing.
00:17:10
Speaker
Look, there's been an awful lot of tactics. So put it down to one. I don't think you can.
Proactive Measures Against Scams
00:17:16
Speaker
But I think if we break it down, so if we look at what's been government led, they've been doing something very unique with website takedowns. We know um the false websites and the false advertisements are the the key enabler from scams.
00:17:30
Speaker
and government has rolled out this process where were they taking down those identified sites. So since the formation of the National Anti-Scam Center, they've taken down over 7,000 websites. About 5,000 of them are investment scam related. Of that 5,000, about 1,000 are crypto. And now after doing the pilot on investment scams, they've rolled it out to other scam types and importantly, phishing.
00:17:57
Speaker
and also online shopping as well. And already they've taken down over a thousand of those. So that's been a significant outcome. um We already have codes in the telecommunications system under our regulator, and they've been working very closely with the banks and other businesses as well. So this is to initiatives for SMS blocking. They've blocked about 250 million SMSs
00:18:26
Speaker
ah huge amount of ah telephone calls and also importantly with the alpha tagging challenges and putting hygiene within the telecommunication system so businesses can you know ah control the use of their numbers so they're not being spoofed but also control the use of their alpha tagging so they're put in frameworks and and um codes and legislation around that as well so some really good initiatives in that side and also while we're on the telecommunications industry the police have been working on taking down the SMS sim boxing syndicates and this is transnational organised crime coming to Australia using these sim boxes which can hold up to 300 sim cards and each sim card alone can send an SMS every two seconds
00:19:14
Speaker
And we would have been absolutely flattered with them. So law enforcement's done a great job there. So let's but just ah stop to explain that for a second. So when there's a volume or mass sending of a message from one number, then the telcos can easily identify it. But then when these SIM boxes are used to send a message every two seconds to a single number, but then you use hundreds of those, they come from different numbers, right? And and so that that's how criminals went around the volume-based blocking.
00:19:42
Speaker
to be able to still send messages. So the so what I'm hearing is that but police were able to actually identify and take down those operations as well. Yeah, they did a National Day of Action, so all around Australia as well, and and took out those syndicates. And look a lot of these operators were mules sent from overseas countries into Australia.
00:20:05
Speaker
But like what was key about police doing that is they identified what the vulnerabilities were, like how can criminals get 300 SIM cards? So those insights then go to our regulator and then they can look at, look, how are we going to block this? How are we going to work with the telecommunication system to um networks to stop this vulnerability and close that gap? And that's what's so important about all working together. But then they're also working with our banks. So then we can do the greater controls where customers will answer their phone. They know that phone call is coming from their bank and it's not being spoofed by a criminal. So putting some technology solutions around that for in-app verification and so forth. So it's been some really good collaborative work, a lot more work to be done, but really good collaboration.
00:20:48
Speaker
So you've been to, I know you've been to the Global Anti-Scam Alliance Conference in Brussels, and I'm sure you've been to kind of a few conferences around the world and you're collaborating with the colleagues in different industry professionals.
International Collaboration in Scam Prevention
00:21:05
Speaker
And I wanted to get your perspective on the difference between the approach in fighting scams in Australia um and the approach in the US and the UK, for example, or other countries, maybe Singapore. What do you think is working well and what can we learn? Well, I think the countries that are doing it best are collaborating and they're all making sure that everyone does their part. I think that's what the key. And when you look at the UK, everyone's been looking very closely at what's happening in the UK, but looking at what the potential unintended consequences are, but what's effective and and what's not. So in UK scams have only dropped by about
00:21:45
Speaker
5%, Australia, we're seeing some significant reductions. And I think that's what in Australia is because everyone across the scam lifecycle is starting to do what they need to do to bring hygiene into their sector. We haven't spoken about banking and payments yet, and they have a lot of work to do, but also in the money laundering side as well. But I think we can learn from each other. And whilst some countries can learn from Australia, we can learn from others such as Singapore or what the Dutch are doing and so forth.
00:22:15
Speaker
I think one of the things that um we discussed earlier is is that one is reimbursement and how our conversations, because in the UK, there's legislation that reimbursement for authorized scams will come and play in October this year. What has been the approach and conversation in Australia around reimbursements? Well, doesn't this one take a lot of conversation, whether it be the media, consumer groups or professionals. What's really interesting about the UK approach is no other country has gone down the same path, which is which is quite quite interesting yet. And obviously the in Europe, at the conference, it was a lot of discussion around it. But I think when we break down the UK model that scams are so bad that you're taking this approach where banks are going to underwrite those scams. And it's great for consumers because they get their money back, but criminals also get their money back as well.
00:23:13
Speaker
But the UK approach um doesn't cover um international transactions, which is that key pathway. And it also doesn't cover payments to crypto. We know for investment scams, that that's a significant category. So in Australia, we have the e-payments code that covers when banks are liable or not. And generally, that's for unauthorized transactions. Right. So those fraudulent transactions. But for that is still some scams as well, such as a remote, act potentially an on a remote access scam, unless there's um some form of ah gross negligence. And obviously the card systems has you know those sort of frameworks built in as well. But we're all watching to see what are the unintended consequences in the UK and how effective is it? And we've seen ah fire only a 5% drop and we're seeing a lot more um in Australia. And I guess what we're also asking and looking at is not only how effective is it, but what are the unintended consequences?
00:24:14
Speaker
um We know in Australia, and one of our banks released this data recently, that up to 45% of scam recipient accounts have a nexus to the UK. We're also seeing with their bank impersonation investment scams, they generally have a British accent. And we're asking questions, why is that? Is this potentially created a honeypot cottage industry in in the UK?
00:24:43
Speaker
um And in Australia also where there's other challenges where, for example, banks don't have a right to deny a transaction. Um, there's other, uh, questions about if it did come in the ability to fund that where we have 97 banks in Australia. And there's a big difference between our major banks and our small, uh, community, uh, banks and, and how would that work? Yeah.
00:25:11
Speaker
yeah And also de-banking and financial inclusion. We don't have a money laundering watch list in Australia. It's one of the things we potentially need with our AML reforms, but we know that often ah romance scam victims are money mules and some scam victims are repeat victims. And then if a bank has to underwrite that and they just choose to de-bank them, who is going to bank them? What would be the rules and and safeguards around that as well?
00:25:38
Speaker
That's definitely a challenge, I think, and that's something that that um I've heard a lot, that that challenge of if we can help our you know our customers or for banks, if if banks can help customers avoid the that part of the scam, the mewling, the unintended mewling, of course, um for you know either their money mules or repeat scam victims, um If we could prevent that, then, and I think the, the current younger generation is actually more susceptible to scams. So maybe today they're not very significant customer for the financial institution because they're young, but they often fall victim for a scam. But then, you know, in the future, there will be potentially a very valuable customer. So I think that's going to be a challenge. I think we need to take a different approach to protect these, these consumers.
00:26:34
Speaker
But I think for Australia is the government understands that in the UK, they've only regulated one part of the scam ecosystem, and that hasn't been effective. And the banks identified in their recent fraud inquiry in the UK that they can only stop about 60% of scams. And we know that the scams originate from digital platforms and the telecommunications industry, then the banks are at the end of that cycle. So it's going to create that ecosystem approach. so Regulating one part of the ecosystem is not effective. And the minister has spoken very strongly about this, that the Australian model will be an ecosystem approach. And if you don't meet those standards, that's when the financial penties penalties and potentially compensation will come in come into play. Now, the detail hasn't been released. We're all waiting on that really eagerly. But I don't think the UK model has shown
00:27:28
Speaker
to be effective as of yet with only that 5% reduction given all their other initiatives as well. So great for consumers, but criminals are also getting that money too. I definitely understand that that point. and I think the hope is that in the UK, if banks are liable, they'll take more more technical, you know more controls to put in place to prevent scams from happening, to stop scams. but um and and I've had also many conversations with the fraud leaders in the US about, okay, what do we need to
00:27:59
Speaker
Is it going to take reimbursement for them to put controls in, or can they just put controls in? ah So there's it's also going to be a prioritization of where do I put my ah controls based on you know the liability and and the cost as well. So I think that's a balance. um but But really fighting, but there are two aspects here. One is on the bank level and the cost to the bank, but the other one is the transnational organized crime that is stealing billions of dollars out of our economy, that larger scale. And I think that's the point that the Australian government has been able to grasp, unlike some other countries and the UK as well.
Crypto and Financial Crime Collaboration
00:28:41
Speaker
One question that I wanted to ask is about crypto in particular. I think in the past you mentioned something that was really interesting for me. How do you collaborate with cryptocurrency, you marketplaces and and providers in terms of allowing them or or
00:28:56
Speaker
their ability to act within Australia. That's what was key with the National Anti-Scam Centre. It brought the crypto industry and the banking sector and payment sector together so we could work collaboratively through these issues. like The fraud density to crypto was was telling. The fraud density was significant and it was the major off-ramp and controls needed to be put in place. But by working collaboratively together, we've been able to find, I guess, balance for those um digital currency exchanges that are cooperating with the ecosystem, but also identifying those that refuse to. And some in the even in the media were saying, hey, we will not cooperate with you unless we get a police request or a warrant. And that does not attainable. the The police do not have the resources to be drafting up warrants or requests for funds tracing and working collaboratively. So the banks implemented friction and in our sector,
00:29:53
Speaker
The appropriate risk based friction is a key topic and while we have the ah push for real time payments, we've also realized that has to be some forms of friendly friction in place. And this was putting holds on first time payments, um putting holds and limits on cryptocurrency exchanges. And that's by working with those individual exchanges and seeing what those fraud densities were, working collaboratively with them for KYC and enhanced customer due diligence, obviously understanding their controls that it's not just verifying who's opening that account, but why are they investing in it. For example, if you've got a 70 year old first time investor in a crypto, who says that his financial advisor who he started
00:30:37
Speaker
discussing on Facebook or WhatsApp recommended these investment strategies. Well, that's a red flag and it shouldn't happen. So working with them on that, but that's what's led to the reduction. As I said, that is the ah blocking of some exchanges, but also putting the friction or the controls and the limits on other exchanges as well. And working together with them has been key on that. And what's also been great with that industry is they've now joined our unique fraud um reporting exchange that's operated by the Australian Financial Crimes Exchange. And that means that when we've got cases or investigations um and looking to see where funds have gone and to be able to trace and recall them, we're all working together on one system. So in a way they're treated like another bank and another financial institution as well.
00:31:26
Speaker
And it's really good exchanges out there and there's some really good people out there that are doing some, some great work. But as we all know, there's also those outliers that are not. So those, those crypto exchanges that are not collaborating with you, what, what happens? A lot of time they're blocked or there's extra owners friction on them. Some have gone out to say that we will not be providing or facilitating transactions to you.
00:31:55
Speaker
but there's others that are that are that are very good. And there's, I guess, appropriate friction on that as well. So it might be, for example, ah first-time payment holds or limits. So it allows the banks time to speak to their um customers and identify if it's gonna be an at-risk transaction or not. and that's And that's been key and that's been working together. So that that really required carefully identifying the patterns of, you gave some examples like ah maybe an old lady who is a first time crypto user and and I'm sure there you've right you've identified these types of scenarios and use cases that where you will introduce the appropriate friction and where you will stall things or or slow them down ah to protect the consumer, but then you can
00:32:44
Speaker
really allow those real-time payments and transfers and the required flexibility and in money transfers for all the other use cases. So that's that that's that approach is an intelligence approach that makes things really seamless, but also introduces the right friction. And I'm sure that people that are introduced to that friction are very grateful when they realize that they've almost been scammed.
00:33:09
Speaker
So that's amazing. One thing I wanted, I'm just curious, are these stories and these use cases shared with the public? Yeah, they they are. And that's what's so good about the National Anti Schem Center is they're releasing their annual reports and showing what's working and not, but all these case studies that we're doing in pilots, and there is no international best practice, right? There's nothing written down yet that say, Hey, this is the silver bullet. So we're all, we're all building the plane as it flies.
00:33:36
Speaker
But as someone in Australia identifies what works, we share that. We share that across the whole ecosystem or across all the separate industries and it's being published as well. And that's what's really good. And these these case studies will inform the SCAM codes about what works, what doesn't, um you know, how we allow for differences in size of organisations and flexibility and so forth and individual risk for particular customers.
00:34:02
Speaker
So they are being shared. And as I said, like some of the data came out recently, like, you know, you're looking at 70% drops in losses to crypto exchanges. You know, you're looking at 40% reductions in many scam losses for a lot of banks. That's that standing outcomes. I hope we'll see these numbers here in the US as well.
00:34:28
Speaker
Well, there's a lot more work to be done. I think any money lost to a scam is is too much. Absolutely. I wanted to ask you a little bit about the Economic Crime Forum. Well, it started off as the Fraud and Banking Forum. And obviously, we know that we tend to separate economic crime and financial crime, but there's a nexus between them all. um We know there's a nexus between fraud and scams and cyber enabled crime.
00:34:57
Speaker
And then, of course, they're all predicate offenses to money laundering. And what the body is, it's become the public and private partnership for the National um Law Enforcement Committee in Australia. So in Australia, we have each state has their own police force. There's a federal police and then there's other regulators such as the Australian, our investment commission and our intelligence commission. And then, of course, the ACCC which oversees our National Anti-Scam Center. So we bring them all together with our industry so we can work collaboratively. And it's become so key in this space to share information from public to private and private to public. And and that's what we do. So we've developed, um I guess, a number of ways where we can share
00:35:46
Speaker
data better with them because all their investigations need banking data, but all importantly, can we help them through their challenges of resourcing and upskilling and technology where we can use experts and our data sets to give them those intelligence leads that they need, whether it be in the current operation or strategically a potential new area that they could look in and they could investigate, which has led to some good outcomes already, but also um looking at how we can also potentially expand that globally as
Global Efforts and Challenges in Scam Prevention
00:36:21
Speaker
well. So we looked at, for example, um some remote access scams with India, and we worked collaboratively with India and built those relationships. As I mentioned earlier, so much of our proceeds of crime from scams is going to the UK. So we developed some intelligence packages and followed the money strategies. So our
00:36:39
Speaker
ah financial ah regulator could work with their counterparts in in the UK to follow the money and do some disruption overseas in the UK as well. So it's mostly the financial law enforcement and regulators. And as of course, much of the money goes overseas. So it's really extending that arm to drive collaboration with law enforcement overseas and regulators overseas as well. Has that been successful? ah Yes, it has been. And I guess that's a part of the issue. like in what pair what area overseas, who looks after that. So what law enforcement agency or what regulator. And so it's important that we work with government to go through those appropriate channels. But also what's important is in the economic crime space, there's so many um forums, whether it be Fintel Alliance or um tax groups that we don't duplicate. And now we've got our national anti-scam centers. So I guess by being the public private public privatev partnership for this particular area, it is law enforcement led.
00:37:39
Speaker
and we're there to help. We understand the challenges that we've got and we need to help them and a part of this solution that if we want law enforcement action is they are going to have to leverage off industry just to get the expertise, get the data and let us help them with their investigation so they are efficient and they are effective. So it's like you're coming full circle from your background in investigation and law enforcement and now bringing that back in the form of intelligence to support their operation. It is a full circle and industry has some very bright, intelligent people, but it also has a lot of data sets and they're seeing the losses, but where is that money going? And I think that's a question that we need to ask ourselves globally. You know, we're seeing these phenomenal numbers quoted for scam losses or fraud losses, but where is that money going?
00:38:30
Speaker
And what I would like to see is this next phase that as we all develop our domestic response strategies that government led look at greater coordination globally where we can see where this money is going and look at some more coordinated disruption strategies. And for government trying to walk work past potential geopolitical issues, um data sharing challenges, because we're going to have to move past that because victims want justice. But we need to do that disruption offshore as well, because we can't just compliance and regulate away the problem. We know the whack-a-mole effect of this game where the criminals will constantly find the weak links.
00:39:08
Speaker
But also these strategies, they give us those case studies that we need to either close those gaps or go back to government and say, hey, we need some legislative or regulatory change over here to help us so we can close those gaps for you. So like the United Nations anti-scam work stream? Well, but law enforcement is going to have to get together and government's are going to have to get together. It's affecting them all.
00:39:34
Speaker
It's affecting them all, but there are countries where scams, scam operations are successful and government officials are bribed to support and you turn a blind eye or even support construction for scam centers. So that part is going to be tricky, but no financial embargoes have been enforced for other reasons or other types of embargoes. So it's definitely possible to do action on ah an international level.
00:40:03
Speaker
especially with the size of this you know this transnational crime that is in the billions, if not trillions of dollars ah flowing out of a large number of countries and into others. So definitely need to collaborate in tech action on an international level here. But it's a great point. like It's become so lucrative that it's now involving human trafficking.
00:40:27
Speaker
So, you know, we've seen the media releases recently, including the UN, about the amount of scam compounds that are opening up in Southeast Asia in particular, involving human trafficking and torture. So this has gone to a completely whole new level. It is so profitable. Transnational organized crime has resorted to human trafficking to fund and to resource these scam compounds.
00:40:53
Speaker
But this it's at a whole new level now. It's horrific. And this is in addition to the the the victim harm, which is horrific enough. It's in addition to the impact it's having to our local economies. We now have human trafficking. And it's not just Southeast Asia. I think a lot of the cartels in Mexico are shifting from drugs to scams or adding scams to their ah well there were ah arsenal of crimes. that they But it's it's much safer. You don't need to transport anything. you don't need to get people in scam centers and there's also forced labor so there in South America and in obviously in um in Africa. I definitely think that from a monetary perspective, from an impact perspective, this is a this is a tragedy that we have not uncovered yet in terms of both monetary impact on a national level, international level, as well as emotional level. At the end of the day, there are people at the end of these scams that are losing their life savings.
00:41:51
Speaker
and they feel shame and that is a whole other part of trauma that we need to to take into consideration. I did want to ask is that if if that is an aspect that's also discussed in these conversations, I know you're really kind of focused on catching and forcing, preventing, is there also an angle of the human side in these conversations?
00:42:16
Speaker
I think it's at the forefront of everything. And that's what's so important about the National Anti-Scam Center. But when they set up with their advisory board, they open it up with a victim story. And that's also what GASA does very well. They open it up with a victim story. So you bring it back. So when you're sitting there as a crime fighter or as an anti-fraud specialist, it's bringing it down to why you're actually there and seeing the impact. But it's also got to the point though, that I think everyone has seen a fraud or scam impact someone that they know, because there's a scam for everyone. And we're also seeing, you know, ah unfortunately, with the sextortion scams on juveniles, suicides. And that's why, and that's what we're there. And that's why we're there to stop this. And we've got to do it. And we all have a moral responsibility. And we all have a corporate responsibility to do it. And that's at the forefront of it. And that's the mantra in Australia. It's about protecting consumers first.
00:43:16
Speaker
Couldn't agree more. So maybe I'll wrap with one last question. So what is your biggest insight or aha moment along the way in in your journey to fight scams? Each country, I believe for their response strategies, it needs to be government led. Government led to bring the ecosystems together to stop the blame game and promote real action and where needed enforce and mandate real action. And every player in the scam lifecycle needs to do their part because one part alone will not be effective. And that's the biggest aha moment. And from that, once we identify that domestically, this is a global problem that needs a global solution. Working with government, we need to find a way where we can now target this globally together.
00:44:12
Speaker
Because we know in Australia, if we be effective here and we close down those vulnerabilities, it will cause a displacement effect and they'll go to another English speaking country or but where those vulnerabilities are. So we also need to share. We need to work at this globally and across all sectors and share those best practices. Thank you so much.
00:44:33
Speaker
for joining me today and for sharing ah your insights and learnings along the way. I think we have a lot a lot to learn from Australia and know you you show you're showing results so there's nothing more powerful than really to see results of that work. Congratulations on everything and again thank you for being taking time and joining me today on on the podcast. Thank you and thanks for all the great work you do and all the good awareness you do and sharing these insights across industry as well. You're doing amazing stuff.