Cash App Accused of Enabling Fraud: Fact or Fiction? w/ Frank McKenna

Fraudology is presented by Sardine.

Frank McKenna, the expert behind the popular "Frank on Fraud" blog and Chief Fraud Strategist at PointPredictive stops by to discuss a recent report published by Hindenberg research (A short-selling company intent on exposing fraud for corporate gains) that caused quite a few conversations & headlines within the online fraud world last week.

While the report brings up some concerning allegations, Karisse & Frank dissect some of the claims to demonstrate that when it comes to casting blame for online fraud, it's not always black & white. Being accused of enabling fake accounts is nothing new in the tech world, especially when user numbers are often the biggest contributor to a company's valuation. But, where's the line between being "under attack" and "enabling fraud"?

Cash App's meteoric rise was due to a rapid series of events including the ripple effects of Covid on the underbanked, massive amounts of fraud being stolen from government assistance programs, and the ease & use of Fintech technology vs. traditional banks. Did they ignore any regulations or simply not do what a group of people without fraud knowledge think they should have done? They also talk about how the type of platform Cash App may enable fraud by other companies' standards, but are they fraudulent to Cash App?

What becomes clear in this case is that there may not be a clear "right" or "wrong"; and that more than one thing can be true at once. It can be true that a lot of fraud was caught & prevented (which would only be known internally), but it can also be true that there is always more that can be done to reduce the impact of fraud on an online business, from fake accounts to payment fraud to money laundering.

It's also important to remember what every fraud-fighter with experience on "the frontlines" understands. That the battles they "fight" are not only coming from outside their company, but often they are "fighting" battles waged with them internally at the same time. And unlike the fight with cybercriminals, it often requires compromise between the altruistic ideals of the fraud/risk/Trust & Safety team and the demands/goals of the business.

Ultimately, neither Frank nor Karisse can make an absolute decision of what should have or could have been/should be done based solely on this report. There just isn't enough data to form an opinion one way or another. But, the topics they discuss & examples they share from a few anonymous fraud-fighters' experiences throughout this episode are timely, and may just prepare you for an upcoming battle you're not aware of yet.

Fraudology is hosted by Karisse Hendrick, a fraud fighter with decades of experience advising hundreds of the biggest ecommerce companies in the world on fraud, chargebacks, and other forms of abuse impacting a company's bottom line.

Connect with her on LinkedIn

She brings her experience, expertise, and extensive network of experts to this podcast semi weekly, on Tuesdays and Thursdays.

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