Scam Solutions: Fighting Fraud from within the Banking Industry
Steve Lenderman shares expertise about financial crimes, fraud, and how we can more effectively use data to identify and prevent scams.
Episode 41: Erin West and financial-crime expert Steve Lenderman explore the evolution of fraud tactics and the role of technology in addressing them. They go into detail about how fraud has affected industries such as banking, telecommunications, and social media. And they discuss the impact of AI and data on fraud detection as well as the need for a holistic approach to better understand and prevent fraud.
(Bonus: He explains how he demonstrated how easy it is to scam people by getting a room full of fraud professionals to go to a phishing website.)
I can move money effortlessly through synthetic identities. If law enforcement goes to track them down, they’re digital ghosts. And so the money disappears pretty quickly. —Steve Lenderman
He details fraud strategies that started emerging in the early 2000s, including creating synthetic identities to facilitate fraud without real people involved. How they use the “bust-out” technique to repeatedly exploit credit limits.
He defines the “fraud triangle” of opportunity, pressure, and rationalization. He explains how rationalization fraud has transitioned from “greed to need to feed.” Some people commit fraud out of simple greed, stealing to get more. Others rationalize their actions as “need,” committing fraud to get more of what they want or think they should have. But in our current economic climate, more people are turning to fraud to feed their families.
Who cares if I lie a little bit about an accident and get extra work covered? I’ve been paying my credit-card interest forever. They owe me. This is the rationalization. — Steve Lenderman
Steve sees opportunities for banks to address scams with the same diligence as traditional fraud. Banks have many ways to use data to identify fraud patterns, but are less familiar with scam activity. AI can enhance fraud detection by analyzing behavioral patterns.
It's very hard to spend a million dollars on technology and resources to address a problem that they don’t yet perceive as a million-dollar problem. — Steve Lenderman
Who Is Steve Lenderman?
Steve Lenderman is a recognized leader in the financial crimes sector, bringing over 25 years of experience in fraud prevention, investigations, and strategic risk management. He currently serves as Head of Fraud Prevention at isolved, where he oversees enterprise-wide fraud management and prevention strategies.
Prior to joining isolved, Steve led Fraud Solutions for North America at Quantexa, applying advanced AI technologies to help clients tackle fraud, financial crime, and regulatory compliance. His career includes senior roles at Bank Mobile Technology, ADP, and PayPal Business Loans.
His deep expertise in synthetic identity fraud has made him a trusted voice in the industry. He co-chairs the Bust Out Synthetic Identity (BOSI) working group and frequently speaks at fraud conferences and law enforcement training events.
Episode Chapters
00:00 Introduction to the Fraud Ecosystem
01:48 Synthetic Identity Fraud and Bust Out Fraud
06:15 The Evolution of Fraud Tactics
08:51 First-Party Fraud: Greed, Need, and Feed
12:29 The Role of Pressure and Rationalization in Fraud
17:02 The Impact of AI and Technology on Fraud
19:34 Scams vs. Traditional Fraud
23:36 The Future of Fraud Prevention
27:56 Understanding Scams in the Financial Ecosystem
30:36 The Burden on Banks and Telecommunications
33:23 The Impact of Scams on Individuals and Communities
35:19 Creating Effective Fraud Programs in Banking
38:25 The Role of AI and Data in Combatting Scams
Useful Links
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Sponsors of Stolen
BioCatch prevents financial crime by recognizing patterns in human behavior, continuously collecting 3,000 anonymized data points – keystroke and mouse activity, touch screen behavior, physical device attributes, and more – as people interact with their digital banking platforms. With these inputs, BioCatch's models reveal patterns that distinguish the criminal from the legitimate.
Scamnetic is a leader in AI-powered scam detection and prevention, protecting individuals, businesses, and financial institutions from digital scams. With solutions like KnowScam and IDeveryone, Scamnetic delivers real-time scam insights, identity verification, and intervention. Restoring trust, reducing losses, and empowering organizations to safeguard customers in an increasingly complex digital world.
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