Friday's Final Word | week 24

Good morning, everyone! Sanction evasion is once again a pressing topic this week as G7 nations meet in Italy and police representatives are grappling with the global nature of organized crime at Interpol’s Tirana gathering. Join us to get the full update!

?? Organized crime goes global

?? ‘Frankenstein identities’ overflow the UK

?? Russia beats the West’s sanctions regime

?? Santander’s customers fail the bank

?? Deepfakes on the rise

?? Can Labour ‘wash’ the UK clean?

Organized crime going global as main topic during Interpol’s regional conference

The Albanian capital of Tirana has become an important spot for the fight against organized crime this week as more than 160 senior police representatives gathered at Interpol’s regional conference to discuss common challenges. The increasingly international nature of crime is the main theme of the gathering, pushing law enforcement agencies to realize that cooperation is needed more than ever to fight fraud rings effectively. The rise of generative AI is making transcontinental attacks even more complicated, enabling scam networks to operate at scale from faraway bases. In times like these, global organizations like Interpol are crucial for managing relationships between national authorities.

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Millions of ‘Frankenstein identities’ bred in the UK

The UK is home to nearly 3 million "Frankenstein" identities stitched together by fraudsters out of real and made-up personal details, according to researchers from LexisNexis, who warn of a potential multi-billion-pound hit to the economy that could amount to around ￡4.2 billion by 2027. These half-fake, half-real identities have been cultivated for years at ‘synthetic farms’ and ‘factories’ to build up the credit scores of new synthetic profiles on an industrial scale. This years-long ‘breeding’ process is necessary because, without a credit history, a synthetic ID has little value to a fraudster. However, once it has been furnished with a list of activities, fake profiles can easily blend in as trustworthy. By this time, the fraud threat is effectively invisible to firms' existing fraud defenses, and therefore credit applications can be made with ease.

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G7 leaders scrutinize sanctions as Russia's resilient economy spurs new strategies

As G7 leaders gather in Italy, the effectiveness of sanctions imposed on Russia is under tight scrutiny. In the two years since Russia unleashed its forces on Ukraine, Western nations have established an expansive sanctions regime, limiting everything from car parts to semiconductors entering the country, with the aim of crippling the Russian economy. Yet, despite these efforts, Russia’s economy has shown surprising resilience and is forecast to grow faster than most of the world’s advanced economies. Consequently, Western officials are considering targeting financial institutions in countries that have not imposed sanctions on Russia and are facilitating the supply of goods and services. Whether this new approach will be more effective remains to be seen, but the fact that the West does not control the entire world economy makes the prospects less promising.

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Santander grapples with scammed users who scammed prevention measures

How can users be protected from scams if they scam the prevention measures put in place for their own protection? This is the riddle Spanish financial institution Santander will have to solve as it learns about its own customers who have lied to circumvent the bank’s measures against fraudsters operating on Facebook Marketplace. The bank introduced a series of questions last year with the aim of blocking transfers if customers haven’t seen the items they were intent on purchasing. These measures were put in place after Santander customers reported nearly ￡6.5 million in losses. The method seemed successful initially, with thousands of blocked transfers to Facebook Marketplace, effectively fighting the scams that Facebook failed to curtail. However, customers would later change their answers to meet the transfer requirements, and then go on to report that they have been scammed. This story demonstrates that in the fight against online scams, fraudsters are not the only ones posing challenges.

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Deepfakes are spreading in scams and on social media ‘faster than expected’, experts warn

The introduction of ChatGPT, and with that Generative AI, to the public has immediately catapulted the world into a new reality where distinguishing between the fake and the real is increasingly complicated. A report by deepfake-monitoring company Sensity indicates that the threat is even more present as deepfakes are spreading on social media 'faster than expected.' Beyond friendly pranks, deepfakes have become a tool used by cybercriminals, hacktivists, and various fake news outlets. Politicians are the most prominent targets, making false announcements, but celebrities are often victims of deepfakes as well, appearing in misleading promotional content aimed at inducing fans to make dubious investments. In either case, in their current form, deepfakes make online trust non-existent, so there is growing pressure on the 'good guys' to quickly develop methods that can catch fake content.

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Labour goes big on fighting dirty money, promising to stir up the City if elected

The anti-corruption group Transparency International didn’t mince words when it described the UK as a “laundromat for suspicious money.” However, given that up to 40 percent of the world’s “dirty money” still flows through London, UK overseas territories, and dependencies, the critical nickname might not be far from reality. Seeing the UK’s tarnished reputation as a hub for illicit gains, the Labour Party is campaigning with bold ambitions to revamp this image, promising to close loopholes and put more guardrails in place. As over $100 billion is “washed” through the UK each year, plans like these might become more than necessary. However, it will be the upcoming elections that determine if they are put in place.

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