Ex-Fraudster – Alexander Hall on The Gaps in Fraud Fighting

Ex-Fraudster – Alexander Hall on The Gaps in Fraud Fighting

Alexander Hall was involved in the Las Vegas criminal underbelly until he decided to turn his life around. Here’s what he learned.

In today’s episode of the SEON Cat and Mouse Show, we speak with Alexander Hall, a former fraudster who turned consultant with his company Dispute Defence Consulting.

After the catalyst of the birth of his first child, Alexander was forced to step in line and stop his fraudulent activities. He now helps the good guys identify gaps in their line of defence.

Below are five key takeaways from the interview, which you should listen to in full by clicking the player link above.

#1 Drugs As a Gateway to Fraud

Unlike many other fraudsters who stumbled upon that world online, Alexander became entangled in it through other illicit activities.

“So it was a lot of drugs, a lot of alcohol and a lot of that stuff going on. Well, here in Vegas at least, the lines between criminal fraud and drugs are practically interwoven. You can’t find a separation. So that’s how I first stepped foot into the realm of fraud is other people introducing me to these different licks that would help, you know, get high, that would help bring some product into our grasp. So that was the first step into the fraud industry.”

As for the definition of “licks”, Alexander elaborates:

“So there are a few terms. Licks, huddles, come ups, cash out. There’s a lot of different terms that you use to describe doing something, whether it’s illegal or not, doing something to benefit you.”

#2 Not Interested in Fraud as a Service

One of the reasons Alexander was so successful at defrauding companies is that he never did it to brag. 

“So to a fraudster, the thing is, I didn’t care what the name of something was. I didn’t spend time behind the desk thinking, how can I describe this method that I’m employing when I rip off this insurance company or rip off this bank. What kind of a label can I put on that? Zero time goes to marketing. At least in my operation. I know plenty of people go online and market themselves for fraud as a service and all this stuff over there. I never did that.”

In fact, his operation was kept lean to avoid unwanted attention:

“Mine was completely isolated and was completely very, very, very, very tight. When I went to go develop something, it was, how can I get what I’m searching for? So I’d use any method. I’d use any combination of methods. I’d use any system that could get me to that end. So it’s just important to not get caught up in the terms and keep your eyes open for new potentials with methods out there.”

#3 From Petty Fraud to Crime Consultant 

Still, after a while, Alexander found his services became in high demand from other fraudsters:

“What would happen is, you’d have these low-level, street-level people going in and stealing information at different places, whether that’s breaking into a business and stealing some information or breaking into houses and stealing safes, whatever it may be. And then that information would get aggregated by these different networks and then they’d be like, “Hey Alec, how do we use this? What do we do?” And that’s when I would step in and say, well, what do you want?”

This is the point where his skill for getting value out of any kind of data became valuable – especially in the context of generating credit card numbers.

“You can’t just say, what can we do with the information? And I would squeeze value out of it, which is actually what helped give birth to math as a payment method with the generated numbers and stuff like this. People would come across numbers that were burnt from the dark web in these batch report lists and all these different ways. And they were always worthless. Well, when you know how to generate numbers, they come back to life essentially. Then you just have to figure out where you can use it and apply it appropriately.”

#4 Fraud Prevention Always Lags Behind

One thing Alexander noticed when he turned to the side of the good guys: the tools still had a lot to catch up on:

No fraud prevention platform is the end all be all for fraud prevention. They can't say that because fraud prevention is a wheel, right? Every vendor is a spoke in the wheel. - Alexander Hall Click To Tweet

“So you’ve got data trends. You got data point transaction analysis, chargeback processing, AML, you got this and this and this, all these different types of fraud prevention, but none of them is the full circle. None of them is the full wheel. And in between every spoke in the wheel, there are gaps.”

#5 Understanding the Value of Your Data

One key solution Alexander offers: companies should have a better understanding of their data:

“The most useful approach is to understand what information is in your system. Understand what it all means, right? There’s been a few companies that I’ve worked with, that didn’t understand the value of an AVS. They didn’t understand the idea of an IP velocity or the value of IP addresses, shipping addresses and how it could all be cross-referenced into each other.”

Shipping addresses are especially important obstacles in the way of fraudsters.

“So what I tell everybody is when you see these attempts come through that might turn into fraud, blacklist that shipping address. It’s more difficult for a fraudster to come up with a good shipping address than it is to come up with a new card or an email or a phone number. Any of these things can be got in a couple of seconds, it’s not a big deal. But cycling through thousands of shipping addresses is less likely. It’s still possible, but it’s less likely.”

Building a One-Stop-Shop Against Fraud?

We came away from our conversation with Alexander with a lot of great insights. One point resonated strongly with us at SEON, the fact that specialised fraud prevention systems leave too many gaps for fraudsters to slip through. It is something we could address in the future with our products or community building? We hope so, and we hope this episode will provide food for your thoughts on fraud-fighting too.

 

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Author avatar
Jimmy Fong
CCO

Jimmy is the CCO of SEON and brings his in-depth experience of fraud-fighting to assist fraud teams everywhere.


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