An Ex-Fraudster's Guide to Staying Safe | "What The Fraud?" Podcast

THOMAS TARANIUK: There's something you need to know about fraud in 2025. It's not just getting worse, it's getting smarter. The criminals are more professional, the attacks are more precise, and here's what keeps me awake at night. Somewhere right now, there's a fraudster studying your business. Hello and welcome to What The Fraud?, a podcast by Sumsub, where digital fraudsters meet their match.

I'm Thomas Taraniuk, currently responsible for some of our very exciting partnerships here at Sumsub, a global verification platform helping businesses to verify users, companies and transactions as well. Today, we're exploring fraud trends and 2026 predictions through the lens of our identity fraud report, the ultimate source of truth for understanding what's really happening. Where is fraud coming from? Who's the most at risk, and what new threats are on the horizon?

Joining me is Alex Wood, counterfraud expert, international keynote speaker, part of the BBC Radio Four's Scam Secrets team, and in a former life, a prolific fraudster. Alex has spent 20 years conning victims out of millions before turning his life around, and now he's on our side of the fight. Alex, welcome to What The Fraud?

ALEX WOOD: Thank you so much, Tom. Great to be with you.

From scamming millions to becoming a leading voice in fraud prevention

THOMAS TARANIUK: Alex, your story is well-known in the fraud world, but for listeners who don't know it yet, could you take us back, please? How did you go from scamming millions to being on our side and becoming one of the leading voices in fraud prevention?

ALEX WOOD: It's quite an unusual story, but we all think of frauds as being utterly remorseless. But my turning point came in court when I heard the devastation that I'd visited upon one of my victims who had lost, I think, 1.3 million pounds in a very complex APP fraud that lasted about 40 minutes and left them totally bewildered as to what had happened. But this company director described in court that he'd become very ill as a result of what I'd done. He lost so much money from his business, but he was eventually refunded 1.3 million pounds after six months of litigation, and he didn't have the working capital during that time. But he also described how if the phone rang, he would become panicked. He lost trust in people, and his relationships suffered. And I'd caused this absolute devastation. And for me, that was the realization, actually, that fraud is not a victimless crime. We always hear fraudsters describe fraud as victimless. It's only fraudsters that say this, by the way. They think that they're hitting the banks, the banks can afford it, and everyone hates the banks. However, it was actually in that moment that I realized it has a profound personal and human impact. It's not just the banks that are being hit.

THOMAS TARANIUK: That's certainly the case. And you see these in the Hollywood movies, right? They go to the bank and they say, it's not your money. It's the bank's money. Don't worry about it. Nobody gets hurt.

ALEX WOOD: The Robin Hood mentality. People have this Robin Hood approach that they're robbing off the rich bankers taking huge bonuses and distributing it amongst criminals.

THOMAS TARANIUK: You made millions through some of these schemes, right. And it looks like you turned the table and you turned your life around. And you went to prison as I understood, Alex?

ALEX WOOD: Three times. Yeah, you're right. So I went to prison. First offense was for three years, and then the second was for three and a half, and then seven in the end for the last one, seven years inside.

THOMAS TARANIUK: More generally, I mean, this was one of the scams that you talked about here, but you were undeterred from the first prison sentence and you went back into similar, let's say, focus points.

Prison is a breeding ground for fraud

ALEX WOOD: Absolutely. I mean, prison for fraud is a breeding ground. It's a hothouse. It's a university of further offending. Fraudsters are siloed off. They're all put on a low-risk wing. They're lumped together because they're not trying to stab other prisoners or smoke drugs or attack officers, and they're largely forgotten about. Inevitably, frauds will talk about their love of money, their assets, the watches, the cars, and the things they used to own, and form future conspiracies.

I remember having these conversations of, you know, how did you get caught? And I said, well, I screwed up on the money laundering. And they're like, well, you should speak to this guy. And then there'd be someone else who's a money launderer, and he'd say, you know, we need somebody with a very good English voice who can arrange payments, arrange fraud against companies because we have the bank accounts that can carry those transactions. And so it really was a place to share ideas. It had absolutely no deterrent effect on me whatsoever.

THOMAS TARANIUK: Super interesting to hear that point of view as well. And I mean, after 20 years of this, you've come out on top, you are now helping banks, police, regulatory bodies, and more to better protect themselves. Right. Could you tell us a little bit more about that, please, Alex?

ALEX WOOD: As you've said at the start, I'm part of the BBC Scam Secrets team. I advise law enforcement, banks, risk providers, and companies like Sumsub. And the value I add is being able to bring a sort of insider perspective. We always hear, don't we, in our organizations, try and think like a fraudster? I try and think like a criminal, and I think I'm here to tell everybody that you really cannot do that unless you've done it. And I think when I give a lot of speeches all over the world, people come up to me afterwards and say, actually, yeah, you're right. We can't think like a fraudster.

Suggested read: Psychology of a Fraudster: "What The Fraud?" Podcast

I talk about the psychopathy spectrum. I talk about religious ideology that fuels a lot of financial crime, sort of deep-seated hatred of Western banks and Western businesses, which is one of the reasons why Hawala is so popular. It is because there's a deep-seated distrust of Western banks. And so I bring this insight to institutions, and also the UK government, on the topic of Hawala, ISIS, and the Home Office. And the small boat crossings are all paid for through the Hawala network. And for quite some time, the government was unclear as to why people were paying five or six thousand pounds to cross the channel, only to turn up here with absolutely nothing, not a single penny. And so, how have they managed to do that? And of course, it's the Hawala trust-based and sort of cashless transfer system that they use. So I help to deliver insight into that as well.

THOMAS TARANIUK: Alex, super looking forward to diving very much deeper into these topics of discussion today as well. As you well know, our Identity Fraud Report shows something very striking. Fraud attempts are dropping, but success rates are indeed climbing as well. We're calling it the sophistication shift, quality over quantity, fewer attacks, but at the same time more damaging as well. Are you seeing the same thing on your side, Alex?

Sophistication shift in fraud

ALEX WOOD: Absolutely. And that's why I think Sumsub is spot on in this regard. A lot of this is attributable to AI. AI is making it very easy for a fraudster to save 90% of the time they would spend researching a potential victim or crafting the perfect script for a fraud, and focus their time on delivery and targeting for maximum loss to the victim. And so I think that's why we are seeing fewer attempts because AI is making it more targeted and easier to perpetrate, but then higher success, higher sophistication on the backend. It's a sad statistic in many ways that we are seeing fewer attempts, and we think, great, fraudsters are taking the foot off the gas. But actually, they're just having far fewer failed attempts because they're targeting with very accurate knowledge and insider data.

THOMAS TARANIUK: Absolutely, and I mean, depending on the location as well, at the end of the day, fraud happens all over the world. Some of the outcomes of said fraud might differ as well. Alex, you've worked globally, right? You've spoken across Latin America, the United States, the UK, and West Africa. What sort of patterns, Alex, are you seeing across these different regions and are fraudsters targeting, as I put it earlier, these different regions in let's say very diversified ways?

Regional fraud patterns

ALEX WOOD: Yeah, it's really interesting how we're seeing fraud proliferating. So the first thing I've seen in recent years is that because the UK is getting more sophisticated at detection, and banks are getting very good at transaction monitoring and so forth, fraudsters are then like, okay, well, so we've got this great skill set, we've got a great team, we've got AI and so on, but the banks are getting good at it. So what are we gonna do now? And they said, Right, well, we're gonna hit other English-speaking nations. We're gonna hit Canada, we're gonna hit Australia, we're gonna hit New Zealand. So then we've seen it tailing off slightly in the UK and then really spiking in these other English-speaking jurisdictions.

Only the very bravest criminals are hitting the US because the sentences there: I mean, they will deport you, they'll grab you wherever you are in the world, and take you back and give you an enormous sentence. I was speaking to a US prosecutor a little while ago, and he said, for the APP fraud that I committed, which was valued by the police at 26 million pounds, I pleaded guilty for just under two, and they accepted that because it was very complex to prosecute. The prosecutor in the US said that if I'd done that in the US, I'd have probably got about 150 years. So sentences like Bernie Madoff, Allen Stanford, and so on. People are very reticent about hitting the US. They're largely safer than Canada, New Zealand, Australia, and so on. But we're seeing a global proliferation of English-speaking bad actors. We're also seeing more and more use of the female voice, and that can be attributed to deepfakes.

THOMAS TARANIUK: Is that because it's more trusting, Alex?

ALEX WOOD: It is. Absolutely. You're spot on.

We're seeing an increase in the use of the female voice, which can be attributed to deepfakes. There has been a lot of psychological research into why this is. But we trust our mothers. We love our mothers. We trust the female voice. Fraud is always associated with the male voice.

We have an idea of the fraudster's voice that might phone us up, and it could be from places like Pakistan, or West Africa. We have these preconceptions. When an English woman calls somebody up, they're very, the guard is right down and they're very successful. And when we were recruiting callers, as we used to call them, into the organized crime network, we would pay a lot of money to get a well educated, well spoken English woman.

THOMAS TARANIUK: Okay. Super interesting. I guess, certainly with the US, I did understand that with these romance scams, right, that they have an international ability to extradite you and put you in handcuffs and ship you over to the US, and that's something you avoided. Several lifetimes versus a couple of years where you did your prison sentence, the smart answer would be to take the latter.

ALEX WOOD: And of course, with the latter, Tom, there is always the hope that you might be accidentally released, which seems to be a quite a popular thing these days, isn't it?

THOMAS TARANIUK: Well, only if you're friends with Trump, right? So we've looked at the US as a, let's say, target, the UK and other countries, but where is the epicenter of where this fraud or organized crime is starting? I mean, is it being fostered somewhere else in the world?

The epicenter of where fraud and organized crime start

ALEX WOOD: Very true. So absolutely, for high-value authorized push payment fraud, we are now seeing that the gangs are located in Dubai. But I know a lot of British gangs that are now based there because the risks of being caught in the UK are too high. We used to call it moving hot. If you are hot, if you're spending thousands of pounds in a nightclub and driving around in a Lamborghini and wearing a half a million pound watch in the UK, you're gonna be picked up on the radar. In Dubai, that's quite normal. So, the high-end APP stuff is going to Dubai.

The less good gangs, the less successful gangs are based in Thailand. So again, difficult to extradite from Thailand. And in particular, pig butchering. I mean, pig butchering of course originates from China. But we're seeing a lot of gangs based on the Thai-Myanmar border. So it's on the boundary there, on the Myanmar side. And we've heard in the news of people having their passports confiscated, being effectively kidnapped. And I don't quite appreciate that all of the people who say they've been kidnapped were, I'm sure, there are a lot of people who were quite willing to go there and earn some money.

Suggested read: Pig Butchering: Inside the Billion-Dollar Scam Factories

But there was a very interesting drop in these frauds at the start of the year. You may remember there was a major earthquake in Myanmar that affected Thailand very badly. And you see these pictures in the news of rooftop pools, all the water sloshing out over the side of the hotel. Really powerful earthquake caused a lot of devastation. In the weeks immediately following this earthquake, we saw a massive drop in this type of fraud, which we thought was coming from Myanmar. And I don't know if that's attributable to people in these call centers being killed or the communications lines all going down. But there was a definite link between that earthquake and a serious drop in this type of pig butchering. So yes, there is a real sort of geographical correlation with much of this, and to be honest, I think that's why the Report was so interesting for me is because you broke it down into these jurisdictions. You looked at very specific countries in your report, and what you really sort of picked up on seemed to make a lot of sense to me.

THOMAS TARANIUK: It's incredible hearing from you as well. The fact that people are, well, we don't know the exact numbers, but certainly people are trafficked, and people are pursuing it as a line of work. Right. You mentioned something before the podcast, which was that Myanmar's biggest export is fraud, right?

ALEX WOOD: Yes.

THOMAS TARANIUK: Which is an incredible statistic and it goes to show just how much APP, pig butchering and scam centers are sort of centralized in these locations. Are we doing enough to sort of stop this? We can't rely on earthquakes to do our job for us.

ALEX WOOD: No. I mean, it's so difficult to have cross-border collaboration. And again, that's why companies like yours are important, as they facilitate cross-border collaboration. I mean, we look, if we look at bribery, there are some multinational organizations that will straddle the UK, the US, and also countries where bribery and corruption are absolutely fine. And a bribe is seen as the cost of doing business, and how an organization can cope with that is always fascinating to me. I think there needs to be a lot more collaboration. I think collaboration, if we can have one sort of takeaway word from today, is so vital.

Even in the UK, if we see a fraud in progress, there are laws now that enable the sharing of data between banks if a fraud is actually live. But I remember back in 2017, when I was committing the APP fraud, I remember one major UK bank would contact another major UK bank and say, 'Right, we need, there's a fraud happening on this account. We need to know where the money's going. We need to know who the person is.' And they were like, 'Yeah, okay, we can rush it through, but it's gonna take 24 hours.' The money's all gone in one hour max. Like it's dissipated across the world. But there is no way of sharing data quicker, but it's not quick enough because the fraudster, I think everyone appreciates, is one step ahead. And it takes the industry some time to catch up because, firstly, you have to work out what on earth they're doing and what the traits are, and then figure out how to stop it. But by then, they've got the headstart.

THOMAS TARANIUK: We always say fraud is constantly evolving and it is. And we mentioned earlier, we need to think like a fraudster. It might be a funny connotation, but at the end of the day, we do have these conversations with yourself and the likes just to get into the shoes and the mind of how ,we treat this like it is a business. Like there is something that we need to solve as a fraudster to get access to other people's funds, distribute them, and do it very fast before the authorities find out. There are multiple victims here. The people being forced to do it, of course, and the victims themselves dealing with the emotional as well as the fiscal damage.

Another key trend to our report is artificial intelligence, AI—a buzzword in many cases. We do talk about it a lot, how it's actually industrializing fraud, how it's democratizing the access of everyday people and these groups to use these tools for, well, for worse. What we know about AI is that it's changed the fraud landscape forever, and we're using it to try to, and it'll continue to do so. Fraudsters are using it to their advantage, and we're using it to try to beat them as well. So here's the question for you, Alex. How different would your career be as a fraudster if you had access to these tools back then?

How different would a fraudster’s career have been in the 2010s if they had AI back then?

ALEX WOOD: Well, I mean, I'd be immensely more prolific, but I don't think I'd have got caught.

THOMAS TARANIUK: You think you would've gotten away with it?

ALEX WOOD: I think so. When I was apprehended, the police put me in, I was remanded in Pentonville prison. Oh, terrible place. But the point is that they remanded me because there was a lot of money outstanding. There was a lot of money missing. They couldn't risk giving me bail because they'd recovered my phone, my devices and downloaded them and they found evidence of using helicopters and private jets and so on. So I was a flight risk. But the problem was proving it because we were destroying our phones and our laptops every week. So we would only ever risk being caught for that week's work as we used to call it.

But the silver bullet in my prosecution and the reason I had to eventually plead guilty is that the police recovered from a victim, a corporate victim that had call recording on their phones, you know, for training and quality purposes, as they call it, and also, of course, fraud detection. But they provided this recording of me phoning this victim to the police. The police used that recording as a control sample and compared the voice to—they got like a voice DNA expert—and they compared the voice to recording of me from Pentonville talking on the prison phone to my mum, which the prison handed over to the police and the voice DNA expert said, well, yeah, it'd be one in 6 billion, I think, chance that it's not him. I mean, it's very unlikely it's not Mr Wood. And so faced with that evidence, I had to plead guilty.

If I was using AI, if I was using voice deepfakes, if I was slightly altering my voice pattern, slightly altering the hertz or the rate of, you know, the megahertz that you speak of, the rate of speech or the clicks in one's voice or even the gender, then I would not have had that silver bullet in the case.

Suggested read: What Are Deepfakes, and How Can You Spot Them?

And so all the evidence would've been entirely circumstantial: lavish lifestyle, where the police need to prove why you've got a lavish lifestyle. You might have a lavish lifestyle and spend lots of physical cash, but you have to prove beyond a reasonable doubt. So I'd have certainly gone to trial, had that silver bullet not existed. I don't think I'd have got caught.

I used to spend some time researching victims. I could now do all that with ChatGPT. I could perfect the best fraud script using something like ChatGPT, Gemini, or Grok. And you might think to yourself, well, no, you can't, Alex: ChatGPT will refuse to do that if you prompt it to come up with the script for the perfect fraud. It's how you ask it, of course, isn't it? And if you ask ChatGPT, 'How do I commit the perfect crime?' It will; the ethical guardrails will refuse to assist. But if you say, I'm worried about being attacked by sophisticated fraudsters, what are they likely to say to me? What do I need to look out for? Then, of course, you get told everything that you want. So it's all about how the question is couched, but I'd come up with the perfect script. I'd research victims, I'd change my voice. So I think the fraud would be discharged in the same way, but my time would be slashed in research and prep. So instead of defrauding one victim of a million pounds in a day, I could probably do 10. I could, I think, tenfold more efficient with a massively reduced risk of apprehension.

THOMAS TARANIUK: Alex, you've given this a lot of thought.

ALEX WOOD: I'm sorry, I don't wanna scare everybody.

THOMAS TARANIUK: You're not coming back to the fraud network, I hope. When we're looking at it, it sounds like you can do everything. You can utilize it as a tool for the research, for the scripting, for the targeting, and then you can do that on a mass scale. So you're not only doing that with your own time, but with others, with bots, et cetera, to target multiple companies and to do it in a much more sophisticated way. And I think you are perfectly explaining what we're seeing now as a pattern.

And if we strip all of the AI and the artificial intelligence away for a second, the emotional manipulation, the psychological pressure, the human vulnerabilities, which one of those tactics, let's say, is timeless? Even if we had AI back then, it's still something that would work now, which one would, work regardless of technology?

Putting AI aside, what fraud tactics are timeless?

ALEX WOOD: For me, social engineering is the timeless mechanism by which fraudsters will guarantee success if you are a master manipulator of people's minds, emotions, hearts. And if you can blend that with AI, I think, well it's potentially devastating.

Fraud, in my view, never really changes. There's, I mean, certainly in UK law that there are two ingredients of a fraud. You have the false representation, which is effectively the lies, and then you have an illegal gain or a loss for the victim or risk of loss. A fraud doesn't have to be successful to be classified as a fraud.

So those ingredients, so the lies and the loss, effectively the two Ls are always going to be there. The only thing that ever changes is how the lies are deployed, and with AI and, you know, we are moving ever, I think, to a quantum world. And so, eventually, with quantum, the lies will be deployed in very sophisticated and advanced ways, and we're already seeing that happening. We are seeing tech, for example, on the dark web, which can change one's gender. It can change one's face on a dating app. And you think you're talking to you Tom, but actually the person could be talking to me and I've cloned your voice and your face and it's gonna become so much more successful.

THOMAS TARANIUK: At the end of the day when all of these are working and it's just Snapchats or whatever within these romance scams, and you're moving to videos where they can actually communicate with you in real time, it's quite terrifying.

ALEX WOOD: It is absolutely terrifying. The ramp of improvement of AI LLMs always staggers me. They're on a constant ramp of evolution, a constant uphill ramp of betterment. And if we look at AI a year ago or two years ago, there're these funny videos you see on Instagram or LinkedIn looking back two years ago at AI where people have too many fingers or they're eating spaghetti and the spaghetti's going on. That's all been cleared up now, hasn't it? And it's all cleared up so quickly. And if you look at something like Grok now and you think, well, where's that gonna be in a year or two years' time? It's gonna be immediate. It is gonna be glitchless, because it's constantly learning, and it's learning a lot quicker than we can. So, I don't think we can rely on human endeavor now to overcome this. We need to rely on humans educating tech and AI in the right way. And I think you've also identified that in your report.

THOMAS TARANIUK: Yes, I certainly have. And also, I think something that I've always thought about is the factor of who's liable as well. I mean, at the end of the day, if you're using AI to defraud people and you can get away with it, no one can point the finger at you because you can say, Look, this is all technology, which is doing a lot of these tasks.

Alex, our reports actually show that within iGaming it's been hit the hardest by fraud, specifically unlicensed black market gaming. It's unregulated, it targets vulnerable, often underage groups, like young people, crypto gaming. You recently conducted an investigation in that exact area. What did you think, Alex?

Fraud in iGaming

ALEX WOOD: I conducted an investigation for one of the largest gaming companies in the world and looked at different jurisdictions, so Europe, the UK, Ireland, and so on. And found an absolutely rife black marketplace. The government recently, if you saw the budget recently, with Rachel Reeves announcing a massive hike in taxing licensed, properly licensed and compliant gaming companies, up to 40% of their revenue. However, we have a thriving black marketplace where people can access these casinos and online slots platforms, which may be licensed in Curaçao, Anjouan Island, or Costa Rica. Not by the UK Gaming Commission, where they look like they're genuine providers, but actually they're being run by criminals, and it's impossible really for the normal punter to distinguish between what might be an illegal platform because it will say it's licensed and it is licensed. It's licensed in Curaçao, which is, you know, completely meaningless.

THOMAS TARANIUK: The team from Wise talked about this when they were on the podcast recently. The more that you are aware, the better that you can protect yourself, the more that you know what to look out for. And from your perspective, I mean, what should people look out for? What are the warning signs that individuals should say, okay, this is a red flag. Should I stop in my tracks?

Red flags of fraud people should look out for

ALEX WOOD: Yeah, sure. No, I mean, the first thing is to address the earlier point that you made is people should never feel stigmatized. And there's a lot of debate about whether the word scam should continue to be used at all because scam conjures up ideas of—and I shouldn't really be saying this because I front a show called Scam Secrets—but a scam conjures up the idea that somebody's fallen for something or fallen for a trick or fallen for a sort of sharp con. But actually, the idea that somebody has fallen for it—no, that's not what we should be focusing on. They've been ruthlessly targeted, exploited, and defrauded by very clever and ruthless criminals. Similarly, if someone has their bag snatched in the street or gets punched in the face, they might want to report it to the police. They won't feel any stigma about that. I think we need to have a broader discussion about how we describe victims of fraud.

I remember this. Did you see this lady in France who was defrauded, thinking she was dating Brad Pitt?

THOMAS TARANIUK: Oh, yes, I did.

ALEX WOOD: And she came in for some really horrendous abuse and people laughing at her online and saying, you stupid woman. How did you fall for this? And, okay, the AI-generated images might not have been what we'd expect to see now. But she fell for it. She did. And she was a victim. She was defrauded. She didn't make any mistakes. She entered it in good faith and should have really been protected better by the various social media platforms that facilitated the engagement. So that's the first thing is we can't possibly think of victims as being stupid.

THOMAS TARANIUK: That shame does put others in a very tough position. At the end of the day, if they are in that position where they see other people being ridiculed for being defrauded, they won't, well, there'll be a stigma against them actually going and reporting the fraud that they've been the victim of to the police. And when we have underreporting, then we have victims not coming forward. We have criminal gangs not being held responsible. And it does help build police intelligence. It does help build pattern recognition and ultimately stop the next attack from affecting the next victim. I mean, we need to kill this shame. And I see that you're on the same page with me, Alex, around being a victim. These are master criminals, as you mentioned, that we're dealing with. And through education, through working together, through the podcast and all of the work that you are doing with the government, the regulators, and through your BBC Four podcast as well, you're fighting the right fight.

So Alex, at the end of the day, if anyone is listening to this, and we've just gone through all of the details around coming forward as a victim, what are the red flags that they should be looking out for?

ALEX WOOD: Well, there's quite a few, and I think there are some commonalities which need to be sought out. I think if there's ever an unexpected or in any way unusual request for a payment to be made specifically urgently. So it could be somebody at work who gets an email coming in saying, oh, our bank details have changed. Here are the new details. Can you pay this today? Right. Step back. Think about what you're reading. If you get a text from your mum or your dad or your kids saying, I'm stuck and I need some money. Again, it is an urgent request for payment you weren't expecting to make. So I think that's very important to recognize.

On the scam secrets, the main presenter, a lady called Sharry Vale, she has a saying, never trust anybody ever. Of course, that's quite regrettable when it comes to relationships, but it is the day and age that we're in. We have to apply what I think the cyber community referred to as zero trust principles. Just trust nothing and investigate it from that starting point and see if you can trust it, but have the default position that you can't trust it.

And there are some great sort of not for profit organizations, completely independent charitable organizations which have some services which are of use. The 159 service is very good. So all the UK banks have subscribed to that. If you think the bank is calling you or if you receive a phone call and they say they're from the bank, then you can call 159 from any phone. So hang up, call 159. The banks won't mind if you hang up on them because they want you to be safe. Call 159. And that service can trust, you can trust them to connect you with your bank. So you name the bank you're with, and they'll put you through to the fraud team independently. So that's not for profit called Stop Scams UK I think it's called. And they're very worthy bunch of people. And they come up with this very clever service. Not many people really know about it, but I think they released a stat a couple of months ago that they've, I think they've received their first million phone calls and I think well over 90% of those calls were instances where they hadn't been contacted by the bank and so they've disrupted potentially 900,000 frauds just by advertising that number.

I think also the point you made, Tom, about reporting is very crucial. There's a huge problem in the UK with underreporting, so as you know, fraud accounts for well over 40% of all reported crime, between 41 and 44% all reported crime. But the NCA, the National Crime Agency, reckons that 83% of fraud is never reported. So 17% of fraud is reported, and that accounts for 40% of all reported crime. So it's a pandemic that we are dealing with. And as you said about building up intelligence pictures is very important. Even if somebody's defrauded of 10 or 20 pounds, to report that because it could be somebody that's doing this to thousands of people.

THOMAS TARANIUK: Reporting fraud matters. It helps to build police intelligence, spots patterns, and of course ultimately stop the fraud in its tracks. And we need to kill the shame around being a victim of fraud. These are master criminals we're dealing with. And there is hope at the end of the day for these individuals, and if they do report, there's hope for others to not fall victim again, through education, through working together, through understanding how fraud actually works, through spotting, of course, the red flags and knowing how to report, we can fight back. The work Alex is doing with the companies, with the regulators is where the real battle actually happens.

How regulators tackle fraud

Alex, I want to understand a little bit more about the work that you do with regulatory bodies, not only in the UK but around the world. I mean, you shaped the Economic Crime and Corporate Transparency Act in 2023 advising the government while it was still in the bill phase. Now you are working with the Home Office on the Disclosure and Fraud Defences review, the Jonathan Fisher inquiry. Can you walk us through, Alex, what you're doing on these?

ALEX WOOD: Yeah. So, with the Economic Crime Corporate Transparency Act, specifically the failure to prevent legislation, the advice was really about the criminal mind and how, so it is a very interesting background to this act. If you remember the John Varley prosecution, who's the CEO of Barclays, and it related to alleged bribes between Barclays and the Qataris, so that they could avoid a government bailout during the financial crash. John Varley was prosecuted, along with his CFO, for fraud, specifically in relation to the payments made to secure funding for Barclays. And the trial collapsed because John and the CFO were acquitted, that, actually, because there was no legal basis to conclude that John and the CFO were the controlling minds of Barclays. And the judge ruled actually the board of a global bank is the controlling mind, and it can't be pinned on one or two people. And so they were acquitted, but then the Serious Fraud Office said to the government, Right, hang on, this is totally unacceptable. We believe very strongly that these people have done some very dodgy stuff, but because they're working for a big company, we can't pin it on the company or them.

And so they decided there was a need for new legislation. And so the new failure to prevent fraud offense is very wide in its scope. It doesn't just correlate to controlling minds or board members. It can be any subsidiary, it can be any employee of a company. It could be any sort of area manager who can be caught by this act. And so it's very important to have a proper understanding. I'm sure you see companies all the time that have never heard of the legislation and don't actually realize that they could go to prison for committing fraud, or by failing to provide documentation, or false accounting. And they just assume it's the CEO that's on the hook for this. But actually no. It could be anybody, really, in the company.

Suggested read: Breaking News, Explained: UK’s ‘Failure to Prevent Fraud’ Law Takes Effect

THOMAS TARANIUK: Well, certainly they are collaborating in a very intuitive way. Right? I mean, how important is collaboration on our side when fraud is underway? Regulators talking to businesses, businesses talking to police, and also banks sharing data with the public reporting, of course, on all of the fraud that they're the victim of or they have seen or will see, probably in the future. I mean, does it all need to connect together if you want to solve the problem or get anywhere near solving it?

ALEX WOOD: Collaboration is essential. I look back to one of the frauds that I committed, which was all over the news, and I'm sure lots of your listeners would've heard of this at the time, but which one was that? So this was the fake Duke offenses. So I spent about six or seven months in Central London living in five-star hotels, like the Ritz, The Chester's, Claridge's. I can name these companies because they were in the news.

THOMAS TARANIUK: Which was your favorite, Alex?

ALEX WOOD: Claridge's is a pretty nice place to go. I basically lived in all these places for seven months, swapping and changing every few weeks, and managed to get away with it for so long. I was never checking in with a card. The hotels believed that a member of the aristocracy was coming, that they thought I was the Duke of Marlborough, and would never challenge me for a card because you don't talk to aristocrats about something as common as money, right? All the bills had to get sent back to Blenheim Palace after checkout and all this sort of thing.

So when I look back at that fraud, the reason that I got away with it for so long is that there was no collaboration. So if you think about it, Claridge's for example, if they get defrauded of 50,000 quid, they're not really interested in warning the Ritz, for example, or warning the Savoy who are competitors. I'm sure people in Claridge's would be perfectly happy if the Ritz or the Savoy then got defrauded in the same way because they're up against each other all the time. So I was benefiting from that, from that inertia to share data between hotel chains.

And the only reason I was ever caught for that after several, I mean, it seems like a phenomenally long time to stay in hotels and not pay, not swipe a card, but it was because they were independently reporting to the police. And the police put a team together to bring all the sort of strands together and work out what was going on. But had the hotels been sharing data and had, as soon as the Savoy got hit for 50,000 quid, if they'd flagged that on some sort of collective monitoring system, then it would've only lasted a few weeks, I think, instead of seven months.

THOMAS TARANIUK: Super interesting. That's a big blind spot, especially on the collaboration side. I mean, if we had to look to the future, what would you imagine our blind spots could be, where, let's say, we are missing something in the fight against fraud?

Next big thing in the fight against fraud

ALEX WOOD: I think we're missing certainly around ID sharing around synthetic or cloned ID. We need to be a lot quicker to share through major risk platforms details of unusual transaction, not just in the UK but globally because the faster payment system, the SWIFT network has made the world very, very small and money can shoot across the world in seconds. So live sharing of data, which can then be quickly analyzed by risk companies and banks is essential.

And of course a lot of that has to be automated. So that in itself is a blind spot because we need the right people to be programming, educating these LLMs, for example, with the right data, with, you know, if you put garbage in, you get garbage out. So you need to be educating these LLMs correctly in order to then detect and collaborate. So although we think right, it's all down to the computers, actually the human involvement and the sort of personal touch I call it, is critical here.

THOMAS TARANIUK: Well, the human in the loop is something that we always talk about. If we look to the future, Alex, we talked about AI, which is a big problem for all, let's say, general businesses when being defrauded, individuals, et cetera, but also a weapon that we can use, a double-edged sword. What would you say is the next thing in the arms race for the fight against fraud?

New emerging threats

ALEX WOOD: Obviously AI, I think also we need to consider quantum, so quantum computing. There's already reports of successful quantum attacks originating from China. So I'm aware of a military grade encryption that has been hacked, allegedly hacked by a Chinese quantum system. This is the sort of encryption that would take a normal supercomputer weeks or months or, but potentially never, but certainly a long time to get round. But there is now a quantum arms race and of course, we're also concerned about quantum AI, so we have to be fighting back very quickly.

A quantum computer is a phenomenally expensive thing to develop. So we are reliant, of course, on the largest companies in the world and the largest economies in the world to help us to understand it and develop it. But if we think of a military grade encryption, how much more complex that is than normal banking encryption, and this can be unraveled and decrypted in minutes by a quantum machine. I think that is the next major threat vector. And it's years away. It's probably five to ten years away. I don't know, have a maybe a 20 quid bet with you, Tom, and we'll revisit.

THOMAS TARANIUK: Let's do it. Okay, good. You're on.

ALEX WOOD: I'm saying long five. So if you are under five, we'll have a bet.

THOMAS TARANIUK: I'm saying five. You're saying 10. We'll do it. I mean, at the end of the day as well, we are seeing all of this exciting technology, which is being taken and weaponized against us. And I think you're completely right. When we're looking at quantum computing, when we're looking at AI, and we're looking at the powers that be, governments, institutions, regulators, they do need to keep a tight lid on a lot of these things and not let it get into the hands of bad actors.

But Alex, it's been an absolute pleasure having you on the podcast. To close things out, we always like to get to know our guests like yourself a little bit more and have a little bit of fun with five quick fire questions. 

Quick-fire round

ALEX WOOD: Okay, cool. I wasn't briefed on this, but let's go.

THOMAS TARANIUK: You weren't Alex. Let's go. Question number one. If you could ban one risky behavior online, what would it be?

ALEX WOOD: Australia has just banned TikTok for under 16s. I think stuff like that—access to social media for children needs to be reviewed. I'm thinking around, you know, mule accounts, but obviously that's probably the least risky element of children accessing platforms like that, but I think it does need to be reigned in a bit.

THOMAS TARANIUK: Certainly the case. Question two, have you ever been a victim of fraud yourself?

ALEX WOOD: Yes, I have. And I'm ashamed to say. And I emailed the guy that did it after he did it, and I said, Well done, well done. You've got me. And I'm not gonna report it to the police. But I said, Well done, mate. So I went on eBay to buy a hot tub at the time. And I saw this incredible offer on this hot tub, and it was like this hot tub for like 400 quid, and it should have been like six grand or something. And I looked at it over and over again. I was thinking, that's incredible. Maybe it's a distressed sale. And I bought it and then the blooming thing arrived. It was this tiny little box with six cup holders in it. You know the thing that goes on the side of the hot tub, you put your cup in. And then I scrolled right through it, and at the very bottom of the advert I went back on it and it said, yeah, this is for cup holders that will fit this hot tub. But the picture was the hot tub, the whole, you know, describe the hot tub anyway.

THOMAS TARANIUK: Oh man, I'm so sorry. You win some, you lose some, right?

ALEX WOOD: Yeah. I mean, I told him, well done. It has never happened before or since.

THOMAS TARANIUK: Excellent to hear. What's one thing about fraud prevention that the public completely underestimates?

ALEX WOOD: They completely underestimate the sophistication, the intelligence and the determination of the bad actor. Totally underestimated. We have an idea of a fraudster, right? We think of a kid in his mum's basement, in his hoodie, or we think of a guy in a, you know, a Yahoo boy in a West African boiler room. And we don't think that the risk could be homegrown. We don't think somebody could go to university and be well-educated and go to the dark side in that way. We totally underestimate it.

THOMAS TARANIUK: Well, you're back on our side now, but this takes us or segments us quite nicely into the next question. I mean, what would Alex now in Barcelona on the podcast say to fraudster Alex back then?

ALEX WOOD: We're coming for you!

THOMAS TARANIUK: Excellent. That’s it! If you could have any other career other than the one that you're currently in, what would it be? And you can't say fraudster again. You've done that.

ALEX WOOD: Professional tennis player. I love tennis. I'm slightly rotund now, but I used to be pretty nifty around the court. I should probably get back on the court, but I love, I love tennis, and yeah, it's a real passion of mine.

THOMAS TARANIUK: Well, we're talking about the change in evolution of fraud, and we should be talking about the change in evolution of tennis to padel. Smaller courts and...

ALEX WOOD: Oh, padel. Ah, have you played padel tennis? It sort of annoys me a little bit.

THOMAS TARANIUK: We have it at Sumsub. We're doing a padel tournament.

ALEX WOOD: Are you?

THOMAS TARANIUK: Yeah.

ALEX WOOD: If you need a doubles partner, let me know.

THOMAS TARANIUK: I've already got a partner, but you can certainly come.

ALEX WOOD: I'll come and watch.

THOMAS TARANIUK: Excellent. Alex, thank you so much for joining us on this episode of What The Fraud. I've had an amazing time getting to know you, getting to understand exactly what you're doing in the fight against financial crime and what we can do together in the future to stop it. 

ALEX WOOD: Thank you.

THOMAS TARANIUK: If you've enjoyed today's chat with Alex, make sure to hit follow wherever you get your podcast, and if you can leave us a review, we'd love to hear your thoughts. It also helps people find the show and learn how to avoid the latest scams. 

That's a wrap on season four, so huge thanks to everyone who's tuned in, shared the show and joined us on this journey through the wild world of fraud prevention. We'll be back with more expert insights and stories soon. 

Remember, if you want to hear more about what we do here at Sumsub and how your business can actually benefit from our verification services, definitely check out our website at www.sumsub.com and subscribe to our socials. Stay safe and we'll see you next season.