Aviva Zacks of Safety Detective had the opportunity to interview Colette Symanowitz, Director of Marketing, Digital, & Biz Dev for FraudCracker. She told her how her company is helping people report fraud anonymously and still receive their rewards.
Safety Detective: What was your journey to your current position in FraudCracker and what do you love about your work?
Colette Symanowitz: I’ve been in tech and marketing for a number of years. After completing my MBA in 2007, my aim was to move out of the medical industry. At that stage, social networks like Facebook were in their infancy, and I saw an opportunity to start a niche social network exclusively for MBA graduates and current MBA students from all business schools worldwide. This was the seed that led to MBAconnect.net. What I loved about the tech space was that there was a lot of freedom back then. You weren’t tied down by red tape and bureaucracy like in the medical industry, where there were layers upon layers of SOPs and regulations, and everything had to be approved. The tech industry was refreshingly different for me. What I loved most about it was the space for creativity, where you could come up with innovative new solutions to companies’ and individuals’ pressing problems.
We ran MBAconnect.net from South Africa and grew that into a global social network with members from all over the world, predominantly in third-world markets. After selling MBAconnect.net, I worked in the tech, finance, and education industries, and later joined FraudCracker.com in 2018.
SD: What does FraudCracker do to help companies stay safe from fraud?
CS: FraudCracker helps companies fight against fraud via our online interactive chat technology. This gives whistleblowers a completely anonymous, safe space where they can report and discuss fraud with company authority figures like the CFO, the CEO, the chief audit executive, or whoever the company nominates. The whistleblower can have a back-and-forth follow-up chat and upload evidence such as videos, pictures, voice notes, or documents, all while remaining completely anonymous.
SD: What verticals use your services?
CS: Different countries have different laws that mandate that listed companies have a whistleblowing tool in place to report fraud. For example, in the US, you’ve got the Sarbanes-Oxley Act. In South Africa, there is the Companies Act. So FraudCracker is an invaluable tool for listed companies not only to report fraud but also to stay compliant with legislation and corporate governance requirements.
SD: How does FraudCracker stay ahead of the competition?
CS: The typical competitors in our space are the fraud-reporting phone hotlines. They have been around for decades. Hotlines can work, but they come with a number of problems.
Even though the phone hotlines provide some degree of anonymity, employees have the perception that they aren’t anonymous. This is because calls are recorded, transcripts are taken, and their voices and phone numbers can be recognized. For example, the Truecaller app can identify your name from your mobile number. This is all in the back of people’s minds when they’re deciding whether or not to report fraud. They don’t think they’re anonymous and they’re afraid of being victimized. So, they don’t report. They rather keep quiet.
Another problem with phone hotlines is that it’s difficult to have a back-and-forth follow-up conversation with the whistleblower. Usually, hotlines have an anonymous option where the tipster doesn’t give any form of identification, but then you can’t have the back-and-forth follow-up discussion. So, the third-party managing the hotline can’t call them back to ask follow-up questions, and the client cannot investigate the case further.
Here’s how FraudCracker solves these problems: The whistleblower provides only a nickname, no other form of identification. You don’t see their photo or any other information about them, and you don’t have their phone number, so they are completely anonymous on FraudCracker. Yet, they can still have a back-and-forth online conversation with the company authority figures similar to WhatsApp. The authority figures can ask them questions—who, why, what, where, and how—in order to gather more information for the investigation and to determine if the case has merit.
Also, if the hotline uses a landline phone, you can’t upload evidence of fraud. On FraudCracker, however, the whistleblower can upload attachments like PDFs, doc files, videos, voice notes, or pictures.
Hotlines can also be expensive to run because they have to be manned 24/7 with call center staff. However, because FraudCracker is online, and doesn’t need a physical call center, it doesn’t need as many staff to run it. So, we can pass on these lower operating costs to our clients.
The other thing that you can do with FraudCracker, and that you cannot do with a hotline, is to reward a person anonymously for reporting with evidence. In the US, the Securities and Exchange Commission has had a lot of success by rewarding whistleblowers. The SEC gives big monetary rewards between 10% and 30% of the value of the fraud claim. For example, for a $100 million claim that leads to successful enforcement, the tipster can get up to $30 million. These huge rewards have led to a 16-fold rise in whistleblowing. With a hotline, if the tipster chooses the anonymous option, you have no way to give them a reward. However, with FraudCracker, we can do this, while still keeping the whistleblower completely anonymous.
Also, if a client company is present in many countries, and the same authority figures receive all fraud submissions from all countries, you can have one FraudCracker website worldwide. This means you pay a flat fee, regardless of the number of countries. Unlike a hotline, you won’t be charged per country.
These are just some of the things we can do with our FraudCracker technology which you cannot do with a whistleblowing phone hotline. These are some of the differentiators that enable us to stay ahead of the competition.
SD: Do you feel that fraud is the biggest threat to security?
CS: There are so many different security threats, and fraud is definitely one of the biggest. We focus on the fraud niche because that’s where we can add the most value and that’s our area of expertise. But other security threats can be just as damaging, like malware, ransomware, or identity theft. You need tech and interaction with people to combat a huge security threat like fraud, and you need ongoing work and non-complacency to stay ahead of increasingly clever perpetrators.