True Crime Fighters with Guest Nanci McKenzie

Wrestling Payments Podcast: Season 4 - Episode 09

Episode Summary

In this episode of Wrestling Payments, host Joe Casali welcomes payments expert Nanci McKenzie of Capital One for an engaging conversation about one of the fastest-evolving threats facing financial institutions today: first-party fraud.

Drawing on years of experience in payments, fraud prevention, and anti-money laundering, Nanci explores how first-party fraud has expanded far beyond traditional "friendly fraud" disputes into a broad category of intentional financial deception. The discussion covers account opening fraud, bust-out schemes, romance scams, synthetic identities, and emerging healthcare fraud trends that are costing organizations billions of dollars.

Joe and Nanci examine why first-party fraud can be difficult to identify, how fraudsters exploit customer trust and financial institution processes, and why monitoring unusual changes in customer behavior may be more important than ever. Along the way, they discuss the growing role of fraud detection technology, the challenges of protecting consumers who refuse to believe they are being scammed, and the critical role financial institution employees play as frontline fraud fighters.

The episode provides both practical fraud awareness insights and a compelling reminder that successful fraud prevention requires constant vigilance, education, and adaptation.

Nanci will be speaking at NEACH's 2026 End-User Payments Fraud Symposium on September 22 & 23. Register Here.

Guest-at-a-Glance

💡 Name: Nanci McKenzie, MLS, JM, AAP, APRP, CAMS
💡 What she does: Payments Expert, Commercial Bank Treasury Management
💡 Company: Capital One
💡 Where to find her: Nanci McKenzie on LinkedIn

Key Insights

First-Party Fraud Is More Complex Than Many Realize

While first-party fraud was once associated primarily with credit card chargeback abuse and "friendly fraud," it now encompasses a wide range of intentional scams involving legitimate individuals exploiting financial institutions. From account opening schemes to bust-out fraud and fraudulent lending activity, the threat continues to evolve and often operates beneath the radar of traditional fraud monitoring systems.

Customer Behavior May Reveal More Than Transactions

Nanci emphasizes that one of the strongest indicators of fraud is sudden behavioral change. Unusual deposit activity, escalating transaction amounts, increased borrowing, or rapid movement of funds can all signal elevated risk. Financial institutions that focus only on transaction monitoring may miss important clues hidden within customer behavior patterns.

Romance Scams Continue to Challenge Financial Institutions

One of the most difficult aspects of fraud prevention is protecting customers who believe they are helping someone they trust. Even when financial institutions identify clear warning signs, scam victims may deny evidence and proceed with transactions. Education, communication, and intervention remain essential tools in combating these emotionally driven fraud schemes.

Technology Is Becoming Essential for Fraud Detection

Manual review processes alone are no longer sufficient for identifying today's fraud risks. Nanci discusses how artificial intelligence, behavioral monitoring, account validation tools, and transaction pattern analysis are becoming increasingly important for detecting suspicious activity and preventing financial losses.

Fraud Exists Far Beyond Traditional Banking Channels

One of the most surprising revelations discussed is the growing role of healthcare-related fraud. Large-scale schemes involving medical equipment claims, hospice services, and home healthcare billing demonstrate that first-party fraud extends well beyond consumer banking and can affect multiple sectors across the economy.

Episode Highlights

Understanding the Difference Between First-Party Fraud and Authorized Push Payment Fraud

00:01:30 – 00:04:50

Nanci explains why these two forms of fraud are often confused and outlines the important distinction between a fraudster intentionally committing deception and a legitimate customer being manipulated by a scammer.

"First-party fraud is you've got a legitimate person and they are intending to do something malicious."

The Evolution of Friendly Fraud

00:05:00 – 00:07:35

The conversation explores how first-party fraud has evolved from disputed credit card purchases and false merchandise returns into far more sophisticated schemes that directly impact financial institutions.

"People didn't think much of it... but we're seeing different first-party fraud really poke its ugly head lately."

What Is a Bust-Out Fraud?

00:08:00 – 00:10:45

Nanci describes how fraudsters build trust with a financial institution over time before maximizing available credit or loan proceeds and disappearing without repayment.

"Now I see my opportunity. I'm going to take that loan out for my maximum amount... and I disappear."

Why First-Party Fraud Often Goes Undetected

00:10:45 – 00:15:30

Many institutions focus heavily on external fraud threats while overlooking internal behavioral patterns that may indicate account opening fraud, abuse of credit products, or suspicious account activity.

"First-party fraud is probably one of those things that are running under the radar right now."

The Reality of Romance Scams

00:17:45 – 00:22:25

Nanci shares a powerful real-world example involving a victim who lost hundreds of thousands of dollars through multiple romance scams and explains why victims often resist intervention efforts.

"If they would have questioned me, I would have lied."

Healthcare Fraud: The Six-and-a-Half Billion Dollar Surprise

00:23:10 – 00:27:15

One of the episode's most eye-opening discussions centers on healthcare-related fraud schemes involving durable medical equipment, hospice care, and home healthcare services.

"There were discovered 455 individuals that were involved in healthcare scams that totaled six point five billion dollars."

How AI Is Helping Investigators Connect the Dots

00:28:15 – 00:29:45

The discussion turns to the growing role of artificial intelligence in identifying suspicious activity, organizing investigations, and helping regulators uncover large fraud networks.

"They're using AI... they can separate them out by using artificial intelligence."

Celebrating Financial Services' Unsung Crime Fighters

00:30:00 – 00:31:15

Nanci recognizes the operations professionals working behind the scenes in ACH, wire transfer, and fraud departments who serve as the financial industry's frontline defense against fraud.

"Our ACH operations people, wire transfer people, they are true crime fighters."

Staying Ahead of Ever-Changing Fraud Trends

00:33:45 – 00:34:55

The episode closes with Nanci's advice for financial institutions: remain curious, continually reassess fraud monitoring practices, stay informed about emerging threats, and never stop learning.

"Fraud trends are going to continue to keep changing. We need to stay aware of those changes."

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, YouTube, Spotify, or wherever you get your podcasts.