S9 E4: Trust is a Two-way Street

Oct 23, 2024

Nina Mohanty, Founder and CEO of Bloom Money, talks about first-party fraud and its rise, sparked by trends like the "infinite money glitch" on TikTok. She highlights how the surge in fintech usage during the pandemic led to increased disputes and fraud, often overlooked by many companies chasing growth. The conversation delves into balancing consumer protection and accountability, exploring the ethical dilemmas faced by the industry and the complexities that threaten trust in financial services. A must-listen for anyone interested in fintech ethics!

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ANECDOTE

Infinite Money Glitch

A TikTok trend involved exploiting a Chase ATM "glitch" to withdraw more money than available.
One couple withdrew $21,000, spent $17,000 within 48 hours, and now faces repayment.

INSIGHT

TikTok's Dangerous Virality

TikTok's virality and lack of vetting can spread misinformation about financial services.
This can lead to confusion, with people mistaking fraudulent behavior for quirky trends.

ANECDOTE

Rising Credit Card Disputes

A Wall Street Journal article highlighted the explosion of disputed credit card transactions.
Consumers disputed $11 billion in charges in 2023, up from $7.2 billion in 2019.

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In this special guest episode, Alex catches up with founder and CEO of Bloom Money, Nina Mohanty, about a pressing yet overlooked issue: first-party fraud.

They kick off by exploring the viral "infinite money glitch" trend on TikTok—yep, it’s first-party fraud, whether people know it, admit it, or not…and it’s on the rise.

During the pandemic, neobanks like Chime, PayPal, and Cash App saw explosive growth, but that came with an explosive surge in fraud and disputes, too. In their quest for top-line numbers, many overlooked rising first-party fraud, exploiting gaps like the ACH settlement window. While traditional banks clamped down on this behavior, fintechs allowed it to thrive.

This shift in consumer behavior poses major concerns. How do we balance protecting consumers while holding them accountable? What impact does this have on product development, customer communication, and overall trust in fintech?

What does it mean for the wider ecosystem when people are being encouraged to engage in first party fraud?

Tune in for a candid discussion on fraud and its broader implications for financial services.

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00:07:29 – Chase ATMs meet the infinite money “glitch” trend

00:20:01 – The explosion of disputed credit card transactions

00:35:31 – Authorized Push Payment (APP) fraud in the UK

00:45:23 – Who bears responsibility: financial services or consumers?

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Follow Nina:

LinkedIn: https://www.linkedin.com/in/ninamohanty/

Follow Alex:

YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos

LinkedIn: https://www.linkedin.com/in/alexhjohnson

Twitter: https://www.twitter.com/AlexH_Johnson