Financial services companies are often advised to create a “culture of regulatory compliance” without anyone really discussing what that means or how to do it.

The Federal Bureau of Investigation has developed its own culture of compliance within its ranks. In the book, The FBI Way, Frank Figliuzzi, the former chief inspector for internal inquiries at the Bureau describes how it does that.

​Getting everyone involved, particularly FBI leadership, is critical to success, he writes.

“I am convinced the FBI’s practice of mandatory leadership participation in both the [Office of Professional Responsibility] and inspection processes forges more knowledgeable and accountable leaders. Many companies unconsciously send the message to their employees that compliance and ethics is someone else’s job. Corporations often make audit staff assignments optional for executive trainees or fail to properly incentivize or reward such roles. When it comes to addressing allegations of misconduct, most companies allocate that responsibility solely to human resources or legal departments. Yet, how can you trust your leaders to comply with standards if you don't trust them to enforce those standards?”

Companies that want to make sure their own regulatory work goes beyond just checking box can apply the FBI model to their own organization. Executives and founders should ask themselves where regulatory compliance fits into their organization and how is it viewed by the rest of the company.

Is the compliance group viewed as the “no department” to be avoided as much as possible? Are regulatory questions viewed as “the lawyers’ problem” by leadership? Is the legal department viewed as a separate but equal part of the company?
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If the answers to these questions are ‘yes,’ then it might be time to reevaluate how the company approaches compliance questions. One way to fix the culture may be to have more employees spend some training time with the compliance department. Another is to get leadership more actively involved in compliance decisions. It does not mean that the CEO needs to approve every transaction exception, but letting leadership see the process from time to time will help everyone be ready for those times when things go awry. 

What is Clair? 

Clair is a New York-based mission driven digital banking platform that provides America’s workforce with fee-free access to their earnings when they want them via the Clair Debit Mastercard and FDIC-insured spending & savings accounts. Our on-demand pay product is embedded within the digital or physical punch clocks of our HR technology partners, where employees clock in and out of work everyday. By giving people access to their earnings when they need them, Clair is rewiring the way America’s workforce gets paid – in a manner that is instant, on-demand, and via direct deposit. 

What is your company’s role in the payments industry (program manager, issuer, processor, service provider, etc.)?

Clair, is an embedded fintech. We partner with Galileo, the API payment processor for world-leading fintech brands. Galileo’s best-in-class payment technologies enable Clair to keep doing what we do best — bringing frictionless, high-quality financial services to America’s workforce.

What kinds of payments & special features do you offer?

Our flagship product is fee-free Clair On-Demand Pay. We have an API connection with prominent human capital management companies that provide us with real-time pay/time data for our end-users. After clocking out of each shift, users are immediately able to access a portion of that shift's earnings, without paying a fee. In addition, Clair offers a suite of other banking tools, such as Clair Savings and Spending Accounts, a physical & virtual Clair Debit Mastercard, free ACH transfers and fee-free cash withdrawals at 40,000 in-network ATMs, and more. 

What kinds of companies are you looking to partner with?

Clair has formed partnerships with numerous HR technology and Time-and-Attendance providers across the country - making us instantly accessible to thousands of businesses and millions of hourly workers. We partner with workforce management firms, PEOs, as well as human capital management companies & payroll providers. Through these partnerships, businesses and employees instantly gain access to Clair as a free benefit. It’s a win-win-win. 
 
What do you think the future of payments holds in the next five years?

Instant, on-demand P2P payments are already table-stakes for consumers and soon these rising expectations will translate to the speed and flexibility of how employees want to receive their paychecks too. The two-week pay cycle hasn’t innovated in 100 years, and Clair has the potential to fundamentally rewire how American workers think about getting paid.  

The current wage cycle causes real pain. Senselessly, millions are pushed into financial instability over nothing so much as timing. With inflation, this is only getting worse. Money rightfully earned is trapped in limbo, acting as an interest-free loan for the employer at the expense of the employee. I’m excited for a future where instant payment access for all employees (both hourly & salaried) will become the rule rather than the exception. 

​On the morning of June 20th I received an email from “Brian T, President & CEO, Innovative Payments Association.” While this alone was not odd, in the email “Brian T” asked for my “cell phone number for an urgent task.” I thought this was a little strange considering Brian had my cell phone number. Also, what urgent task could Brian have for me at 8:30am on Juneteenth, a federal holiday? Perhaps naively, I responded to “Brian T” with my cell phone number. 

​Minutes later I received a text message from an unknown number pretending to be Brian Tate telling me he’s “rushing to a conference” (on a federal holiday?) and that he needed me to purchase $500 in Apple Store gift cards to provide to a client. I immediately recognized the request as fraudulent and cut off communications with the scammer. After examining the initial email further and calling the real Brian Tate to confirm the scam, I realized that “Brian T” was emailing me from a Gmail account, texted me from an out-of-state number that had no connection to Brian, and even misspelled Brian’s name, all red flags for potential scams. 

While the scam was obvious to me, the communication was convincing enough that I initially took the bait. The scammer had done his research, knew who Brian Tate was, and that I worked with him. The email appeared to come from him, and it was only after further inspection did I discover it had not. 
 
While I was fortunate enough to recognize the scam before it was too late, many are not. Email scams such as the one I was exposed to are on the rise, and everyone must use some basic tips to ensure they don’t become victims. According the FBI, below are some tips to protecting yourself online:
 

• Remember that companies generally don’t contact you to ask for your username or password.
• Don’t click on anything in an unsolicited email or text message. Look up the company’s phone number on your own (don’t use the one a potential scammer is providing), and call the company to ask if the request is legitimate.
• Carefully examine the email address, URL, and spelling used in any correspondence. Scammers use slight differences to trick your eye and gain your trust.
• Be careful what you download. Never open an email attachment from someone you don’t know and be wary of email attachments forwarded to you.
• Set up two-factor (or multi-factor) authentication on any account that allows it, and never disable it.
• Be careful with what information you share online or on social media. By openly sharing things like pet names, schools you attended, family members, and your birthday, you can give a scammer all the information they need to guess your password or answer your security questions.

 
With the proliferation of email scams over the last couple of years, everyone should follow the above tips to avoid being targeted by scammers, and if you are targeted as I was, be able to quickly recognize and mitigate any potential damage. 
 

​A recent survey by AARP found that 34 percent of Americans say they or someone they know has been targeted by criminals who try to trick them into paying a bogus debt with a gift card.

The survey of just over 2,000 American adults also found that 24 percent of the people surveyed bought gift cards in response to the request.

As we look to protect customers (and friends and family), it’s importance to recognize that these victims are falling prey to scams and not hacks. In other words, the most secure packaging and computer systems in the world cannot prevent someone from buying a gift card and then giving the numbers over the phone to criminals.

The survey also asked “[h]ow strongly do you agree or disagree that lawmakers need to do more to protect consumers from fraud and scams?” Not surprisingly 89 percent said they agreed with this statement. But laws already exist to prosecute criminals, and there are no laws Congress and state legislators can pass and implement that will totally prevent people from being tricked or misled.

Ultimately, we all need to be part of the solution to preventing these crimes. Laws and regulations are already in place to prosecute criminals, and law enforcement has developed tools like the FBI’s Internet Crime Complaint Center to improve reporting and investigations.

On the industry side, gift card issuers and distributors have built in fraud detection tools and created educational materials for shoppers. For instance, systems can spot unusual amounts of gift card loads or high numbers of activations. At that point they can prompt clerks to ask why the cards are being purchased, put a hold on the funds, or take other corrective action.

Of the people who reported that they bought gift cards as part of a scam, 25 percent said they were warned about the possibility of scams at the time of purchase. Clerks can only do this when the purchase seems unusual. Some criminals have gotten wise to this defense and warn their victims to purchase small amounts from multiple stores so that nothing tips off a clerk or store manager.

This brings us to the last lines of defense: education and social awareness. We need to educate git card buyers about the risks of scams. AARP did this in an article describing the most common types of scams, and industry groups like the IPA and Retail Gift Card Association have also provided information for consumers to avoid scams. The IPA also created an investigation for local law enforcement to make it easier for them to aid victims of card fraud of all types.  

Stores will often post warnings at their gift card malls that gift cards cannot be used for things like utility bill payments. Clerks have been trained to look for unusual purchases by customers.

Ultimately, we need to talk with our friends and family members about the proper uses of gift cards. Let them know they should call us first if someone ever tells them we are in jail or that they need to pay a bill and should buy a gift card. We need to make people comfortable about asking questions and not shame those who get tricked.

Gift cards have topped the holiday wish lists of consumers for the past 15 years, according to the National Retail Federation. They are popular because they bring recipients a lot of happiness and choice. By working together to protect the average American, law enforcement, industry, and friends and family can make sure gift cards remain a source of joy.