Fraud DAO Highlight: Interview with Thomas Frantz of Mercury

March 8, 2023
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Fraud DAO Highlight: Interview with Thomas Frantz of Mercury

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As one of the first Fintech Fraud DAO proponents, Thomas Frantz's enthusiasm towards this product in the early stages was highly encouraging, especially given his experience in credit risk management and fraud. 

Tom first engaged with our team while he was Senior Manager of Risk at Airbase and has been a continuing source of support after his move to Mercury, where he heads the Credit Card underwriting program. Before these roles, he spent several years at Gusto, growing from a Risk analyst to Head of Risk analytics.

To better understand Tom's position on the consortium and how he thinks about fraud, Unit21’s Product Manager, Dhiraj Bhat, conducted this interview.

Here, we’ll discuss:

  • Tom's unique experience with fraud and his point of view regarding fraud detection vs. prevention
  • The top challenges he believes are present in fraud 
  • How Mercury currently addresses fraud
  • How he believes the Fintech Fraud DAO is a secret weapon for shifting the mindset from reactive detection to proactive prevention and why he wants to join

Let’s dig in.

Thomas Frantz's Journey in the World of Fraud and Risk


"What has your industry journey been like in the world of risk and fraud?"


"I graduated college with a degree in Finance and always knew I liked numbers and patterns and analyzing them. I started interviewing at a small startup for a Risk Ops position without knowing in true depth what I was getting into.

Very quickly, the realization came that there were no automated processes, and everything was being done through spreadsheets. Over time, that role grew into building out the fraud mitigation process and system for Gusto, where I made the company aware of other types of losses, such as credit loss.

Just as before, that then turned into its own arm, and I led the credit Risk Ops from the ground up. Eventually, this led to my roles in risk management at Airbase and finally leading the card program at Mercury today." 


"How do you view fraud as an innovator, constantly pushing the boundaries of shifting from detection to prevention?

Is this a cost center, or can the fraud stack for a company make you an innovator?"


"I’ve had the pleasure of experiencing Risk Management from the ground floor at two companies. It’s pretty much always viewed as an afterthought.

Eventually, of course, it grows into significant scope - risk, risk ops, fraud, threat modeling, etc." 

How Risk Management Has Evolved


"In your opinion, how do you think risk management has evolved during the pandemic vs. before?"


"In my view, the pandemic was one of the very few things that positively impacted risk management in the longer run, certainly at Gusto.

Everyone moved to running payroll online, including your team at Unit21.

That being said, the same uptick quickly turned into a hotbed for fraud, which weirdly grew this side of the business to ensure we stayed on top - particularly on the Paycheck Protection Program [PPP] loan processing side." 


"Do you think being proactive about fraud actually can work? What are some ways you think this is possible and do you think we need to be proactive?"


"An integrated approach to risk within a company can make it easier for fraud and risk to become a well-oiled machine. A lot of times, these teams work in silos. The more org-wide exposure they have, the better the outcomes."


"What is a particular fraud area that is relevant to companies in your space? How is Mercury staying ahead of the curve on this?"


"Credit risk (my role) has typically been a function of the broader risk organization. Whereas at Mercury, it's a completely separate business vertical, separated from a ‘loss and expense’ type of Risk team.

Interesting fraud patterns we see are check fraud - despite it seeming super archaic, especially since we still do huge volumes there. Sometimes technology adoption is also limited by a fear of fraud, like the lack of remote check deposits in certain geographies.

At Airbase, the most fascinating type of fraud I saw was ‘Typo-squatting,’ essentially creating sponsored fake URLs that put their customers through a sign-in flow which essentially opened the floodgates. This quickly turned into a game of whack-a-mole for the risk team, which led to a wholesale reconfiguration of our authentication flow. 

Generative AI and Fraud


"How do you think Generative AI will play a role in Fraud -  for better and for worse?"


"It frightens me as it does you!

One of the things you see commonly in fraud (as a way for those in the know) is a typo or a set of typos in fraudulent messages or emails, especially since, a lot of the time, the fraudsters come from outside the US.

However, Generative AI changes the game here because they no longer have to compile this themselves.

Social engineering becomes easier, too - from maybe a customer service rep or company staff, because it’s very easy to learn the sort of language you need to use to obtain customers’ information.

With each iteration of these types of AI products, it's getting tougher and tougher to play the games of whack-a-mole, and point out what used to be obvious." 

Why Tom Joined the Fintech Fraud DAO


"Why are you interested in the Fraud DAO? What do you hope to accomplish through a product like this?"


"Consortium data makes everyone stronger.

I’ve had the pleasure of being in a fraud consortium while at Gusto called the 'Payroll Fraud Prevention Group' (a data initiative in the payroll industry).

Our PFPG signals sat alongside our typical Middesk, Dun & Bradstreet type data, which were embedded into our ‘company profile’ page in our admin systems.

It helped us weed out so many companies at onboarding before we started spending money onboarding them, running credit checks, and so on. Fintech as a whole obviously doesn't have any product that serves the purpose.

The signals get that much stronger with larger groups, and the potential really excites me from an industry perspective."

Concluding Thoughts

While the Fintech industry hasn't had access to something like Fraud DAO until now, there is a clear advantage to using consortium data to inform your fraud program.

If you want to discover how to get access to better data to fuel your fraud prevention program, please contact to learn more.

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