Fraud News Update 01.27.17 – This week’s edition features: Ghost Billing Schemes (even the “pretty people” get ripped off!), Interpol Takes On Wildlife Traffickers (connection to financial crime and organized criminal enterprises), 2016 Dummies Hall of Fame (stupid insurance claims), Security and Fraud Risks Drives Decisioning (as it should be!), Payments Fraud and Payment Fraud (risks and controls) and Connected and Driverless Cars (= vulnerability!).
As leaders in the fraud consulting arena, read on for more topical information and our insights, observations and unique commentary on some of the weekly fraud news stories.
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Ghost Billing Schemes
It never ceases to amaze me how many companies continue to get financially clobbered for millions of dollars by a variety of ghost billing schemes. Ghost billing schemes are easily perpetrated against entities with lax account creation and AP controls.
Turns out, even the “pretty people” aren’t immune from these types of fraud shenanigans either as this story about a ghost billing scheme at HBO proves.
Apparently all the glitz, glamour and celebrity mingling wasn’t enough for one person. Oftentimes, living the high life means living beyond your means which is a telltale sign of fraudulent behavior.
There may be a movie in this. Coming soon to a theater near you: “Keeping up with the Joneses!” What “A Listers” will Hollywood get to play the parts?!
Taking On Wildlife Traffickers
We’ve written about wildlife trafficking as a growing economic issue and financial crime in at least one past issue of the Fraud News Update. So, it was interesting to me that wildlife trafficking is now on Interpol’s radar screen as a growing target area as well.
One of the reasons Interpol has to be interested is because of the relationship between primary crimes and secondary crimes which most organized criminal enterprises are involved in. Very seldom are OC rings ever just involved in one thing.
Likewise, in this case, there’s a significant relationship between wildlife trafficking and financial crimes, including the laundering of the proceeds, and diversion of money, from one criminal activity to another, which may even include terrorism.
Interpol knows this which is why they would want to be involved in what’s primarily an entity’s secondary crime like wildlife trafficking. While they may be following the “tusks” now, what they’re really doing is “following the economic crime money” as we’re fond of saying.
2016 Coverage for Dummies Hall of Fame
People do some seriously dumb stuff. Then, they submit some seriously stupid insurance claims which correspond directly to the seriously dumb stuff that they just did. Seriously!
Well, that said, here’s one look at some of the seriously stupid insurance claims people submitted in 2016 for their seriously stupid actions.
Word of advice: If you do something seriously stupid, you might want to keep it to yourself! Otherwise, submit an insurance claim and EVERYONE will know what a seriously stupid stunt you pulled.
Security and Fraud Risks Drive Decisioning
Some of the insights and commentary from one writer on Forrester’s recent report: The State of Retail Payments 2016.
Is your management organization, or fraud risk management team effectively adding to the solution or are they part of the problem?!
Payments Fraud vs. Payment Fraud
Quite a few companies focus their anti-fraud efforts on external threats, of which there are many, so this approach isn’t necessarily bad.
However, one simply cannot ignore the threats from within and payment fraud’s a real deal. Case in point, the piece on ghost fraud earlier in this issue.
While we’d all like to trust our employee’s implicitly, that’s clearly unrealistic in this day and age. Internal threats are often far more damaging than those done by external bad actors.
Regular identification and evaluation of risks and proper controls is key.
Connected Cars? Driverless Cars?
So, the automobile industry is going high-tech. Uber (hip) cool stuff and perhaps the wave of the future but nonetheless very scary indeed.
Not sure most folks are ready to hand over control of their steering wheel to…no one. And crashes involving driverless cars aren’t exactly helping.
In the recent Tesla (self driving car crash), the car manufacturer is saying that the car was operating as it was supposed to (despite the fact that it didn’t appear to have reduced speed, applied the brakes or detected the car in front). While diagnostics suggest that the driver, who was going 74 mph, had 7 seconds to take evasive action before impact but didn’t because the car was in self driving mode.
But consumer confidence (or lack thereof) is just one of the many issues involved in the connected/driverless car innovation going on these days.
Hacker/cyber issues are also pervasive in both areas as are insurance coverage and claims issues, which are challenging the insurance industry to keep pace. As is often the case, innovation drives legislation and that’s certainly the case here while all sides are trying to get up to speed.
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