Fraud News Update 02.02.17 – This week’s edition features: Predicting Fraud (barometer), Technology (an IP cesspool), Predicting Ponzi Schemes (popularity), Card Fraud (gibberish), Telematics, A Boom for Insurance Carriers (and fraudsters too!) and Highlights (from last week’s social media feed).
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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Wouldn’t it be great if there was a way to determine if companies are committing fraud? According to researchers, from Rutgers, Arizona State and Columbia’s business school, they think they’ve found a material clue.
While this may not apply to all situations where fraud’s being committed, it’s certainly an interesting study with insights on the correlation between the incentives corporations offer when committing fraud and the number of whistleblower incidents.
Emerging Tech: An Industrial Espionage Cesspool
Some unscrupulous governments and individuals are always interested in stealing someone elses cutting edge technology. Their motto: If you can’t develop it yourself…just appropriate (steal) it!
And the interesting part here is that the vertical doesn’t seem to matter. I’ve talked to plenty of people whose attitude is “we don’t have anything that anyone wants.”That sentiment couldn’t be farther from the truth.
The unfortunate reality? Someone, somewhere, is always interested in your company’s technology, trade secrets or intellectual property. One doesn’t have to look any farther than the cellular phone industry to see how valuable IP’s become.
What’s at stake? It’s a competitive, “dog eat dog world.” The company who gets to market first often wins while the loser might just be hangin the “out of business” sign on their door!
Popularity Brings Ponzi
Enterprising bad actor’s are always trying to capitalize on popular events.
There currently isn’t a more popular Broadway show than Hamilton, one of the hottest theatrical properties to come around in a long, long time.
There are a lot of reasons why people commit Ponzi schemes but greed is certainly one of them and these charges not only reflect greed but the attempt to profit from an artistic production.
As “Mr. Cub,” Ernie Banks used to say about the game of baseball “let’s play two!” And that’s exactly what the government’s alleging here, a ticket selling scam AND a Ponzi scheme doubleheader.
Card Fraud Gibberish
So, chip and pin was being touted by quite a few uninformed individuals around the country as the tool that was singlehandedly going to be the financial services industry’s saving grace and eliminate credit card fraud!
What?! Uh, no.
Like most fraud deterrent techniques, they work really well for one thing and often not for another. In this case, chip and pin targets in person-point of sale (POS), transactional frauds which is not the same thing as “saying it will reduce all credit card fraud.”
Because the reality is, that when one fraud prevention mechanism’s put in place, the bad actors simply migrate to other forms of fraud unaffected by the technological attempts to thwart their nefarious activity. In this case, the migrations to online fraud where people aren’t required to stand in front of a POS terminal, more commonly referred to as card not present (CNP) fraud.
And, that’s exactly the story here. While traditional, in person, forms of credit card fraud are showing a dip, CNP fraud stats are soaring. Chip and pin protects against ALL credit card fraud? Hardly!
Telematics – A Boom For Insurance
The hot business theme these days is: “disruption.”
Simply put, “disruption” involves thinking about things differently, challenging ourselves to find new ways to dissect and improve upon old tasks. It’s a “disturbance in the force,” idea re-engineering or as Walt Disney might have said in the 50’s, “re-imagineering.”
Disruption is everywhere now, currently influencing established industry verticals that have been doing the same things in the same ways (repeatable processes) for a long, long, long period of time. And there aren’t many verticals that are more established, and set in their ways, than insurance companies.
While old school techniques have worked exceptionally well for centuries, the new age reality is that IOT, IIOT, technology, big data analytics and telematics are changing the face of the insurance industry. Some insurance companies now find themselves in an interesting predicament, move rapidly and change with the technology times or watch your competitors sail by into a sea of increased profitability and customer satisfaction.
The times, and the technology, they are a changin…
Highlights From Last Week’s Social Media Feed:
- Signs of Insurance Fraud
- Robots – Changing Insurance
- Insurance Ethics
- Data Breach Reporting- Reputational Damage
- Cybercrime & Homeowners Insurance Coverage
For more information on how we can help your business prevent enterprise fraud risk, conduct fraud risk assessments, provide fraud training, ensure regulatory compliance, reduce major fraud losses and improve operational ROI and bottom line profitability, contact us to schedule an initial consultation. No obligations…just unique insights from an industry leader.