10.18.16 – This week’s edition of the Fraud News Update features: Drone Usage in Investigations (Yay or nay?!), Drone Privacy (Not over my backyard, you don’t), The Wells Fargo Ethics Debacle (LinkedIn article), Disaster Fraud (Criminals among the rubble), Jockey (Not the underwear folks) fraud and Phishing Not Fishing (Man in the Middle Scams).
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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Drone Investigation Usage Update
There’s been a lot of discussion about the potential uses for drones while conducting investigations in the field. Recently, I was at an insurance industry conference where several senior industry executives were participating in a round table discussion on industry trends.
The issue of drones being used in investigations was posed of the panel and interestingly their response was unanimous:
Executive # 1: “No Drones!”
Executive # 2: “No Drones!”
Executive # 3: “No Drones!”
While there have been some applications where drones are being adapted in the Property and Casualty (P&C) insurance industry (e.g. crop/property damage/catastrophe claims/emergency management etc.,) this is definitely not a “one size fits all” rule especially when there are people and privacy considerations involved. Carriers, in different lines of insurance, are definitely going to interpret this technology, and it’s usage, differently.
Certainly, one of the main reasons why many Life and Health (L&H) insurance companies are hesitant to adopt small, non commercial drone usage for insurance investigations, or approve their usage for 3rd party vendors providing investigative services, are the inherent privacy issues and expectations of their insured’s.
Speaking of drone privacy concerns, insurance carriers concerns over privacy issues appear completely understandable in light of the responses that citizens around the country have had when confronted with drones flying, or hovering over, their backyards.
There’s been a rash of drone vs. shotgun incidents and we recently covered this epidemic in the Fraud Solutions Blog. For more information on that story see Drone Privacy: Obliteration Incidents Rising.
In case you’re wondering about the outcome….drones have proven to be absolutely no match for flying steel pellets!
The Wells Fargo Ethics Debacle
Obviously, Wells Fargo is all over the news… for all the wrong reasons.
Fraud Solutions took a different approach to this story, comparing initial fraud losses with the long terms effects of fraud which are often overlooked.
While the sanctions and penalties first imposed made headlines, our article focuses on the issues and costs which logically occur over time. Inevitably, the long term effects of a major fraud event dwarf the initial losses. A fact which is often overlooked by those covering the financial services industry.
For more information on our take on the long-term effects of fraud, see The “F” Word: Initial Losses Aren’t Usually the Killer! The piece was originally published on LinkedIn.
We were reminded last week of the sheer force that hurricanes are capable of when Hurricane Matthew absolutely throttled the Caribbean and then pummeled the southeastern U.S. coast heavily.
The death and destruction will have aid and charity organizations across the globe out in force collecting donations for those affected by the storm.
While charity starts at home, and we should all help as we’re able, it’s an excellent time to remember that every time a natural disaster of this magnitude happens, con artists come out of the woodwork to solicit funds and take advantage of our generosity and good nature.
I’ve written about disaster fraud on several occasions and here are some thoughts from an insurance focused piece I wrote in 2010:
The world has had its fair share of disasters (natural and terrorism related) over the last ten years. As a fraud professional with extensive insurance experience, I am aware there is a direct connection between disasters and fraud. In fact, every time one occurs, we see more fraud committed against insurance policies, programs and funds established to assist victims. This has me pondering key fraud prevention measures that should be ramped up to prevent criminals from taking advantage of the system, the funds and the people who need the assistance the most. While legitimate victims need the money in short order, the fast track method (pay now – question later) used to facilitate getting people the financial support they desperately need is undoubtedly also one of the core elements criminals count on to commit fraud after a disaster occurs.
Jockey (Not the Underwear Folks) Fraud
Perhaps the Horses Are Tired of Getting Whipped…
In a story from abroad, which just goes to show that fraud affects everyone, and every industry, comes this news about professional jockeys in the UK getting their bank accounts cleaned out by fraudsters.
It seems as if there are no shortage of intriguing characters in this case… including the horses (perhaps going to the whip down the stretch is actually a bad idea), disgruntled stewards, other jockeys who’ve been interfered with and every gambler who’s ever lost a race they wagered on.
Sounds like police have their work cut out for them when they “round-up the usual suspects” (Casablanca, 1942). Might be a good time to wear old shoes and watch your step when conducting interviews!
Phishing Not Fishing
Lastly, while looking at the story about British jockeys getting their bank accounts cleaned out, I happened upon this piece on the Telegraph News which reminded me that global phishing efforts is alive and well. The slick part about this scam is that the bad actors are simply sending out notices informing customers that they need to contact their financial institutions. Nothing wrong about that at all… except for the fact that the call back number provided to the customers isn’t actually the legitimate number for their bank.
A new form of fraud in which the public are sent letters, texts or emails asking them to phone their banks. There is no request for passwords or other personal information, so many recipients may phone the number provided. When your call is answered, a recording device is switched on. Your call is then transferred to a legitimate phone line operated by your bank, where you log in as usual by providing key letters of your password and other information. All of this is recorded, allowing the fraudster to build up information which could be used in future to access your accounts. “The reason why this scam is so successful is because the fraudster’s presence is unknown to both the victim and the bank.” Customers should only ever use phone numbers displayed on banks’ websites or on statements, it said. If you are responding to a message or letter, you should tell the bank member of staff at the outset of the call, it advised.
This is generally referred to as “a man in the middle” scam and the way for consumers to prevent it is disregard the call back telephone provided and look up the financial services customer service number on your own. The same theory also applies to calls from individuals representing themselves as government employees. If you call back the number they give you, and it’s a scam, you’ll always just get the fraudster. Do some homework, disregard numbers provided and call the number you find on your own for that entity or agency.
Fraud News – The Bottom Line
Fraud – empowering people to break the law. It’s a way of life for some and every fraud has a story. At Fraud Solutions,we’re passionate about helping customer’s mitigate enterprise fraud risk management losses. Being proactive is key, so, follow us each week as we cover the fraud beat with added insights, information and unique commentary on stories making the fraud news.
Those are our insights. What are yours?
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