It seems that nary a week goes by without headlines illuminating a major breach at a retailer, government agency, or other organization. From credit card theft to unlawful access to personal information, fraud is all around us.
While Kount’s focus is providing crucial technology for online merchants, payment processors, and other card-not-present businesses to decrease fraud, we are well aware that fraud extends far beyond payments. Across the world, people and organizations are targets of fraud every day. Let’s take a look some of the recent news around fraud, and what they have in common.
- Voter Fraud: As the polarizing US presidential election gets smaller in our rear view mirror, it’s hard to forget the claims from both parties about voter fraud or “rigging” the election. Each candidate accused the other of everything from not counting votes, to illegal aliens or even the deceased casting votes on the other’s behalf.
- Voter fraud is conducted in the same way payment or account takeover fraud is committed, by masking who the voter/buyer really is and/or using false information to vote/make a purchase.
- Misappropriation of Funds: Sadly enough, there are criminals out there who will raise funds in the name of a specific business or venture, only to use those funds elsewhere. One recent incident included the producer of such Hollywood hits as Accidental Love and Father of Invention, David Bergstein, who defrauded investors in his new venture, Western Capital Management, of more than $26 million. Funds were transferred between investors, essentially borrowing from Peter to pay Paul, and also went to funding a lavish lifestyle for Bergstein and his partner.
- Fraudsters often move money from one payment or financial tool to another. For example, using stolen credit/debit card information to purchase gift cards, then selling them for a discount to turn them into cash. Often referred to as “money laundering,” moving from one payment instrument to another to another is a common practice among cyber thieves.
- Insurance Fraud: An age-old method of defrauding insurers or the government, insurance fraud most regularly occurs when an individual erroneously claims damage or, in the case of medical insurance, falsifies an illness, overinflates the cost of service or prescription drug, etc. Given the often-contentious relationship between insurance providers and doctors, the news has recently been filled with instances of doctors actually defrauding insurers, attempting to collect payment for services that were never rendered.
- Fraudsters often create a new account, be it an insurance policy, a bank account, a credit card, etc., using false or stolen information. This is commonly conducted to create new ways of stealing funds through otherwise legitimate means.
Unfortunately, these instances are just the tip of the iceberg, but what do they have in common? And why do people continue to attempt fraud and, more importantly, get away with it? Regardless of industry, we often see the very people that are tasked with spotting fraud have little or no experience in identifying or stopping it. Fraud moves rapidly, changes as fast as the weather and can be extremely difficult to recognize. Regardless of how, when or why, criminals will continue to steal from or deceive others for financial gain. Understanding the symptoms and warning signs of fraud is crucial to protecting businesses and consumers alike.
Having trouble finding the fraud risks in your operation? Let us conduct a fraud audit and show you where you have exposure to fraud loss and how to prevent it.