Posts Tagged ‘fraud’

The National Health Care Anti-Fraud Association (NHCAA) estimates that 3% of all healthcare spending – about $68 billion – is lost to fraud each year in the United States. The FBI / CDC estimate that figure could be as high as 10%, or $226 billion.

In the past, we’ve talked a great deal about the impact that fraud has on businesses and on consumers, including those affected by medical fraud. But we have yet to talk about the cost – the billions of dollars – this fraud is costing all of us in other ways.

Whether you have employer-sponsored health insurance or you purchase your own insurance policy, health care fraud inevitably translates into higher premiums and out-of-pocket expenses for consumers, as well as reduced benefits or coverage. For employers—private and government alike—health care fraud increases the cost of providing insurance benefits to employees and, in turn, increases the overall cost of doing business.

The NHCAA estimated in 2007 that $2.26 trillion was spent on health care and the 4 billion health insurance claims processed in the US. They conservatively estimated that $68 billion of this was lost to fraud, quite an astounding figure. The majority of health care fraud was found to be committed by a small number of dishonest health care providers submitting false claims to insurers and to public programs. Other types of provider-initiated fraud can be found here.

This abuse of claims can have damaging effects on patients who may find themselves victims of medical identity theft, with their insurance benefits affected by misuse. In addition to providers, organized criminal groups and individuals also perpetrate health care fraud. The report includes examples of crime rings that shifted from illegal drug trafficking to medical fraud schemes, resulting in millions of dollars in fraud.

If you want to learn more about health care fraud, read here.

Hat tip to I’ve been mugged ; Via dotmed ; Image: clipart

According to a new report from Gartner, 7.5% of Americans were victims of financial fraud in 2008. Data breaches were the main cause of the financial losses.

Gartner, in its survey of 5,000 adults, showed that 70% of respondents had never been a victim of identity theft / fraud. For those who have, the breakdown includes 14% of respondents who had their credit card data used, 7% had their debit card used, 6% had a new account opened in their name, 5% were the victims of money transfer fraud and 4% had checks forged.

Of those who had been victims of fraud, 19% cited a data breach as the cause. That is the highest figure cited, after which were wallet theft (16%) and online scams (13%). This data clearly shows that data breaches are leading to incidents of identity theft and fraud.

Victims of certain types of fraud are able to recover more easily than others. The cost of most credit card fraud, for example, is not borne by the consumer. However, the survey found that bank account fraud can damage credit rating, sometimes with damage that lasts for more than a year.

The survey indicates that less than one-third of victims reported these crimes to law enforcement and only 5% reported it to the Federal Trade Commission.

Via pogowasright, finextra, CNET ; Image: morguefile / penywise

A LoJack for Laptops equipped laptop began to call in to the Absolute Monitoring Center just days after its owner reported that it had been stolen in a home burglary. The Absolute Recovery Team deployed a series of forensic tools to mine information on the laptop’s unauthorized user and whereabouts, and uncovered several pieces of evidence that indicated the laptop was being used to perpetrate credit card fraud. Absolute passed these details over to the County Sheriff’s Forgery and Fraud Unit for further investigation.

The County Sheriff’s office was quick to act on the information that Absolute provided, and within a week, was able to obtain a search warrant for the identified user’s address. The warrant was served, and after detaining the location’s occupants, a thorough search was conducted.

Police recovered the stolen laptop from the scene, along with narcotics, stolen auto parts, handguns, a special machine that reads and re-encodes credit cards’ magnetic strips, and hundreds of documents which contained names, addresses, and social security and credit card numbers. The user was arrested and charged on several counts of Credit Card Fraud, ID Take-Over, Receiving Stolen Property and Narcotics Possession. Detectives estimate the amount of known fraud on the compromised credit cards to be in excess of $100,000.

The laptop has been returned to a happy LoJack for Laptops customer.

Learn more about the Absolute Theft Recovery process.

Please note that indictments and criminal complaints are merely unproven accusations and the accused, in all cases, are presumed innocent until proven guilty.

31Consumerist has published an insider report that gives a disturbing look into the data security threats present when call centers are outsourced.

The insider, a former Chase call center rep, tells the story of a thief able to repeatedly commit credit card fraud by calling an outsourced security department. All he needed to know was a name, Social Security number and a mother’s maiden name.

The Chase call center employee, who worked in the US, flagged the caller as a potential thief. He had called repeatedly trying to sleuth out all the security questions that come up when attempting to access an account. As a result, the Chase employee forwarded the call to security – which had been outsourced to the Philippines.

The US security department had access to LexisNexis to verify more personal information, while the Philippine security department did not. As a result, for weeks the thief would be bumped to security, only to be approved and cleared back to the call center to complete his transactions. Some employees knew enough of the situation to block the transaction, but enough “newbies” did not so that the account holder (the same one each time) was stripped of more than $40,000 over time.

Although the account was repeatedly locked, the thief was able to unlock it with these details over and over again. Why? Because the handbook that the call center went by, the how-to guide that was followed word-for-word, was not set up to deal with this scenario. Although the US security department flagged the account and put on blocks and notes, the outsourced security department would unblock the account. The fraud only ended when the thief was caught.

This is just one example of the issues that arise when security is outsourced. Cultural issues, such as the gender associated with a name, could also come into play. Security is not a cut and dry issue, so many clever thieves are taking advantage of black-and-white security manuals in the hands of outsourced security departments to commit fraud.

Here are some additional stories I was able to dig up on outsourced call centers:

• Security Karma – Outsourced Call Centers + Security = !Sleep
• Paid article – Outsourced or Outsmarted?
• Tech Republic – Outsourcing, good and bad.
• Dark Reading – Hacking the Call Center

Image: milica sekulic

The Federal Trade Commission (FTC) is warning victims of Hurricane Ike and Gustav, and donors to the recovery, to beware of identity theft scams.

The FTC works to prevent fraudulent, deceptive and unfair business practices, and to educate consumers about these practices. One such warning involves being extra cautious in the wake of current events, particularly those that pull at your heart strings. Many people will take advantage of natural disasters like Ike and Gustav to create bogus fund-raising operations.

The FTC advises consumers to give to charities that have been around for some time, as they are best prepared to delivery assistance, and to ensure (among other things) that you are donating to the charity you intended to. They recommend a checklist of things to do to prevent becoming a victim of fraud.

In addition to charity fraud, victims of Hurricane Ike and Gustav are cautioned against becoming victims of home repair fraud. They recommend taking the time to check the references of your contractors and to be responsible with your payment process. The FTC reminds consumers not to sign an insurance check over to a contractor.

In order to get relief benefits or replacement documents, victims of the hurricanes will need to share personal information. Be cautious of scams of people claiming to be government officials - check their IDs and know that the government never charges application fees.

Here are some resources from the FTC:

• FTC Charity Checklist – to ensure your donation dollars benefit the people and organizations you want to help
• FTC Hurricane Recovery Resources (Charity Fraud, Home Repair Fraud, Identity Protection)
• Hurricane Recovery Consumer Information – more information about a slew of scams to beware of

Via MarketWatch ; Image: NASA by Jesse Allen