Fraud detection – from hard to made easy
The IRS has been in the news recently for allowing fraudulent returns using stolen or made up tax ID numbers. In the Inspector General’s report it states, “There is a potential that erroneous tax refunds are going to non-qualifying individuals, allowing them to defraud the federal government of billions of dollars.” In addition, once ID numbers are obtained fraudulently, they can be used for other scams.
Unfortunately, the IRS is not alone. According to the Payment Accuracy website, a handful of agencies each released $750 million or more in improper payments in 2010. These include payments to fraudulent applicants as well as incorrect payments to applicants abusing the system.
We are working to help another agency that sees excessive fraudulent applicants and in the past has issued over $65 billion in improper payments. Implementing automatic fraud scoring and triggers during the initial review of payment applications ensures that payments are stopped before fraud has been perpetuated. This saves not only the amount of the payment, but also the costly, and sometimes unsuccessful, collections process.
Of issue in the Treasury IG report was that fraud programs in place either weren’t being used or were not implemented correctly. In contrast, automated fraud scoring results in up to 90% reduction in manual reviews. This means that review periods are shortened and those applicants that have their access revoked can no longer continue fraud through an attempt at re-enrollment. This database of known fraudulent identities can then be shared with other organizations across the country for targeting and tracking fraudsters.
Contact us to find out more about how upfront fraud detection can be made easy.
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