#2: Ongoing predictive & preventative analytics
The data you collect about customers and their products/warranties can be used to identify patterns that indicate fraud. The more data you have, the better algorithms you can build for predicting fraud, and the more specific and accurate your results will be.
By taking a historical view, advanced analytics can tell you, for instance, which product types, components, serial numbers, geographical locations and companies have had more fraudulent warranty activities. You should also tap into Known Fraudster Databases, which house information about people who have committed fraud and can provide insights into broad industry trends like fraud schemes, which you can use to flag similar patterns in your own data sets.
All this enables you to create risk indicators, use predictive propensity scoring to determine fraud likelihood for each warranty claim, and segment customers/claims by risk level. For instance, instead of processing higher-risk claims as you would lower-risk, they would be flagged for further examination according to rules you set for that risk level.
Also, keep in mind that because fraud can occur at any time and in any part of the warranty chain –registration, triage, advanced exchange, dispatch – it’s important to consistently and continually apply analytics throughout the process.
#3: Real-time control tower
Control towers are key to bringing data and analytics to life. They are where the analytics output, presentation and actioning takes place.
With the right control tower, you’ll be able to:
- Pull together fragmented data sets and provide an integrated view of the entire warranty process
- Run business rules that flag high-risk warranty claims and direct specific actions
- Obtain the visibility, insights and directions you need to prevent fraud
· See real-time and point-in-time status of individual and aggregate claims, for instance, how many cases were flagged as potentially fraudulent that day/week/month/quarter, where in the process the activity took place, how many high-risk claims are active, which types have been verified or rejected.
- warranty fraud trends so you can develop plans to address them
- Maintain an audit trail for fraud investigations and loss recovery
#4: Act fast
Speed is of the essence when it comes to fraud detection, prevention, and recovery. The longer it takes for each step in the process, the more time criminals have to conduct and cover up their activities. This means being fast in collecting data, analyzing data, identifying fraud, and investigating likely and/or known instances. Acting fast enables you to preserve evidence and make your moves while the data is still current and the crime is fresh.
To effectively combat fraud, some companies outsource their warranty claims program. Doing so gives them access to the rich data sets needed to compare their information against broader industry trends, and to experts who can build the right predictive models and take the right actions quickly, while freeing them to focus on their core business.
Bottom line? Be vigilant, always. When it comes to warranty fraud, you can’t let your guard down.