Unmasking Fraud: How Data and Analytics are Transforming Prevention Efforts
By Babel Street
Highlights
- Detecting and preventing fraud in all its forms is a challenge for governments and businesses alike.
- Fraud prevention and detection can be bolstered by the monitoring and analysis of publicly available information.
- Fraud investigators frequently use public records for due diligence of current and prospective vendors, as well as ongoing monitoring once they’re under contract.
- Records searches and social media monitoring can also uncover information about beneficiaries and their continuing eligibility to receive services.
Detecting and preventing fraud in all its forms is a challenge for governments and businesses alike. Fraud touches everyone, whether it siphons taxpayer money from government programs, drains consumer gift cards, eats into corporate profit via counterfeit goods, or persuades people to part with their retirement funds.
In addition to enriching individual criminals, the revenue from perpetrating fraud is often funneled into organizations that traffic in drugs, humans, or radical ideologies. The hallmark of fraud is that it is based in deception and trickery and relies on successfully obtaining money under false pretenses.
According to the U.S. Federal Trade Commission, consumers reported losing more than USD 10 billion to fraud in 2023, a 14% increase over reported losses in 2022. Australians lost AUD 2.7 billion in 2023, according to a report by the Australian Competition and Consumer Commission.
When it comes to defrauding governments, fraudsters are relentless and creative. A 2024 report by Thomson Reuters on government fraud, waste, and abuse identified the top five methods used:
• Submitting false claims or making misrepresentations to obtain payment for which no entitlement would otherwise exist
• Using forged/fake documents to obtain benefits
• Account takeover or unauthorized online access
• Billing for unnecessary items or services
• Charging excessively for items or services
Although not in the top five, using synthetic identities is rapidly gaining traction for committing fraud.
At the same time, governments are challenged by constrained budgets, limited resources, increased workflow volume, and slow adoption and implementation of new technology. Yet, it is technology and particularly data and analytics tools that can help reduce these fraudulent activities.
The Thomson Reuters report indicated that the top method for detecting fraud was to do extensive cross-checking of social benefit recipients with other benefits programs and databases, such as death records, prison rolls, and unemployment insurance. This identity verification process can be greatly enhanced using AI-powered name matching that reduces false positive matches and facilitates automation.
Fraud prevention and detection can also be bolstered by the monitoring and analysis of publicly available information. Fraud investigators frequently use public records for due diligence of current and prospective vendors, as well as ongoing monitoring once they’re under contract. Records searches and social media monitoring can also uncover information about beneficiaries and their continuing eligibility to receive services. Specialized open-source intelligence tools can perform more thorough searches than everyday search engines, which have access to only a small percentage of the total internet.
Babel Street offers data and analytics solutions that address the most complex identity and threat intelligence challenges. Our AI-driven solutions can help governments detect and prevent fraud through enhanced investigations, pattern recognition, and automation.
Babel Street also provides access to comprehensive, multilingual publicly and commercially available information. Flexible deployment options enable seamless integration with existing systems, instantly enhancing search capabilities, simplifying workflows, and boosting efficiency. Name matching and text analytics capabilities provide adaptability, scalability, and speed to streamline complex identity screening and entity resolution processes, empowering governments to regularly conduct fraud prevention activities and reduce fraudulent activity.
Babel Street is partnering with ACS will at the ACS Panel Session: Data Intelligence - Using Advanced Technology in Fighting Fraud on 3 September, 5:30pm at ACS Canberra Hub.Please join the conversation and learn more by register and attend this event.
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