It’s hard to believe we’re already through the first month of 2020. Time flies. Before this new year gets too far along, we want to highlight the primary fraud trends we’re seeing. Many of them carry over from last year, however, this makes them no less threatening. If anything, it should remind you to be on your guard. They’re not going away and, in many cases, they’re escalating. 

You’ll see these trends have a global reach. As our global economy continues to shrink, opportunity for fraud rises. This brings cultural, political, and economical differences into play both in the crimes committed and our investigation tactics. Keep this in mind as you read. 

 1. Evolving technology. Technology continues to advance at a blistering pace. It’s imperative to be vigilant and prepared when it comes to cybersecurity. Phishing schemes and malware, two fraudster favorites, continue to cause disruption and financial loss. And in the financial sector, where there’s a heavy reliance on computer automation, cyber threats and synthetic identities are, and will continue to be, a serious threat.  

      How we’re responding: Our efforts in this area are twofold: we stay abreast of emerging anti-fraud tools and we partner with renowned experts creating the next anti fraud solutions. 

        2. Privacy laws. This continues to be a major issue with global impact. The EU reinforced their GDPR last year and North America continues to follow their lead by tightening its privacy laws. This makes it difficult to conduct effective investigations in those regions. And while investigation and adjudication practices are changing in response to this trend, privacy laws continue to be an attractive and effective hiding place for fraudsters. Watch for new California Privacy legislation that will mimic GDPR law closely. 

        How we’re responding: We track both domestic and international legislation to help our clients effectively adjudicate claims. We also follow emerging trends closely.

         3. Immigration. This continues to affect the landscape in many countries as well as increasing claims. Expect to see claims from émigrés from the Middle East living in Europe and those from Central America and the Caribbean now living in the U.S. and Canada. The best defense in this area is thorough document checks, especially those submitted electronically. 

          How we’re responding: We continue to expand our global investigation team to ensure we have local experts on-hand who can verify documentation quickly and efficiently.

           4. Nomadic fraud. This risk continues to rise and dovetails with advancing technology and the dependence on automation, particularly sophisticated synthetic identities. We also continue to see a loss of experienced investigators, which compounds the problem as there’s a loss of knowledge and experience. It’s imperative to implement risk controls that can detect this type of fraud. Underwriting and staff education are key in detecting and defeating this type of pervasive fraud. 

           5. China and Southeast Asia. As these areas continue to grow and flourish, we’re seeing an uptick in due diligence work associated with business opportunities and medical misrepresentation prevention. Both these areas are challenging due to the closed and tightly guarded nature of the area’s Communist countries. Criminal, civil, medical, employment and banking histories are extremely difficult to obtain and verify and yet, they’re crucial to fraud avoidance. 

            How we’re responding: We continue to expand our resources in the region and have partnered with top level law enforcement channels that gives us an edge in the region.

            Please note: Recently, there have been major arrests in China where thousands of fabricated identities and documents were being sold in the black market. Please be cautious if you have dealings in this area. 

             6. Mexico and Latin America. We continue to see more activity in Mexico and Latin America. In Mexico, the primary areas for fraudulent claims in property and casualty along with insurance fraud are consistent with what we saw in 2019. Given the economic climate in South America, we also expect to continue investigating false identities, which are regularly used for insurance fraud, a revenue stream for residents. 

              How we’re responding: We continue to increase our resources along the US/Mexico border where we provide regular assistance to manufacturing/maquiladoras operating there. We’re also increasing our Executive Protection and security assessments for the pharmaceutical and manufacturing industries. For people traveling to Mexico and Central America, we’re developing a SOS service they can use in case of emergencies. 

               7. Africa. Like these other regions, we’re seeing an increase in fraudulent death and medical claims in Africa. However, unlike China and Southeast Asia, African fraud detection is difficult due to lax regulations and record keeping. Pervasive government corruption and regional terrorist groups also makes it extremely difficult to find and authenticate documentation. This is one region where it’s vital to work with an investigation partner, like DIG, who’s familiar with the environment and has local investigators.

               8. Questionable disappearances. We had a major increase in these cases last year. We find they hinge on quick response times and thorough background investigations into the insured. Usually the family quickly retains a lawyer, who subsequently becomes a barrier to securing thorough interviews and performing forensic examinations of computers and telephones. If you’re faced with one of these situations, time is of the essence. Secure an investigation partner quickly

                They say an ounce of prevention is worth a pound of cure. It’s worth more than that. It can save you millions in time and money. Please take the time to review your fraud prevention protocols and practices. If you’re not sure where to start or need help determining if your system is effective, call us. Our experts are happy to give you the support.

                Have questions about these fraud trends? Need more information on fraud prevention? Contact us!

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