Q&A: Corporate fraud & corruption in the UK 2021

The United Kingdom scores 77 out of 100 on Transparency International’s (TI)  2020 Corruption Perceptions Index (CPI), as is one of the 25 least corrupt countries across the globe. However, it all seems great on the surface as corporate fraud and corruption cases have been noticeable in various industries across the UK. TI reports that corrupt actors enjoy their illicit gains by “buying luxury property in the world’s most sought-after cities, like London”. Based on the article “CPI 2020: Trouble in the top 25 countries”, “While the UK (77) is the first G20 country to launch a public register of beneficial ownership, a loophole in the law allows foreign companies to purchase real estate anonymously. This is particularly problematic as research shows that over 75 per cent of properties subject to criminal investigations between 2004 and 2015 used offshore anonymous companies to hide their owners’ identities. The UK government committed to closing this loophole by introducing a register of beneficial ownership for property, but it has yet to be implemented. The necessary legislation has been subject to significant delays. In the meantime, rich businesspeople linked to autocratic regimes are allegedly purchasing property via shell companies, such as billionaire and daughter of former President of Angola, Isabel de Santos.”

To discuss the situation of corporate fraud and corruption, CRI Group and its ABAC® Center of Excellence were invited to share the expert views in the special InDepth Feature by Financier Worldwide “Corporate fraud and corruption 2021”. In this edition, CRI Group’s CEO Zafar Anjum and ABAC®’s Scheme Manager Huma Khalid talk about how corporate fraud and corruption affect businesses not only in the UK, but across the globe, and provide solutions and insights for businesses to become better protected from corporate fraud, bribery and corruption. Read on the answers to the below questions:

  • To what extent have you seen a notable rise in the level of corporate fraud, bribery and corruption uncovered in your country of focus?
  • Have there been any legal and regulatory changes implemented in your country of focus designed to combat fraud and corruption? What penalties do companies face for failure to comply?
  • In your opinion, do regulators in your region have sufficient resources to enforce the law in this area? Are they making inroads?
  • If a company finds itself subject to a government investigation or dawn raid, how should it respond?
  • What role are whistleblowers playing in the fight against corporate fraud and corruption? How important is it to train staff to identify and report potentially fraudulent activity?
  • What advice can you offer to companies on conducting an internal investigation to follow up on suspicions of fraud or corruption?
  • What general steps can companies take to proactively prevent corruption and fraud within their organisation?

Q: To what extent have you seen a notable rise in the level of corporate fraud, bribery and corruption uncovered in your country of focus?

A: The COVID-19 pandemic has created increased opportunities for fraud worldwide. The UK is not immune, unfortunately, and such a disruptive event as the pandemic increases the likelihood that normal safeguards and risk management controls can be bypassed and subverted. There has been an increase in reported fraud and corruption cases over the past year. A survey of fraud experts by the Association of Certified Fraud Examiners (ACFE) in August 2020 showed that 77 percent were seeing an increase in fraud. Perhaps not surprisingly, cyber fraud is the fastest-growing problem area, but there has also been an uptick in unemployment fraud. This is bad news in the UK, where fraud is our most common crime, costing the country £190bn annually, according to the Royal United Services Institute (RUSI).

Q: Have there been any legal and regulatory changes implemented in your country of focus designed to combat fraud and corruption? What penalties do companies face for failure to comply?

 A: There is proposed legislation, supported by the secretary of state of the UK’s Department of Business, Energy and Industrial Strategy, that would increase accountability for corporations that produce falsified financial statements. This includes a provision that would require company directors to personally sign off on their corporation’s financial statements, under penalty of fines and possible prison time. Under the Sarbanes-Oxley Act in the US, the penalty for falsely certifying such statements is steep: up to 20 years in prison and up to $5m in fines, and the UK is looking at similar measures to step up its fight against fraud and corruption. The UK also recently approved the formation of an audit, reporting and governance authority (ARGA) that should come into force within the next two or three years. Accordingly, the UK is taking a stronger stance against fraud going forward.

> STAY UPDATED: Sign up for risk management, compliance, corporate and background investigations, business intelligence and due diligence related news, solutions, events and publications

 Q: In your opinion, do regulators in your region have sufficient resources to enforce the law in this area? Are they making inroads?

A: Combatting fraud is never straightforward. When looking at progress in detecting and preventing fraud, it sometimes feels like a question of whether the glass is half full or half empty. For example, the Serious Fraud Office (SFO) brought 13 fraud defendants to trial in 2019 and 2020, with a 95 percent four-year success rate by case. Many of these represent large frauds, and they are meaningful wins, but how many more fraudsters are out there undiscovered? Other bodies, including Her Majesty’s Revenue and Customs (HMRC), among others, also have key roles to play in investigating fraud, but a considerable amount of fraud is still investigated and prosecuted at the local level. It is important for leaders in the UK to know what resources law enforcement have and where they need training and support in the fight against fraud.

Q: If a company finds itself subject to a government investigation or dawn raid, how should it respond?

A: Any investigation, and especially a raid, can be an incredibly stressful time for a company and its employees. The important thing is to not panic – the investigators have a job to do, and the sooner they get to the truth of the situation, the better for everyone. Companies should direct their management and their employees to cooperate fully, while also engaging legal counsel to properly protect the corporation from future litigation. If fraud is detected, it is a criminal matter and the company should make a good faith effort to work with prosecutors and regulators, while making sure to document all control measures and prior steps taken to manage fraud risk. Having a track record of meeting compliance requirements and having proper internal controls in place at the time fraud occurs could have a mitigating effect in terms of potential prosecution and penalties down the road. View the reprint of the interview, covering not only the UK but also the United Arab Emirates.

Q: What role are whistleblowers playing in the fight against corporate fraud and corruption? How important is it to train staff to identify and report potentially fraudulent activity?

A: Employees are a company’s first line of defence against fraud and corruption. But training them to recognise the red flags of fraud is only half of the process. The company must also implement a reporting system that is anonymous and easy to use, so that employees are encouraged to report any suspicions. Then, the company must follow through and fully investigate any reports that do come in. If they do not, whistleblowers will believe that combatting fraud and corruption is not a corporate priority, and the tips will stop coming in. How important are those tips? According to the ACFE, they are by far the highest detection method for fraud, well above audits and other means. The company should communicate that a whistleblower hotline or online reporting system is available, and that there is a zero-tolerance policy for any type of retaliation against whistleblowers. Over time, the tips will come in.

Q: What advice can you offer to companies on conducting an internal investigation to follow up on suspicions of fraud or corruption? 

A: Investigations can be challenging, and they require expertise. For example, there are rules for collecting and handling evidence, including physical evidence and witness statements, that must be followed for such evidence to be admissible in court. There are also laws in the UK dealing with privacy and the rights of the accused. The bottom line is that a company already dealing with a potentially costly and damaging fraud scenario should not risk adding more legal trouble through a faulty investigation. Hire experts who deal with corporate crime and specialise in fraud and corruption cases. Like any other area of expertise, they will have the knowledge and resources to help proceed with an investigation and lead it to the most favourable outcome for your company. If you already have anti-fraud professionals on staff, let them take the lead, but provide outside resources as needed.

Q: What general steps can companies take to proactively prevent corruption and fraud within their organisation? 

A: A fraud prevention strategy has many different elements, and the sooner companies implement them, the sooner they can begin to work together in a proactive way to prevent fraud. Mandating employee training, such as ISO 37001 ABMS, having an ethical code of conduct signed by every member of staff, providing regular and surprise audits, and implementing a fraud reporting system are all effective ways to help prevent and detect fraud and corruption. None of these methods is strong enough on its own to properly protect organisations. But together, they can be very effective. It is also important to set a ‘tone at the top’, from ownership, directors and management on down, that fraud will not be tolerated. Anti-fraud controls only work if the company sees them through and thoroughly investigates every report. When fraud is confirmed, any perpetrators should be terminated and potentially prosecuted, sending a message of zero-tolerance.

> Find out more about the ISO 37001 training

About CRI Group

]Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk ManagementEmployee Background ScreeningBusiness IntelligenceDue DiligenceCompliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, the CRI Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management SystemsISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][accordion_son title=”Meet our CEO” clr=”#ffffff” bgclr=”#1e73be”]Zafar I. Anjum, is the Group Chief Executive Officer of CRI Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due diligence and employee background screening services for some of the world’s leading business organisations.  Headquartered in London (with significant presence throughout the region) and licensed by the Dubai International Financial Centre-DIFC, the Qatar Financial Center-QFC, and the Abu Dhabi Global Market-ADGM, CRI Group safeguards businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI Group maintains offices in UAE, Pakistan, Qatar, Singapore, Malaysia, Brazil, China, the USA, and the United Kingdom.

Contact CRI Group to learn more about its 3PRM-Certified™ third-party risk management strategy program and discover an effective and proactive approach to mitigating the risks associated with corruption, bribery, financial crimes and other dangerous risks posed by third-party partnerships.

 

CONTACT INFORMATION

Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI Group Chief Executive Officer
37th Floor, 1 Canada Square, Canary Wharf, London, E14 5AA United Kingdom
t: +44 207 8681415 | m: +44 7588 454959 | e: zanjum@crigroup.com

 

Source & Credits

The original version of the Q&A was published on Financier Worldwide’s InDepth Feature: Corporate Fraud & Corruption 2021Download the reprint here.

 

The Unseen Enemy: Insurance Fraud – Part III

This three-part series of articles examines the problem of insurance fraud, including its pervasiveness and general characteristics in the United States, the United Kingdom and the world. Insurance fraud is a widespread problem that requires real solutions and is often difficult to detect and combat.

Part One of the series, “What is Insurance Fraud,” provides an introduction to a topic that is important for any business leader, insurance professional, compliance agent or fraud investigator. Part Two, “How do Companies Detect Insurance Fraud,” details red flags of insurance fraud that help tip off investigators to possible illegal behaviour. Part Three, “Anatomy of an Insurance Fraud Investigation,” provides a look at case studies and reveals key tips for handling a successful investigation. To receive the next series subscribe to our monthly newsletter here!

Taken as a whole, this series is the perfect primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraud claims. It provides the tools and knowledge needed to effectively combat insurance fraud.

Part Three: Anatomy of an Insurance Fraud Investigation

The insurance fraud epidemic is of serious concern to businesses, insurance providers and consumers worldwide. In Part One of this three-part series, we examined the scope of the problem, and discussed a few cases that illustrate the magnitude of insurance fraud. In Part Two, we looked at how companies can detect insurance fraud, including how to recognise the red flags that represent potential criminal behaviour.

In this final Part Three, we’ll examine the elements of an insurance fraud investigation, beginning with a case study that illustrates how CRI Group’s insurance fraud investigators exposed fraud schemes – saving its clients thousands of dollars.

Case Study: Health Insurance Fraud

A CRI Group client requested an investigation of a health insurance claim filed by one of their employees, “Mr. Jones.” Mr. Jones claimed that while on an official visit to UAE from the U.S., he felt sudden abdominal pain with nausea and vomiting lasting 18 hours. He was admitted to a clinic and stayed under observation for two days, which cost him around $4,000 (US).According to the claim, Mr. Jones (name changed) was discharged from the clinic, but then felt the return of his sickness, so he was admitted to another clinic for two more days. During this time, he was kept under observation. For this second clinic visit, he was charged nearly $1,000.

As part of CRI Group’s “experts in a field” approach, a local investigator visited both of the clinics involved in the claim. One clinic was located in Dubai, while the other was in Abu Dhabi. When he arrived at the Dubai clinic, CRI Group’s local expert immediately learned that the clinic deals specifically in cosmetic surgery for women. In fact, as advertised on the outside of the clinic, its services are only for women. The clinic’s administrator confirmed that the clinic is only in the business of providing cosmetic surgery for women.

CRI Group’s local investigator then visited the clinic in Abu Dhabi. This clinic also appeared to be in the business of providing cosmetic surgery for women. When the local expert tried to contact the doctor who was named as the treating physician for Mr. Jones, the doctor was hesitant to meet the expert. CRI Group’s expert showed the report to the doctor, and though it was on the official letterhead of the clinic, the doctor first denied involvement in the case.

Later, the doctor told CRI Group’s expert that while “we don’t treat that kind of illness,” the patient “was in such bad condition that we treated him on a humanitarian basis.” Yet the doctor was hesitant to accept that the bills came from his clinic (the expert had already learned that the doctor in question was also the owner of the clinic). Regardless, CRI Group successfully secured the evidence that the health insurance invoices were fake and Mr. Jones was making false claims to get money from his employer.

 

When it’s Time to Open an Investigation

When red flags of fraud are uncovered, it’s time to begin an investigation. As you can see from the examples above, CRI Group’s investigations are based on a thorough approach that includes site visits and leaving no stone unturned. When you work with CRI Group, this is how the process will typically proceed. CRI Group will:

  • Assign the appropriate investigators with the right expertise in that area to investigate the claim.
  • Contact the parties involved to gather all relevant details about the incident.
  • Use all resources available, including police reports, court filings, database records and other means to establish the truth in insurance fraud cases.
  • Make site visits, speak to witnesses, take photos and establish timelines as needed to create a full, truthful story of the incident.
  • Uncover useful evidence, carefully documenting and preserving it in a way that is admissible in court.
  • Present investigation findings to the client, with recommendations on how to proceed. Sometimes, legal action is warranted.

Working with an insurance fraud investigation company like CRI Group provides the advantage of having an independent, impartial and unbiased third-party collecting the facts you need regarding any case that might involve potential fraud. CRI Group has been safeguarding businesses for more than 28 years, and you will be assured of the quality, professionalism and discreet nature of all investigations conducted by our experts.

Our global presence ensures that no matter how international your operations are, CRI Group’s investigations have the network needed to provide you all necessary support, wherever you happen to be. We take great care to ensure that our trained and licensed investigators are the best at what they do.

3 types of insurance fraud investigations

1.     Social Media Evidence

“Social media is an absolute gold mine” for insurance fraud investigations, according to Kelly Riddle, founder of private investigation company Kelmar Global. Many people think that setting high privacy settings on their social media accounts makes everything they post impossible to access. On the contrary, social media platforms usually hand over user information if they receive a subpoena for it.

Fraudsters often slip up online and post information revealing their fraud. For instance, someone receiving worker’s compensation for an injured foot may post a video of themselves playing soccer with their kids. Or, someone else may unintentionally expose their scheme, as is the case if friends and family tag the claimant in an incriminating post.

Fraudsters who are proud of their work may boast about it on social media, thinking they will never get caught. Make sure to search for alternate accounts as well as the claimant’s main social media pages to find as much of this type of evidence as you can.

2.     Activity Check

In order to learn everything you can about the claimant, you need to see where and how they live. Good old-fashioned surveillance of their home or workplace can provide evidence. For example, someone who has claimed compensation for a shoulder injury leaving their home with a tennis racket, that is possible evidence for insurance fraud.

While you are in the claimant’s neighbourhood, canvass others in the community. Even if the neighbours don’t know the person well, they may have observed their lifestyle. Ask about the insured person’s financial situation, which can indicate if they are in need of quick money.

In property insurance fraud investigations, be sure to also ask neighbours if they have seen or heard anything out of the ordinary around the time of the claim. This can include moving trucks or more comings and goings than usual from the claimant’s home. They can also help you determine whether or not the claimant is actually living in their home.

3.     Fake Documentation of the Claim

Just because a claimant has included all of the relevant documents in their claim doesn’t mean they aren’t committing insurance fraud. In fact, fake documentation is a very common way to pull off a fraud. Signs of false documents include:

  • An unusual number of receipts.
  • Falsified receipts.
  • Fake affidavits.
  • Photos or receipts used for more than one claim.

When studying accompanying documentation during an insurance fraud investigation, use a keen eye to spot signs of editing. Inconsistent lighting in photos and fonts that don’t match the rest of the document are some common examples. Be sure to also review the claimant’s history to see if they have claimed loss of the same items before

6 Keys to Successful Insurance Fraud Investigations

1. Follow the Law

Nothing can derail your insurance fraud investigation quicker than finding out you have conducted it in violation of the law. Every jurisdiction is different, and privacy laws are the major consideration in these types of investigations. Understand the laws regarding filming or recording a subject or a witness, as doing it without their consent might be a violation of their rights. This is where it is helpful to engage the experts. At CRI Group, our investigators are trained and knowledgeable about local laws and the importance of proper evidence collection. Avoid trying to collect information by deceptive means, such as “friending” a subject on social media.

2. Conduct an Initial Assessment

It’s important to gather the known facts of the case at the outset of your insurance fraud investigation: You need to have some idea of the who, what, when where, and how of the case. With your baseline facts in place, your investigation will proceed much more smoothly. Keep in mind that the subject of an insurance fraud investigation might work quickly to conceal or destroy evidence if they know they are under suspicion. You should make sure to immediately secure all documents and other evidence that you might need late in your investigation. If you are conducting the investigation for a client, make sure they follow proper security measures to keep evidence intact, especially when it comes to digital evidence.

3. Plan the Investigation Well

An effective investigation is one that is carefully planned. Failure to do so can cause problems from the outset, such as missing important details and evidence in the case, or running afoul of regulations such as reporting to FinCEN in the U.S. or FINTRAC in Canada. Before you start the investigation, think about questions like:

  • Who should be interviewed?
  • In what order should you conduct those interviews?
  • What supporting documents do you need to collect?
  • Are there any other allegations against the subject?
  • Which entities need to be informed of the investigation and how should it be done?

Carefully document all the details and steps taken during the case to make sure your insurance fraud investigation stays on track.

When engaging with CRI Group, a fraud investigator will be allocated to your case. Read more about their skills and expertise in our article “The role of a FRAUD INVESTIGATOR.”

4. Perform Great Interviews

This is where being an effective communicator comes into play. Most successful investigations include subject and witness interviews as a critical part of the evidence-gathering process:

  • You need to ask questions in order to find out the “how” and “why” an insurance fraud has occurred.
  • The best interviews are those in which the interviewer is in complete control, yet the subject or witness feels comfortable and undistracted. Have some general questions prepared, but engage the subject in a conversational style, and don’t hesitate to go “off-script” to learn more information.
  • Be friendly and establish trust and build rapport with the subject. Small talk is encouraged, plus warming up with some easy questions so that the interviewee feels comfortable talking to you.
  • Don’t ask “yes” or “no” questions. Instead, ask open-ended questions, such as “tell me about what you did that morning” or “what happened that day?”

5. Understand Evidence

During an insurance fraud investigation, and when reporting the results, an investigator should take care to separate his opinion from the facts of the case. The investigator should let the hard facts of evidence speak for itself in the case, rather than engaging in speculation or providing opinions on guilt or innocence. This is why proper evidence collecting and examination is so important. Files, documents and other evidence should be kept secure and chain-of-custody should be maintained. Never alter or mark up original documents or files with your own notes, even if they seem relevant. Keep copies for your files and make sure nothing slips through the cracks.

6. Report the Findings

When your investigation has concluded, it’s time to report the results. Prepare a thorough, facts-based report detailing the evidence and your findings. A good investigation report should include the following items:

  • Your understanding of the allegation (who, what, where, when, how)
  • The steps taken in the investigation
  • Copies of documents and other material evidence
  • A list of interviewees
  • A summary of interviews
  • A conclusion as to whether the allegation was substantiated or not

Write your report in objective language, avoiding judgemental or inflammatory adjectives when describing details of the case. Use as many direct quotations as possible from interviewees or documents. Only include facts, not opinions or inferences, in your report.

This three-part series of articles is part of our “The Unseen Enemy: Insurance Fraud” e-book. The e-book contains actionable advise on how to protect your business from insurance fraud and much more. Download the FREE e-book here!

 

Who is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

CRI supports Fraud Week 2020

International Fraud Awareness Week, 15-21 November 2020 – and CRI Group is once again a proud Official Supporter of this global movement. Fraud Week was created to reduce the impact of fraud and corruption by promoting anti-fraud awareness and education.

Fraud statistics

Fraud is still increasingly common. Even when it comes to hiring employees, companies must be vigilant. CRI Group’s investigative team found that providing incorrect employment details is the most common red flag, as it was uncovered in about 4.5 per cent of background screenings. This is followed by providing incorrect education degree details as well as having adverse media (unfavourable news or online mentions), both at 2.33 per cent. Most employers would probably say that when it comes to educational background, the only thing worse than providing incorrect degree information would be outright claiming a fake degree – which occurred in nearly 2 per cent of cases.

> Read more in our article “Background Screening Red flags: Numbers Don’t Lie”.

In another survey conducted by CRI Group, which analysed how COVID-19 has impacted human resources and its functions, it was revealed that companies understand the fraud risk factor during the pandemic: nearly 77 per cent of HR professionals accept that there is a risk that employees can initiate fraudulent activity because of the work-from-home arrangement. Also, the shocking number of survey participants highlighted that they have encountered employee fraud in their career. Luckily, most companies do conduct background screening of some type. In fact, 85 per cent do so, which is important because many companies have learned that trust can be misplaced. While an overwhelming 92 per cent said they trust their employees with confidential data, background screening can help verify that your employees aren’t hiding anything in their backgrounds that might put your company at risk.

> Read more about the survey, as it provides valuable information for companies, employees, and human resources professionals and teams who serve them. It also sheds light on the critical need for increased employee background screening and data protection during a tumultuous time.

Some other stats to note (the following come from the ACFE):

  • The average fraud lasts 18 months before it is discovered. The longer a fraud lasts, the greater the financial damage (schemes that last for several years can cause hundreds of thousands of dollars).
  • The most common detection method for fraud is tips. And organisations that have reporting hotlines are much more likely to detect fraud through tips than organisations without hotlines.

All of the above indicates that the fraud issue is real and organisations must take actions to prevent the fraud risks for their organisations and even careers. For CRI Group, the goal is to help business leaders think about fraud and corruption this week and take steps to minimise it year-round. So, what is your organisation doing for Fraud Week?

Get involved in the Internal Fraud Awareness Week

Join CRI Group and ACFE in the fight against fraud. ACFE provides a great set of the following tools to go a step further in your role and to start discussions amongst peers, co-workers, executives and stakeholders in your community about how important fraud prevention is to society as a whole:

  • Post on social media using new badges and informative images with the tag #fraudweek
  • Add the new Official Fraud Week Supporter badge to your email signature.
  • Invite a CFE to talk to your employees and co-workers virtually on how to avoid common mistakes when preventing fraud.
  • Download the free Fraud Week logo to share on materials or websites.
  • Involve your local chamber of commerce or city council to spread tips on fraud prevention for small businesses.
  • Encourage your governor to issue a proclamation (.doc) declaring that your state supports Fraud Week.
  • Host a talk or seminar for your co-workers or community on regularly staying aware of fraud prevention best practices. You can post that event to share what you are doing on our events page.
  • Perform a fraud check-up for your organisation and present your findings to executives, as well as a proactive plan for how to remedy weak spots in your current controls.

How does CRI Group fight fraud?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301:2021 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

Fraud Week

[/vc_column_text][/vc_column][/vc_row][vc_section][accordion_father caption_url=””][accordion_son title=”2018 Fraud Week” clr=”#ffffff” bgclr=”#1e73be”]CRI Group proudly celebrates International Fraud awareness week and highlights that this occasion (called Fraud Week, for short) is an important effort to put a spotlight on fraud, help educate people about its perils and build a fraud-free future.

“Fraud Week reminds us that awareness is any organisation’s first line of defence against fraud and corruption, as properly trained employees will have a better opportunity to recognise the red flags of fraud, and a better understanding of their organisation’s zero-tolerance policy toward such behaviour”, Zafar Anjum, founder and CEO of CRI Group says.

“Fraud is everybody’s problem, and it cannot be prevented and detected if employees aren’t provided with the information they need to combat it. Providing a robust anti-fraud training program increases your company’s protection from risks of fraud and unethical behaviour. An ounce of prevention is worth more than a pound of cure.”

For CRI Group, though, helping organisations prevent and detect fraud is a year-round commitment. That’s why Fraud Week is a great time to reflect on CRI Group’s recent efforts in the fight against fraud, and to also look ahead to activities on the near horizon. Below are just a few of the highlights.

CRI Group is here to help and create a fraud-free future. Contact us today to learn more about our ABAC training and certification opportunities, our EmploySmart background checking process, our investigative services and other offerings.

 

Who is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][accordion_son title=”2017 Fraud Week” clr=”#ffffff” bgclr=”#1e73be”]2017 International Fraud Awareness Week (also called “Fraud Week”) kicked off on Sunday and is in full swing. CRI Group is a proud supporter of this important initiative every year, and we encourage business leaders to take this time to consider all of their fraud prevention measures, including anti-fraud training for employees.

Does your organisation have a training program in place that addresses fraud, bribery and corruption? And, if so, how robust is your training? How often is it administered? And how do you know it’s working?

These are important questions, especially considering the fact that we know most fraud is discovered internally through employee tips. A recent case study is a perfect illustration of that.

Case study: Conflicts of interest

A major pharmaceutical company’s security department received conflict of interest complaints that reportedly involved a range of employees, from sales personnel on up to the chief financial officer (CFO).  The company engaged CRI Group to conduct an integrity due diligence and conflict of interest investigation in order to uncover unethical practices, including bribery and corruption, by senior employees.

CRI Group’s investigators quickly launched a risk assessment of the company’s third-party relationships, which included several interviews with identified vendors and suppliers to help ascertain the engagement process and associated risks.

Investigators found one of the vendors used letterhead that lacked a physical address, and the only contact information listed was a single cell phone number. Site visits, background checks and interviews helped determine that the suspicious vendor was not a company at all – but a single person, and he was none other than the brother-in-law of the client company’s CFO. Worse still was the fact that this obvious fraud was being conducted right under the noses of the company’s procurement and finance professionals.

CRI Group investigators discovered that the individual’s residence was being utilised as a warehouse to help facilitate the fraud. Comprehensive litigation records check with local and regional courts found that the subject was previously convicted in federal court and spent three years in prison for the charges of selling counterfeit products, physician samples and expired medicines; further regulatory checks found that his pharmacist license had been cancelled.

The fraud had continued for five years. However, the one thing that saved the company from further financial harm was the fact that employees had stepped forward to report unethical behaviour. If not for their action, the fraud could have continued indefinitely.

Fraud Week reminds us that awareness is any organisation’s first line of defence against fraud and corruption, as properly trained employees will have a better opportunity to recognise the red flags of fraud, and a better understanding of their organisation’s zero-tolerance policy toward such behaviour.

CRI’s Certification body, ABAC Center of Excellence provides employee training as part of the curriculum for a participating organisation. In fact, ISO 37001:2016 certifies that your organisation has implemented reasonable and proportionate measures to prevent bribery, and these measures involve training, top-level leadership, bribery risk assessment, due diligence adequacy, financial and commercial controls, reporting, audit and investigation.

Some key things to remember:

  • Anti-fraud training should be mandatory. This includes managers and executives, who should also receive special training regarding their position of responsibility.
  • Anti-fraud training should be an element of new employee orientation. After that, it should be provided to all employees on an annual basis, if not more frequently.
  • Training might be presented live (in-class), on video or online in an interactive format. The live class is preferred, as it allows questions and personal engagement. However, in today’s business world, some employees work remotely and an online format may be more feasible.

Fraud is everybody’s problem, and it cannot be prevented and detected if employees aren’t provided with the information they need to combat it. Providing a robust anti-fraud training program increases your company’s protection from risks of fraud and unethical behaviour. An ounce of prevention is worth more than a pound of cure.

Learn more about how CRI Group and the ABAC Center of Excellence can help you have a well-trained workforce serving as your front line of defence against fraud, bribery and corruption.

 

Who is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][/accordion_father][/vc_column][/vc_row][/vc_section]

The Unseen Enemy: Insurance Fraud – Part II

This three-part series of articles examines the problem of insurance fraud, including its pervasiveness and general characteristics in the United States, the United Kingdom and the world. Insurance fraud is a widespread problem that requires real solutions and is often difficult to detect and combat.

Part One of the series, “What is Insurance Fraud,” provides an introduction to a topic that is important for any business leader, insurance professional, compliance agent or fraud investigator. Part Two, “How do Companies Detect Insurance Fraud,” details red flags of insurance fraud that help tip off investigators to possible illegal behaviour. Part Three, “Anatomy of an Insurance Fraud Investigation,” provides a look at case studies and reveals key tips for handling a successful investigation. To receive the next series subscribe to our monthly newsletter here!

Taken as a whole, this series is the perfect primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraud claims. It provides the tools and knowledge needed to effectively combat insurance fraud.

Part Two: How Do Companies Detect Insurance Fraud?

The insurance fraud epidemic is of serious concern to businesses, insurance providers and consumers worldwide. In Part One of this three-part series, we examined the scope of the problem, and discussed a few cases that illustrate the magnitude of insurance fraud. In Part Two, we answer the question: How can companies detect insurance fraud cases before they do irreversible damage? Working with the right experts, any company can be better protected and detect more insurance fraud.

CRI Group’s expert insurance fraud investigators have the experience and training to help business leaders identify the red flags of insurance fraud, alerting them to

The following are 6 red flags of Insurance Fraud that CRI Group’s investigators are trained to recognise:

1. Suspicious timing

Sometimes a claim is made very shortly after the inception of the policy, such as within months, weeks or even days after the insured has been enrolled. This is an obvious red flag, yet it happens more often than you’d think. Another similar tip-off to potential fraud is when the insured makes a claim soon after an increase or change in the coverage. For example, a motorist increases their auto coverage from liability to collision insurance, and soon after files a claim under their collision policy when their car is “totalled” in a one-vehicle accident. An investigator from CRI Group would certainly look deeper into the circumstances of the claim.

2. Frequent insurance claims and losses

We often hear that “some people are just unlucky.” That may be true, but a string of alleged bad luck that results in frequent insurance claims and payouts can signal that there is more than meets the eye. CRI Group is trained to look at the history of every claimant and uncover potential fraudulent actions. Some insurance fraudsters think they can avoid detection by filing their claims in totally different areas, like auto, health and homeowners’ insurance. Expert investigators know how to put those pieces together to look for trouble signs.

3. Sketchy details

Sometimes a claim for theft or fire will be for recently purchased and/or expensive property, without a lot of documentary evidence to back up the claim. That’s a red flag, along with when an insured cannot remember, or does not know, where the claimed property was acquired, or cannot provide adequate descriptions. A proper insurance fraud investigation will seek to corroborate the details of the claim, and require an examination of all supporting documentation to make sure it is complete and legitimate.

4. Details that are “too perfect”

On the other hand, sometimes the details surrounding a claim seem perfect – a little too perfect. CRI Group has investigated cases in which the insured had receipts and other documentation, witnesses, and duplicate photographs for everything. So what’s the problem? Things lining up a little too perfectly can tip off an investigator that things have been planned and orchestrated, and there might be fraud involved. That’s when it’s time double-check the documentation carefully, and interview witnesses to verify the facts.

5. Irregular documentation

We’ve discussed the importance of documentation in the investigation of a claim – whether it might be missing, or seems to be “too perfect.” But sometimes the documentation provided by the insured is irregular or questionable, which is another red flag of insurance fraud. CRI Group’s investigators look for issues with documentation such as:

  • Numbered receipts from the same source, but are dated differently or sequentially.
  • Altered documents, including receipts or invoices with dates or amounts changed.
  • The insured provides only photocopies of documents, instead of originals.
  • Similar handwriting or signatures on different documents that are purportedly from different sources.
  • Errors, such as miscalculated sales tax, or name and address misspellings, etc.

These are just a few of the issues that experts are trained to look for, and they know how to read the warning signs in the documentation that a layperson might overlook.

6. Financial difficulties

Most of us have run into financial trouble at least once or twice – overextended credit, bad investments, perhaps an ill-advised purchase. The problem is that some individuals, whether out of desperation or greed, will resort to fraud to try to straighten out such financial difficulties. CRI Group’s fraud investigators are careful to look at all aspects of a claim. Did the insured recently take a financial loss? Did they declare bankruptcy, or go through a costly divorce? These red flags become especially important when paired with one (or more) of the other red flags discussed in this article. Investigators must be vigilant, as financial pressure is one of the leading contributors to fraud.

What comes next?

Insurance fraud cases cover a wide range of schemes and crimes, and the red flags described above are just a few of the issues that insurance fraud investigation companies are trained to look for and uncover in the course of an investigation. In part three of this series, we will examine how CRI Group’s insurance fraud investigators proceed when such red flags lead to fraud, and it’s time to launch an investigation. CRI Group’s investigations cover the full range of insurance fraud cases, from health care fraud to disability and even fake death claims, always with the goal of providing the best resolution for our clients.

Are you interested in the next series? This three-part series of articles is part of our “The Unseen Enemy: Insurance Fraud” ebook with actionable advise on how to protect your business from insurance fraud and much more. Download the FREE ebook here!

The Unseen Enemy: Insurance Fraud | Mock Up 1

 

 

 

 

 

 

About CRI Group

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

Sources & Credits

  1. LexisNexis Legal Newsroom, titled “Insurance Fraud – Red Flags.” https://www.lexisnexis.com/legalnewsroom/insurance/b/insurance-law-blog/archive/2008/05/16/insurance-fraud-_2d002d00_-red-flags.aspx
  2. Property Casualty 360, titled “10 red flags that could signal a fraudulent Auto claim.” https://www.propertycasualty360.com/2016/03/16/10-red-flags-that-could-signal-a-fraudulent-auto-c/?slreturn=20180306103605

The Role of a Fraud Investigator

Fraud investigators are the front line of establishing the facts of suspected fraud or other unethical business behaviour. A fraud investigator’s skillset and wide knowledge of fraud laws, evidence gathering and interviewing make them the go-to expert for investigating insurance fraud, financial fraud, procurement fraud, asset recovery, cyber fraud, healthcare fraud, retail fraud and other areas.

A fraud investigator can either be part of a team of experienced investigators, or the leader of such a team. If part of a team, the fraud investigator generally works with the other team members to handle reports of suspicious activity. If in charge of a team, the fraud investigator would typically report to the head of a department, such as corporate security, compliance or audit. A fraud investigations manager at a typical retail business, for example, would be responsible for the day-to-day monitoring, investigation and resolution of fraudulent activity relating to delays in the repayment and refunds processes. They will take the lead on the implementation of strategies to prevent fraud and financial crime, thereby mitigating risk to the business.

Fraud Investigator Key Functions

Fraud investigators provide subject matter expertise on claims and associated fraud risks, helping to ensure effective resolution of investigations. The effective fraud investigator adheres to relevant security standards, internal and external procedures and legislative requirements. Their role often involves developing and maintaining close working relationships with relevant law enforcement agencies, ensuring that cases are developed and prosecuted to a criminal standard.

When working with an organisation in a preventative fashion, a fraud investigator will perform fraud risk assessments across the business relating to both external and internal threats; implementing mitigation measures as required. They also build appropriate fraud prevention and detection processes and implement them. Some fraud investigators manage the day-to-day operation of an expanding fraud team, ensuring that KPIs are met and regular reports produced for the management team. In this capacity, they will also work closely with the senior management team to ensure that operational capacity is correctly aligned to combat a variety of fraud types.

Here are some of the other key functions performed by fraud investigators:

  • Evaluate potential fraud indicators and the impact of current fraud trends and make recommendations as to appropriate mitigation.
  • Conducting investigations into allegations of fraud, waste or abuse committed by clients against our company
  • Reviewing and researching evidence/documents to analyse the overall fact pattern of a claim and synthesise data into a professional report with recommendations
  • Preparing and coordinating field assignments to obtain relevant evidence and information
  • Conduct objective, fair, thorough, unbiased and timely investigations into allegations of fraud, waste or abuse committed by clients against our company
  • Review and research evidence/documents to analyse the overall fact pattern of a claim and synthesise data into a professional report with recommendations
  • Prepare and coordinate field assignments to obtain relevant evidence and information
  • Coordinate with defence attorneys to provide deposition strategies and use law enforcement resources for assistance
  • Manage and prioritise a large and varied caseload effectively and efficiently to achieve positive results
  • Prepare prosecution packages and restitution proposals.

Responsibilities

As a fraud investigator often wears many different hats, they also have many ongoing responsibilities. These include monitoring transaction reports to identify any suspicious transactions and conducting detailed investigations as required. They must also proactively identify financial crime trends through data analysis and share findings with leadership as and when needed. A few other responsibilities of a fraud investigator include:

  • Working to a high standard, meeting strict time-frames whilst working under pressure.
  • Communicating directly with customers as part of ongoing fraud investigations through in-app messages or via telephony with potential victims of fraud to establish circumstances and additional information, before providing a fair and logical decision, with supporting rationale.
  • Work as part of a team and supporting colleagues as and when required to reduce workload(s).

Personality Traits of a Fraud Investigator

There are some common traits among the most successful fraud investigators. This includes being a self-starter who is results-driven with high levels of self-motivation, energy and initiative. An effective fraud investigator has a proven ability to work under pressure to and meet tight deadlines, without compromising the quality of output. One key trait that can’t be overlooked is the ability to be an effective communicator – a fraud investigator must have excellent written and verbal skills. Here are some other key traits among successful fraud investigators:

  • An ability to thrive under pressure amidst changing business priorities
  • Effective cost management and analytical integrity
  • Experience in leading and developing a team
  • Keen interest in stopping fraud whilst considering the impact of how an investigation can impact customers

Knowledge and Skills

A successful fraud investigator brings to the table a broad range of security/ fraud detection and prevention experience. A fraud investigator must be a subject matter expert on fraud for their related field, such as insurance fraud, financial fraud, procurement fraud, asset recovery, cyber fraud, healthcare fraud, retail fraud and other areas.

Many fraud investigators have specialised skills such as:

  • Experience of interviewing in accordance with the Police and Criminal Evidence Act following the PACE framework.
  • Strong knowledge of cyber risk and common fraud typologies, along with the emerging trends affecting fraud and financial crime.
  • Familiarity with key AML, TF, Financial Crime and Sanctions legislation and associated Regulatory Guidance.
  • Demonstrated experience working with customers on fraud prevention and detection strategies.
  • Sound understanding of the customer impact of a transaction monitoring system; able to balance fraud prevention with the need to provide an excellent customer experience.

As previously mentioned, an effective fraud investigator must have strong interpersonal and communication skills, including the ability to interact with clients, upper management and law enforcement. They also need to have an ingenuity and persistence to obtain case information not readily available with an eye for detail. Dealing with various different cases and different types of evidence requires strong organisational skills. For insurance fraud, investigators must be proficient with the insurance procedures, regulations and investigation methods

Perhaps most important, fraud investigators must set a positive example for their colleagues. They need to be honest and ethical, with high levels of integrity and confidentiality.

A fraud investigator has many different responsibilities, and the role requires an individual with some specific traits. CRI Group’s fraud investigators are experts at uncovering the facts and evidence of a case, but they also implement proactive anti-fraud measures to help an organisation be better protected against future incidence of fraud. Fraud investigators specialise in insurance fraud, financial fraud, procurement fraud, asset recovery, cyber fraud, healthcare fraud, retail fraud and other areas. It’s important that organisations hire trained, qualified fraud investigators who understand the laws, are effective at evidence collection and fact-finding, and are good communicators (since interviewing is one of the key processes of fraud investigation). A fraud investigator might work with a team, or they might lead their team and report to another division. Being able to work under pressure and meet deadlines is critically important. Properly evaluating and securing evidence is of equal importance. CRI Group has only the best expert fraud investigators to meet these challenges.

Are you a fraud investigator? Tell us about your day-to-day job, we would love to hear it.

 

Who is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

 

 

 

The Unseen Enemy: Insurance Fraud – Part I

This three-part series of articles examines the problem of insurance fraud, including its pervasiveness and general characteristics in the United States, the United Kingdom and the world. Insurance fraud is a widespread problem that requires real solutions and is often difficult to detect and combat.

Part One of the series, “What is Insurance Fraud,” provides an introduction to a topic that is important for any business leader, insurance professional, compliance agent or fraud investigator. Part Two, “How do Companies Detect Insurance Fraud,” details red flags of insurance fraud that help tip off investigators to possible illegal behaviour. Part Three, “Anatomy of an Insurance Fraud Investigation,” provides a look at case studies and reveals key tips for handling a successful investigation. To receive the next series subscribe to our monthly newsletter subscribe now!

Taken as a whole, this series is the perfect primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraudulent claims. It provides the tools and knowledge needed to effectively combat insurance fraud.

Insurance Fraud Consequences Around the World

Fraudulent claims costs an estimated $40 to $80 billion per year in the U.S. alone. According to Cifas, the UK’s leading fraud prevention service, members report a 27% rise in false insurance claims across the UK in the past year, with spikes in household and motor insurance. Cifas members also reported the following:

  • Household insurance fraudulent claims have increased by 52%, with claimants aged 31-40 the biggest culprits
  • motor insurance fraudulent claims have increased by 45%, with 21-30 year-olds making up the largest group
  • Fronting insurance is on the decline overall, however the share of millennials (21-30 year-olds) committing the offence increased by 18% in 2018.

Fraudulent claims are deliberately undetectable, therefore it’s hard to place an exact value on the money stolen. According to Alfred Manes’ “Insurance Crimes” in the Journal of Law and Criminology, the official number of cases does not correlate with the reality. The Coalition Against Insurance Fraud Annual Report estimates that a total of about $80 billion was lost in the US in 2006. 

  • Insurance Information Institute estimates that the insurance fraud accounts for about 10% of the property insurance industry’s incurred losses and loss adjustment expenses.
  • The National Health Care Anti-Fraud Association’s “The Problem of Health Care Fraud” estimates that 3% of the health care industry’s expenditures in the U.S. are due to fraudulent activities, amounting to a cost of about $51 billion.
  • David A. Hyman writes in “Health Care Fraud and Abuse” estimates that 10% of the total healthcare spending in the US to fraud—about $115 billion annually. 

Consider these statistics:

  • According to Federal Bureau of Investigation’s “FBI — Insurance Fraud,” non-health insurance fraud costs an estimated $40 billion per year – consequently this increases the premiums for the average U.S. family between $400 and $700 annually. 
  • J.E. Smith’s book “The Trillion Dollar Insurance Crook” puts the true cost fraud committed in the US at 33% to 38% of the total cash flow through the system
  • In the UK, the Insurance Fraud Bureau estimates that the loss due to insurance fraud is about £1.5 billion ($3.08 billion), causing a 5% increase in insurance premiums
  • Insurance Bureau of Canada “Cost of Personal Injury Fraud” estimates that personal injury fraud costs about C$500 million annually.
  • “Indiaforensic Study on quantification of fraud losses to Indian Insurance Sector” estimates that Insurance frauds in India costs about $6.25 billion annually.

Part One: What is Insurance Fraud?

It’s been called an epidemic and is a scourge of insurance providers, private companies and consumers alike. But what is it, how do companies detect it, and how does an insurance fraud investigator unravel it? In this part one of a three-part series, we will address the first question: What is insurance fraud?

Most of us deal with insurance in various forms throughout our lives. It’s a necessity in some cases through which we pay regular premiums in order to be protected from damages or liability from an unknown future event, such as an accident or illness. For large corporations, insurance can be worth millions, covering things like product liability, workers’ compensation, business interruption and other serious risks. It’s also rife for fraudsters, who often live by the well-known maxim, “follow the money.”

Don’t have time to read the rest?

Taken as a whole, this ebook is the perfect primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraud claims. It provides the tools and knowledge needed to effectively combat insurance fraud.

Download your Insurance Fraud Investigations FREE ebook here!

Every type of insurance is vulnerable to insurance fraud. This type of cases can be committed by opportunists – consider claim fraud, where perpetrators invent or exaggerate a claim; or application fraud, where they deliberately or recklessly provide false information when applying for insurance. There are well-known fraudulent insurance claim cases of highly organised criminal gangs with money-making enterprises based on motor-vehicle fraud or health care fraud, for example. But fraud can happen at any point along the process of an insurance claim, by insurance applicants, members/policyholders, third-party claimants or others (including professionals who specialise in pursuing claims for policyholders).

Fraudulent claim cases also cover a wide range of schemes and crimes. The following are some of the most common types of fraud involving the insurance industry, according to the ACFE’s “Insurance Fraud Handbook”:

  • Agent and broker schemes
  • Underwriting irregularities
  • Vehicle insurance schemes
  • Property schemes
  • Life insurance schemes
  • Liability schemes
  • Health insurance schemes
  • Worker’s compensation schemes

Fraudsters find new ways to pull off their scams, from simply falsifying claims to engaging in mail fraud, identity theft, and forgery, they will make it happen. For example, when looking at just motor vehicle-related fraudulent claims, the types of schemes include the following:

  • Vehicle dumping or destroying
  • False registration
  • Exaggerated repair costs after a car accident
  • Faulty airbag replacement
  • Faulty windshield replacement

All of the above is intended to enrich the fraudsters at the expense of insurance providers, and, in some cases, other innocent victims. People have even been injured in schemes that involved faked traffic accidents for the purpose of insurance fraud.

Who is Involved?

Often committed by someone directly connected to the insurance policy. This includes the policyholder, applicant and their beneficiaries. However, insurance insiders – i.e. brokers and agents- as well as gatekeepers – i.e. lawyers and accountants, could be behind the scheme. They collude with the policyholder in exchange for a portion of the profits or victimize the policyholder for their own gain. Examples include:

  • A doctor submitting improper medical coding to receive a higher payment than they are entitled to.
  • A mechanic fabricating a bill for more repairs than the car required after an accident.
  • A private investigator not really doing the investigation on fraudulent behaviour.
  • An attorney was helping a claimant fabricate a story about how they hurt themselves on the job so they can receive worker’s compensation.

When times are tough for them financially, people are more likely to commit insurance fraud. You can sometimes discover opportunistic fraud by interviewing the alleged fraudster’s friends or neighbours about their financial situation.

Case Study: The ‘Phantom Collision’ Ring

In 2014 in Los Angeles, a ring of over a dozen insurance fraudsters was busted for fraudulent collision claims. The perpetrators of the frauds recruited family members and friends to help orchestrate fake accidents, ultimately stealing more than $300,000 from auto insurance companies before they were caught.

In some cases, the collisions didn’t even happen at all. All it took were willing participants to make claims in coordination with repair and auto body shops to make the fraudulent claims. In the end, fraud investigators were able to detect a pattern to their claims, helping them unravel the scheme.

The case is reminiscent of a similar instance that made shocking headlines in 1996 when an organised crime ring (also in L.A.) made up of six perpetrators netted a jaw-dropping $20 million in phoney claims. When they were caught, it was discovered that they had staged more than 100 fake accidents, filing $10,000 to $20,000 in claims per incident. For many people who read about the case in the newspapers, it was their first exposure to something of this magnitude, whereas they had previously thought of insurance fraud cases as “one-off” crimes of opportunity.

Case Study: Doctors, Clinics Get in on Insurance Fraud in New York

Healthcare fraud is another area that is susceptible to major fraud conspiracies. Last year in New York City, more than 20 people and more than a dozen corporations were charged in a massive scheme to defraud Medicaid, Medicare and other insurance providers. The operation was so sophisticated; it allegedly involved “office staff, recruiters, managers, billers and money launderers.”

As is common with such cases, the fraudsters targeted poor and vulnerable people to help them execute the fraud. They went into low-income areas and in some cases approached homeless people, offering them cash ($30 to $40) in exchange for them going into clinics that were in on the scheme and ordering unnecessary tests. In many cases, the tests weren’t even performed, and the “patients” didn’t even have a consultation with a doctor.

The massive fraud included doctors and utilised shell companies to help launder the millions of dollars that were processed by the perpetrators. The case, with 878 indictments, is still in the court system.

The Ten Most Common Types of Insurance Fraud

In case you think that fraud is limited to automobiles and healthcare, consider all of the types of insurance that are available – and know that all of them are susceptible to fraud. In fact, investigators from Business Insurance have provided a list titled “10 Most Common Types of Insurance Fraud.” These cases even include staged home fires and faked deaths: 

  1. Stolen car
  2. Car accident
  3. Car damage
  4. Health insurance billing fraud
  5. Unnecessary medical procedures
  6. Staged home fires
  7. Storm fraud
  8. Abandoned house fire
  9. Faked death
  10. Renter’s insurance

Investigating Insurance Fraudulent Claims are Best Left to the Experts

With the enormous liability presented by insurance fraud, every organisation should address the risk in their due diligence and fraud prevention programs. The best way to do that is to bring in the experts at CRI Group to help implement this as part of a risk management plan.

When fraud is detected, CRI Group’s investigations cover the full range of fraudulent claim cases, from health care fraud to disability and even fake death claims. CRI Group’s thoroughly trained experts are trained, for example, to look for the tell-tale signs of fraud carefully reviewing claims, medical and hospital records, conducting interviews, examining statements and documents and performing on-site inspections.

In Part Two, we will examine some of the tell-tale signs and red flags of fraudulent claims, and how insurance fraud investigation companies can have a better chance of detecting it before it causes irreparable damage. Like many criminal schemes, this type of cases are often well-hidden – the key is knowing what to look for.

Do you want to read the next series now? Not a problem, this three-part series of articles is part of our “The Unseen Enemy: Insurance Fraud” ebook with actionable advise on how to protect your business and much more. Download the FREE ebook here!

 

 

 

 

 

 

Who Is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301:2021 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

 

 

Responsible management and CEOs

As of 13 August 2020, COVID-19 has affected more than million people globally, including 744,385 deaths, reported to WHO. The virus has also had severe economic implications, leaving organisations facing a unique set of new challenges that can only be summed up in one word: uncertainty. And the only way to navigate these uncertain times is through leadership. This is critical right now, as COVID-19 has magnified societal vulnerabilities. Good leaders can and should lead society into a new “normal”. However when Harvard economist Greg Mankiw argued in a New York Times opinion piece that CEOs are qualified to make profits, not lead society this is somewhat inadequate to the times we live in now. Furthermore, Doug Sundheim, contributor at Forbes, has argued in his article “CEOs Have A Responsibility To Help Lead Society” that Greg’sc arguments just simply do not fit today’s business models. This “shareholder-first business model” originated from 1970, however 50 years on a lot has changed and at a time when over 70% of the largest entities on earth are corporations, not nations, Mankiw’s view is troubling. 

The sheer number of corporations around the world should make us understand that business impacts societies on a global scale; therefore, business leaders have the responsibility to at least consider those societies and how they impact them. The singular management goal of CEOs is no longer about maximizing returns to shareholders, but to support society as business has grown more interconnected and complex. Today, business and society are weaved together in an intricate way, both depending on the other for stability and success. 

The COVID-19 pandemic has also changed businesses and created a surge in the number of positive collaborations between companies, institutions and governments. Our article “COVID-19 prompted innovative leadership” reflects how Mankiw fails to grasp the world in which CEOs are now in fact leading communities and helping societies.

Mankiw asks the reader to imagine having to make an executive decision and how effective and simplier it is when your only priority is profits, and not the wider set of stakeholders – i.e., employees, suppliers, communities, and shareholders. Mankiw defends the idea that corporate management’s mandate should be the narrow self-interest of achieving greater profits for shareholders, not broad social welfare. He goes on to list several additional hypothetical questions. A social-driven leader would have to consider:

  • How do you weigh those losses against the gains to the would-be workers at the new plant?
  • How much will the closure of the old plant hurt its workers and their community?
  • Does it matter whether the new plant is in South Carolina, providing jobs for American workers, or in Mexico, providing jobs for Mexican workers?
  • How should you weigh the benefit of electric cars in mitigating climate change? 
  • How should you balance these concerns against the interests of shareholders, who entrusted you to invest their savings?

However, the above questions are now part of the many new demands from consumers, talent and governments. 

Consumers have changed; they are no longer only interested in the end product. Consumers are demanding more from companies for their buy-in. And every corporate leader has to include some version of the above questions in their considerations if they want to succeed. Top CEOs say social responsibility should be prioritised over profits proving that social responsibility planning; it’s officially basic business planning. Last year the bosses of 181 Leading US’s biggest companies dropped the shareholder-first principle – they changed the official definition of “the purpose of a corporation” (from making the most money possible for shareholders) to “improving our society.”

Most successful CEOs and corporate leaders have profit in mind, and they always will; but they are also considering the needs of a variety of stakeholders, including the communities they impact. In this day and age, CEOs and corporate leaders are rising up to social expectations and are balancing the demands of multiple stakeholders.

Mankiw questioned CEOs’ and corporate leaders’ ability to be broadly competent social planners.  Paul Polman (former Unilever CEO) talks about creating collective courage. He rightly argues that it’s difficult for one industry player to impact an issue like reducing greenhouse gases because of the loss of competitiveness. However, if 20% of industry players come together, they can begin tipping the scales.  It’s starting to happen. In this way, by unifying their efforts, corporations, governmental agencies, and NGOs can partner to lead society.

CEOs and other leaders now find themselves in a changed world … they can and should play a variety of leadership roles that move beyond narrow profit maximization. This is a social responsibility, not broad social planning. Short-term earnings no longer feature in the top of the mission statement for most successful companies. We’re starting to find our way back to a more balanced view, and we need CEOs’ leadership in the process.

Mankiw admits that the world needs people to look out for the broad well-being of society – elected leaders who are competent and trustworthy – but those people are not CEOs. However, Mankiw fails to acknowledge just how much influence CEOs and corporate leaders have over our elected officials and the legislative process. Today, large corporations and their associations outspend labour and public interest groups 34 to 1 on lobbying efforts in the US.

In today’s high-risk environment, businesses have to pay attention to their social and environmental roles not only due to demand, but out of responsibility for the damage they (can) cause. For example, companies that contribute to, but then deny, climate change – the attorneys general of several American states launched investigations into ExxonMobil and whether they had committed fraud by sowing doubts about climate change – even as its own scientists knew it was taking place to firms involved in botched Grenfell Tower revamp refusing to accept responsibility for tragedy. Then there is Chamath Palihapitiya, former Facebook executive, who expressed regret for his part in building tools that destroy ‘the social fabric of how society works’. Companies are responsible for causing great damage on a human scale. We have to hold companies, CEOs and brands accountable for their destructive impact in today’s society; while they have a responsibility to support and help lead society.

CEOs and corporate leaders are exerting immense influence behind the scenes; therefore, qualified CEOs and corporate leaders should step up and help lead on the thorny economic issues of the day. However, with great power comes great social responsibility. Not all of the corporate leaders are equipped to lead societies; therefore, they should take a significant weight off the scale. Contrary to what Mankiw and others of his mindset might think, we must continue to demand more from our corporations, their boards, and their CEOs and leaders. Corporate leaders can make a unique and lasting positive impact, too.[/vc_column_text][/vc_column][/vc_row][vc_section][vc_row_inner][vc_column_inner][accordion_father][accordion_son clr=”#ffffff” bgclr=”#1e73be” title=”About CRI Group”]Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][accordion_son clr=”#ffffff” bgclr=”#1e73be” title=”Sources & Credits”]

The original version of this article appears in Forbes with the headline: “CEOs Have A Responsibility To Help Lead Society”, by Doug Sundheim. Any other resources and credits are currently embedded in the article.

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HAVE YOU READ?

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FTC guide for small business to avoid Scams

Federal Trade Commission (FTC) has released a guide for small business.
Scams & Your Small Business guide is part of FTC’s efforts to help small business owners to avoid scams.

If you are a small business owner or are part of a non-profit organisation, you spend a time and energy on making sure your organisation works well. But when scammers go after your business, it can hurt your reputation and your bottom line. The guide explains common scams that target small businesses, describes scammers’ tactics, and provides steps that you can take to protect your business from scams. Tell your employees and colleagues what to look for so they can avoid scams.

Scams & Your Small Business guide can be your best protection against scammers. Check out the guide here!

 

Speak up against scams

Report any illegal, unethical, or improper behaviour. Our Ethics and Compliance Hotline is an anonymous reporting mechanism that facilitates reporting of possible illegal, unethical, or improper conduct when the normal channels of communication have proven ineffective, or are impractical under the circumstances.

At CRI Group, we are committed to having an open dialogue on ethical dilemmas regardless. This hotline is available to all employees, as well as clients, contractors, vendors and others in a business relationship with CRI Group and ABAC Group.

Compliance Hotline is accessible by both phone and online. If you make a report directly by telephone, you will speak with the Compliance Department directly. If you submit a report online, the system will guide you through the reporting process, and a PIN number will be generated automatically once you complete the report.

 

 

Who is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

7 Traits of a Resilient Leader

Every successful leader has encountered a challenging scenario at some point in their career. The unprecedented COVID-19 pandemic, however, has forced leaders to face unforeseen new challenges. With the pandemic’s colossal impact on operations, workforces, profits and supply chains across the globe, all eyes are on leadership to guide their businesses through this crisis. Resilient Leader

Resilient leaders are generally seen as more effective, making them an asset to any business; but what is resilience and how can it be applied to your management skills?

What is Resilience?

Resilience is the capacity to recover quickly from difficulties; it is a further evolution of stress management. This makes it a “no brainer” as to why resilience is such a popular concept in today’s business environment. Many businesses are pushing the concept of resilience as a way of helping workers better cope with the stresses and strains of the modern-day office and unlock their performance potential.

In this article, we look at seven essential qualities that characterise resilient leaders, and how to increase your resilience. In general, resilient leaders:

  1. Show empathy
  2. Are adaptable and able to improvise
  3. Are self-aware and open to feedback
  4. Take calculated risks
  5. Keep a positive attitude
  6. Develop others
  7. Communicate effectively

1. Resilient Leaders Show Empathy

COVID-19 has generated one of the greatest challenges and, simultaneously, one of the greatest opportunities for resilient leaders – at all levels. According to a Gallup U.S poll, six in 10 people are “very” or “somewhat worried” that they or a family member will be exposed to COVID-19 (Gallup, 2020). During this crisis, emotional management is even more crucial than ever. According to studies carried out by Development Dimensions International (DDI), empathy is the most critical leadership skill. Leaders who display compassion, authenticity and vulnerability – and are capable of apologising when they’re wrong and handle criticism without blame – create strong emotional bonds with their teams (DDI, 2020).

The most resilient (and effective) leaders can demonstrate empathy and a high level of emotional intelligence. When your team feels understood, they feel more motivated and more confident to contribute cultivating stronger conversations, ideas and debate. As Mark Cuban shared in a recent interview: “How you treat your employees today will have more impact on your brand in future years than any amount of advertising, any amount of anything you literally could do” (Just Capital, 2020).

2. Resilient Leaders Are Adaptable

With COVID-19 infecting approximately 311,641 people in the UK alone, health officials suggested using hand sanitiser as the easiest way to prevent the spread of the disease. Consequently, these announcements led to panic buying (Euronews, 2020). In this type of situation, a resilient leader should be able to visualise this action as an opportunity – for example, dozens of spirit manufacturers across the UK started to produce hand sanitisers (i.e. BrewDog and Leith Gin). This is a classic example of an instant attitude adjustment – looking at what they can do as opposed to what they can’t (Telegraph, 2020).

When faced with change, resilient leaders can focus on the things within their business that they can still control. Whether impacted by new technologies, environmental challenges or even ethical dilemmas, the modern business landscape is always changing. A resilient leader needs to be flexible and adaptable to succeed. Is flexibility part of your leadership style?

3. Resilient Leaders Are Self-Aware and Coachable

According to Health Care Business Today, self-awareness and coachability are “The Two Most Important Leadership Traits” (Health Care Business Today, 2019). We think so, too. Resilient leaders are self-aware, confident, and most of all, able to recognise their strengths and overcome their weaknesses. Resilient leaders are open to feedback, ask for feedback and are always demonstrating a real effort to improve.

4. Resilient Leaders Take Calculated Risks

Successful leaders earned their success through taking calculated risks. When Amazon CEO Jeff Bezos launched AmazonFresh, he was scrutinised by others because he didn’t choose a successful delivery or supermarket executive to run the venture. Instead, Bezos selected a team that had previously run a web-based food delivery service in the ‘90s (which collapsed after two years in business). Why? Bezos knew that the team had learned from their failure, which made them the perfect choice to succeed with a new project.

Resilient leaders like Bezos take calculated risks while accepting that failure is a by-product of innovation and success. They learn to become comfortable with being uncomfortable, and flourish as the world changes around them.

5. Resilient Leaders Can Keep a Positive Mindset

The impact of COVID-19 is tough to manage. It is vital to have a positive mindset that can influence fellow professionals and raise team morale while maintaining business momentum.

Under the challenging circumstances posed by the COVID-19 crisis, a resilient leader needs to be enthusiastic, offer praise for success, and give credit when it’s due. American psychologist Carol Dweck has stated in her book “Mindset: The New Psychology of Success” that “a change of mindset must happen before other positive transformation can occur.”

Resiliency is needed when we encounter failure. As a resilient leader, you shouldn’t view failure as final, but as a necessary step to move further along your journey.

6. Resilient Leaders Develop Others

The most resilient leaders are concerned about the development of their teams. Developing others helps everyone to learn from their mistakes. We continue to find that leaders who want and accept honest feedback for themselves are more likely to give productive feedback and coaching to others.

7. Resilient Leaders Communicate Effectively

Effective communication helps teams understand changes, expectations and new directions. This understanding is the key to the success of any team. The most resilient and best leaders always communicate their intentions effectively to others and are willing to help their teams understand a new strategy or direction.

The COVID-19 pandemic is proving to be the ultimate test for business leadership. In times of crisis, only certain individuals can adapt and stand tall amongst the crowd. When it comes to leaders, being able to implement resilience tools and strategies will not only make you a better leader but help the company overall.

 

Who is CRI Group?

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301:2021 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

COVID19 increases identity theft cases: 7 steps to lessen your risk

What does an embezzler spend their money on? In the case of a New York man’s alleged fraud, just about everything, apparently. According to IDentutyUSA identity theft is on the rise during COVID-19 pandemic. Experts predict that one out of every four people in the United States will be a victim of this growing crime trend as more people work from home because of COVID-19.  While data from Experian and the National Hunter Fraud Prevention Service shows that fraud rate rises 33% during Covid-19 lockdown. As many as 1 in 10 people are now victims of identity fraud annually, with 21% of these individuals having been victimized multiple times.

When fraud investigators are asked what is the biggest fraud risk to the public at large, identity theft is usually at or near the top of the list. In today’s technologically connected world, criminals can get personal identifying information on countless unsuspecting individuals with just a few keystrokes.

At CRI Group, our experts have investigated their fair share of identity theft cases, and while they can be very damaging, there is good news – many could have been avoided (and can be avoided in the future) with some proper due diligence. With that in mind, here are some important tips to help lessen the chances of becoming a victim of this insidious fraud:

1. (If/When out) Be careful using public wifi

When using the wifi at a coffee shop, Internet café or any other public place, don’t access bank account information or other sensitive information. Your data is vulnerable to those looking to steal it.

2. Update your passwords regularly

Change your passwords and vary them among different accounts. Password managers like LastPass can help you keep track of them.

3. Don’t become a victim of phishing

Be very skeptical of unsolicited emails or website pop-ups that pose as legitimate sites (like those pretending to be a bank, a delivery service, or the IRS, for example) and ask you for personal identifying information, or financial particulars. Don’t follow links or click on attachments for any of these unconfirmed emails or sites.

4. Consider going paperless

Identity thieves can still get your information the old-fashioned way: by intercepting your mail, going through your trash or finding other ways to get bills, invoices or receipts. Shred documents that you do have and don’t need, and opt to go paperless (requesting electronic documents only) as often as possible.

5. Check your bank and credit card statements

If someone is using your existing accounts, you’ll want to know as quickly as possible so that your bank can be alerted and take the proper measures.

6. Watch for fraud alerts

Most banks will now proactively alert their customers when they see suspicious transactions. If this is an optional service, opt-in – it’s better to be safe than sorry. Then you can confirm whether the transaction is actually fraudulent or not.

7. Monitor your credit history

Credit reports can help you know if any new lines of credit have been fraudulently opened in your name. Services include Experian, Equifax, TransUnion, and Callcredit, and in the U.S., you are able to receive your credit report once a year at no charge.

Identity theft is a serious problem, and it’s not going away anytime soon. But it’s good to know that there are some common-sense precautions we can all take to lessen our chances of having our information stolen.

If you do become the victim of ID theft, or believe your information may have been compromised, there are resources to help you deal with the crisis.

In the U.S., you can visit IdentityTheft.gov. This official U.S. government website invites users to report if they have been victims of identity theft. Based on the information they provide, victims are assisted with a personalised recovery plan, and can receive step-by-step instructions on how to proceed and navigate the sometimes murky and complicated world of untangling identity theft.

In the UK, ActionFraud National Fraud & Cyber Crime Reporting Centre provides tips, advice and a reporting system as your first point of contact if you have been a victim of fraud.

Many other countries and jurisdictions provide similar services. If you are a victim of identity theft, rest assured you are not alone. It is one of the most common frauds around the world, but with a little preventative action, we can lessen its incidence and its impact.

Identity theft is a persistent problem in business, but it doesn’t have to be a crisis at your company. By using a common sense approach and some key prevention strategies, you can help ensure that your employees know the rules and are less likely to be victims. For assistance in developing and implementing a fraud prevention strategy, contact us today or get a FREE QUOTE now!

Speak up – report any illegal, unethical, or improper behaviour

Ethics & Compliance Hotline is an anonymous reporting mechanism that facilitates reporting of possible illegal, unethical, or improper conduct when the normal channels of communication have proven ineffective, or are impractical under the circumstances. At CRI Group, we are committed to having an open dialogue on ethical dilemmas regardless.

CRI Group has safeguarded businesses from any risks, providing investigations (i.e. insurance fraud), employee background screening, investigative due diligence, business intelligencethird-party risk management, forensic accounting, compliance and other professional investigative research services. In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. Contact ABAC® for more on ISO Certification and training.