Keys to Fraud Detection and Prevention

Providing consumer rebates is a longstanding part of a channel marketing incentive program. Unfortunately, there’s a cottage industry of sorts that resides within the underbelly of the dark web that provides consumers and organizations with the means to submit fraudulent rebate claims for products and services they never purchase.

 

For channel marketing providers, ensuring the rebate programs they administer on behalf of their clients’ brands include robust fraud detection capabilities is a critical component of their incentives offering. Having resources who know how to identify fraudulent rebate activity, the ability to operationalize fraud detection and prevention, as well as leveraging people and technologies to combat rebate fraud are keys to its detection and prevention.

 

Digging Deeper

What happens when the same voice shows up on calls inquiring about rebates for 20 different names or you receive multiple submissions with only slight changes in names, such as one or two letters being changed?  What about rebate submissions that used stock images instead of actual installed product photos or 60 submissions from one town in Alaska on the same day? For the Channel Fusion Incentives team, it was readily apparent there was something amiss for a specific brand and the team started digging deeper, creating the foundation for what would be a formalized, repeatable fraud detection program within the Incentives team.

That initial effort several years ago included frequent visits to the dark web to research and capture what criminals were discussing and the tools they were sharing to create fake rebate claims. When the team saw more than two submissions from the same location, for example, they were flagged for potential fraud. Similarly, when there were multiple sequential or near sequential submissions from the same city and state, as well as the same retailer or dealer, those claims were flagged for additional analysis.

 

For one rebate program, the results were significant. Nearly $200,000 in fraudulent claims were flagged as potential fraud and, more importantly, denied once confirmed as fraudulent.

 

Operationalize the Effort

Today, fraud detection is operationalized within the Channel Fusion Incentives team. The company’s auditing and support teams are trained to identify potential fraud patterns and alert account management team members if exceptions are being requested when patterns are present. The team’s continuous improvement efforts include documentation of best practices and the ongoing creation and maintenance of internal tools for fraud detection and prevention.

 

One of the best practices established by the team includes regular phishing expeditions. The team routinely skims information on various fraud scam sites on the dark web, reviews posts about new trends for rebate scams and looks for written posts that talk about workarounds to the latest fraud detection techniques being used on behalf of Channel Fusion clients.

 

Marry with Technology

While having team members that are passionate about digging deep within the dark web to ensure the operational components of the fraud detection and prevention program stay ahead of the scammers, combining these efforts with technologies within the Channel Fusion product offering have allowed the incentives team to scale the program and minimize ongoing rebate fraud. To that end, the Channel Fusion Tech Solutions Lab team developed and implemented an automated audit module within the company’s rebate platform. This includes functionality that identifies fraud techniques in the submission process and alerts the incentive team for further analysis.

 

The platform programmatically looks for patterns to help detect fraud. The pattern detection was initially done manually when the Incentives team first started digging into the dark web early on, including looking for the same customer, city and state on multiple rebate submissions.

 

These programmatic capabilities are married with manual detection efforts like looking for similar or identical verbiage on multiple emails or identifying submitter information that does not match the email address from which it is coming.

 

Unfortunately, rebate fraud is big business on the dark web. Ensuring fraud detection and prevention is part of a channel marketing provider’s incentives management offering is important for any brand using rebates to drive more sales. With resources in place who know how to identify fraud and a formalized program established on operational best practices, along with programmatically supporting fraud detection at the product or platform level, brands can rest easier knowing every possible effort is being made to eliminate fraud and ensure they are maximizing ROI in their program.

 

Is your current incentives program detecting and preventing fraud? Find out. Schedule a review of your program today! Click the Schedule a Review link below, complete the form, and copy and paste “I’d like a fraud detection review” in the Other Inquiry section of the form.