Analytics Magazine Analytics Magazine, November/December 2014 - Page 42

figh tin g frau d Screen shots of the AlixPartners “World Platform” anti-corruption toolset (above and page 43). during an economic downturn. These are the sinister schemes one can’t even imagine are happening because no one knows to look for them. Once they are uncovered and observed, their patterns can be “built into” rules-engines within a few days or weeks. Change from Reactive to Proactive Fraud prevention efforts are primarily spurred by reactive investigations and penalties. Few companies truly engage in proactive fraud monitoring. The majority of thought leadership in proactive monitoring has emerged from the financial services space. With millions of dollars (or more) at risk at the click of 42 | a n a ly t i c s - m a g a z i n e . o r g a mouse button, financial services companies have a clear incentive to actively monitor for fraud. One area that industry is monitoring is “bust-out” fraud, or first-party fraud in which the thief applies for a line of credit (credit card, etc.), behaves well, increases the credit line and then disappears, leaving a large balance delinquent. This type of scheme is estimated to cost more than $1.5 billion a year in losses, according to Credit Risk International. A recent bust-out fraud cost Southern California banks at least $15 million. That scheme involved 15 people, is alleged to have started in February 2010 and ran until October 2013. According to the FBI, it included: w w w. i n f o r m s . o r g