Executive Fraud Blog

I recently came up with an idea to change the focus of this site to be an open source fraud software development project and it got me looking around at what is already out there. Risk IDS provides fraud prevention software specifically related to credit card fraud and other banking related transactions.

"Risk IDS is for prevention of fraud within, although not limited to, credit card companies, retail banks and financial service organizations. The system is unique as it binds together all of the duplication that exists within the management of all fraud types. The interaction is via a workflow system, which reduces the need for training of bank staff and increases audit. It can integrate with other systems thus reducing duplication further. Analysts write their own rules and workflows using a GUI. The system is multi language for many sites whilestoring information in a central database for all customer products."

"Authorities say Porcelli defrauded or tried to dupe at least 165,000 Americans, many with poor credit histories."

Looks like this guy was busy, amazing that he was able to scam that many people without getting caught much sooner. Credit card fraud monitoring is crucial to minimizing losses to victims. It can be as simple as monitoring your balance online in order to identify fraudulent charges proactively.

Student loan fraud has been investigated in the relationships between universities and large financial banks. The cause for concern is that certain universities have been accused of exclusively directing their students to lenders in exchange for revenue sharing opportunities or extravagent gifts related to their role in giving students higher rate loans. From a review of college arrangements with banks done by the St. Petersburg Times explains the following relationships:

- At Florida State University, the financial aid director sits on the advisory board of preferred lender Student Loan Xpress, which has seen nearly half of its board members suspended by their schools recently for allegedly accepting hefty consulting fees or owning stock.

- With thousands of competing lenders to choose from, Florida A&M University students were, until recently, directed to use one of two lenders based on the spelling of their last name.

- The Stetson University Law School financial aid director sits on the advisory board of a preferred lender that last year controlled 70 percent of the school's $31-million loan business. Now, officials say they will no longer accept free travel and lodging if the director attends further meetings.

The lenders and campus officials that are recently under the most criticism include:

FSU financial aid director Darryl Marshall has served for five years on that company's advisory board, and said he has accepted reimbursement for travel and lodging to attend three meetings.

Six other members of that board - including financial aid directors at the University of Texas, Columbia University and Johns Hopkins University - have been suspended by their schools for allegedly holding up to $100, 000 in stock or accepting fees of up to $80, 000 from the company.

Marshall said he was also reimbursed for two trips as an advisory board member for USA Funds, the nation's largest loan guarantor, and one trip for Elm Resources, a nonprofit run by lenders.

Student Loan Xpress is one of 11 preferred lenders at FSU. Last year, it did more business there - $27-million worth, in the form of more than 9, 000 federally backed loans - than any campus in the nation but one, according to federal reports compiled by the Student Marketmeasure data service.

These student loan fraud schemes seem to be very easy to conceal for these universities because they can claim to be only providing a convenience for their students but they should be held accountable for vouching for the their preferred lender. As the investigations continue it is likely that other fraud schemes will be uncovered.

Banks around the country have been faced with larger instances of credit card fraud while victims are often times left to foot the bill. On the chance that you are protected under your coverage it is often the case that banks are unable to reveal the source of the fraud. Their response is often that they must remain silent because there is currently a police investigation of that particular location/person. It seems to reason though if card holders where told where they were being defrauded from they would consider avoiding credit card use while in those areas. There seems to be a disconnect between stopping the credit card fraud and providing consumers with enough information to properly handle fraud prevention.

The #1 online complaint is auction fraud
This fraud accounts for over half the complaints that are made to the FBI's Internet Crime Complaint Center. Other common complaints include credit card fraud, spam, and non delivery of goods. The most costly internet scheme right now is the Nigerian spam letter that has several different variations that all promise you free money for cashing "real" money orders that clear your bank account prior to them actually clearing the issuing bank which eventually declares the money order as fraudulent. The best protection from these attacks is to understand nothing every comes for free and no one legitimate will ever ask you for sensitive information via email (ie. credit card number)

In regards to eliminating auction fraud, consumers are best apt to doing this by using secured forms of payment such as paypal or feedback oriented auctions such as ebay/amazon. Most services guarantee the delivery of your goods and your payment up to certain amounts so make sure to check your protection limits against fraud.