Fraud is in Your Backyard

Each day, there are multiple news stories about fraud. Some share details about fraud committed against government entities or agencies, some tell us about instances in our educational institutions, and still, others describe the types of fraud against individuals in the form of identity theft. In the post-pandemic United States, fraud has increased in the public sector because our government has made benefits more accessible to those in need. Unfortunately, bad actors are using system and process vulnerabilities within the benefits programs as an opportunity to steal. 

Believe it or not, most instances of fraud come from nation-states and organized crime rings. These crime syndicates are particularly dangerous because they spend significant time cultivating the best ways to commit fraud against our government and educational institutions at scale — often committing hundreds or even thousands of fraudulent claims or transactions at a time.

Fraud happens when cybersecurity fails, and it’s not a victimless crime. Fraud costs everyone as we see the cost of goods rising, limited budgets for government services and programs, or in some cases, tax increases when fraud depletes available government funds. Fraudulent transactions, phishing scams that aim to steal personal information such as bank account or credit card information, Medicaid and Medicare fraud, fraudulent invoicing or purchase orders, and unemployment fraud are frequently making the headlines. 

Unemployment fraud is one type of fraud that has increased exponentially. Fraudulent claims in the United States increased to $45.6 billion in 2022, up from $16 billion in 2021. Since the pandemic, the Federal Office of the Inspector General has opened more than 190,000 cases concerning unemployment fraud. Fraudsters attempt to use data from other people, children, and adults — both living and dead — or hope that a state’s unemployment system will not detect fake or synthetic identities. 

In higher education, there has also been an increase in fraud, which can damage an educational institution’s reputation. Recent examples include the issuance of fake purchase orders issued to fictitious vendors or electronic equipment purchases that were then diverted to the employee who issued the purchase order. These types of fraud went on for years before detection.

What Types of Fraud Should an Organization Be Concerned With?

There are two types of fraud impacting organizations: external and internal fraud. External sources of fraud include transaction fraud, money laundering, theft of benefits, account takeover, payment card theft, and misuse of disaster and emergency relief payments. Internal sources include bid rigging, payroll fraud, and overtime scams from trusted employees. Both types of fraud are increasing in our country. 

Fraud occurs when a bad actor intentionally misrepresents the truth to steal money from an organization and is often challenging to detect because fraudsters work tirelessly to hide and commit crimes without notice. These actions can go unnoticed for long periods due to aging systems and the acceleration of online transactions, including the adoption of digital payments.  While it’s widely thought that bad actors come from outside of our organizations or other countries, they are increasingly found within our organizations and have access to protected information on our networks. 

Capabilities

You may know Splunk, the data analytics platform, for its ability to secure an organization’s assets for cybersecurity initiatives or adhere to compliance frameworks. Splunk’s core ability is to use data, regardless of the source or structure, to detect patterns, trends, and anomalies that would be impossible for one person or even an entire team. Splunk uses a time-series index to store data from multiple systems to analyze and create insights, giving customers the ability to see what is happening in their environment in real-time. Splunk can take data from any structured or unstructured source and normalize it, making it easier to make data-driven decisions with certainty.

Proactive Approach

At Splunk, we turn your data into action to help you identify and stop fraud, regardless of where it emanates. The sheer quantity and breadth of data common to a modern investigation can be overwhelming, especially if the data analysis is across different tools or includes manual processes. Splunk provides a centralized platform to correlate data, perform advanced analytics from various data sources, and apply built-in advanced analytics to identify unusual behaviors or anomalies quickly. We use a combination of queries to aggregate risk-weighted factors to identify potential fraudulent activities and present teams with easy-to-use dashboards to determine where additional investigation is warranted.

Fraud investigations are collaborative efforts, and everyone on the team plays an important role. Having a comprehensive view of the data for all participants can reduce the time to reach conclusions from days or weeks to minutes. Splunk can support your mission by removing the barriers between data and action. The ultimate goal of fraud detection is to provide resilience within your organization and to stop fraud in its tracks.

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