One of the most common questions people ask us in the Risk and Compliance department (RAC) is something along the lines of “what are people trying to get away with these days?” Naturally, we assume the best and most issues that pop up in our claims auditing have to do with honest mistakes such as keystroke errors etc. But, we DO audit 100% of all the claims we process and here are the three trends we’re seeing from “Sneaky Pete” and his buddies…
1. (With a Bullet!) – Recurring Invoice Number
As technology becomes more accessible to everyone, this type of fraud becomes more sophisticated and more prevalent. Typically we see a recycling of the same invoice with some minor changes in the form of added spaces or dashes. A claim is made during Q2, for example using the original sale and within the parameters of the program. The fraud will occur when a subsequent program features the same models as the first one – the invoice is all correct and a quick switch of the sales date with the same invoice number allows them to submit the sale again, hoping to receive an incentive. Except, we catch them and they don’t get paid.
2. Altered Invoices
This is a sort of variation on the above tactic, however the brand, model and at times the sales date are swapped for incentives programs which may be more profitable. Traditionally in sales incentives fulfillment, it has been very difficult to catch this type of fraud as it has been difficult to validate invoices across manufacturers Now, we catch them and they don’t get paid.
3. Submitting fictitious invoices with fake customer invoices
Again, a bit of a riff on the above: the sales date, models and everything else are within program parameters, the invoice number matches that dealer’s invoicing numbering protocol and the invoice number is advanced enough that it has not been used yet. The store invoice is then populated with fake customer info pulled from phone book, Google, 411 or wherever. Traditionally in sales incentives fulfillment, it has been very difficult to catch this type of fraud as it has historically been tough to verify this customer information but now we catch them and they don’t get paid.
A strangely off-the-wall variant of this tactic is when a salesperson buys of book of invoice forms from an office supply store and submits them along with otherwise correct information. We have to have a laugh when this happens – those ones stand out like a blemish on school picture day.
4. Selling To Yourself
On the surface, this one can seem like a bit of a grey area: if a salesperson buys products from the store they work at (makes sense) should they then be claiming a spiff and and available consumer rebates? We do not assume the answer is “yes” as in this recent and curious case.
A non-listed salesperson, meaning they hadn’t been listed in our system as being part of the sales channel, entered a claim for goods allegedly purchased from himself at his own store. He also entered claims for an available instant rebate and express rebate for the same purchase. This attempt at a double dip was a flurry of red flags at our end and it turned out that our client saw it the same way.
If you are in the business of processing sales incentives claims, especially sales spiffs, I hope this list will be useful to you. For further resources, feel free to download our Line Auditor’s Cheat Sheet – you don’t need to enter your email or anything, it’s just available for your use. Enjoy!
Haris Khan is the manager of the Risk and Compliance department at 360insights.com Connect with Haris on Twitter at @HarisAKhan13 or on LinkedIn here.