It is thought to be the biggest case ever in Sandwell, in terms of the amount claimed illegally.

Zahida Parveen and Jhavid Iqbal, both of Victoria Park Road, pleaded guilty to 54 charges relating to benefit fraud and money laundering. At Wolverhampton Crown Court on Friday (August 5), Parveen was jailed for two years and Iqbal for two and a half years. The overpayments totalled £127,469.25, made up of £50,902.37 in housing benefit, £3,976.04 in council tax benefit and £72,590.84 in income support.

The court heard that Zahida, aged 43, had claimed to be a single parent with children and said 40-year-old Javid was her landlord. Sandwell Council officers investigated and found they were actually married. The couple had fiddled forms and letters to suggest they weren’t married, so that benefits would be paid.

Councillor Steve Eling, Sandwell Council’s deputy leader and cabinet member for strategic resources, said: “This case is probably the biggest case we’ve ever had here in Sandwell in terms of the amount swindled. It sends out a strong message that we will take tough action against anyone who cheats the system. The judge praised the detailed and comprehensive investigation that had been carried out by Sandwell Council. The judge also described the fraud as a professionally planned deception, organised cynically through pure greed.”

Councillor Eling said the council would try to recover the overpayments and costs through the courts from the couple’s assets using confiscation legislation.

Costs are still to be set but the council will seek to recover all costs.

According to the National Fraud Authority Annual Fraud Indicator, Local government could be saving taxpayers £2.1 billion a year by cracking down on fraud in housing tenancy; procurement; pay, pensions and recruitment; council tax; grant; and blue badge schemes. Money currently lost to fraud and error costs every household in England almost £100 a year.

The ten point checklist was compiled, at the request of Mr Pickles, by experts in the National Fraud Authority. The recommendations include councils using credit rating agencies to stop tax evasion and benefit fraud; staff background checks to prevent fraudsters and organised criminals infiltrating key posts.

The Government’s Counter Fraud Task Force was launched last year to develop a new strategic approach to tackling fraud across the public sector with a focus on prevention. It will report in May.

Many councils and housing associations are already tackling fraud and error in housing tenancy claims with the departments help. £19 million has been committed to 51 councils to help recover unlawfully occupied homes. Last year they recovered nearly 1,600 properties worth around £240 million.

Eric Pickles said:

“It’s time to get tough and take on the fraud cons. At a time when we need to cut the national deficit and government waste, cleaning up fraud could save the taxpayer over £2 billion in recovered cash currently being fraudulently stolen or lost to tax cheats.

“Better prevention, detection and recovery of fraud will help reduce the financial pressure on councils and help protect frontline services. Today I am publishing the top ten plays for cracking down on council finance fraud.

“Councils should carry out better credit checks through credit rating agencies before giving over discounts or benefits. They should properly vet staff in key positions and put stricter controls on who can use the council credit card.”

Mike Haley, Director of Public Sector Fraud, National Fraud Authority said:

“At a time when councils are attempting to protect front line services, fraud can no longer be tolerated. Substantial savings can be made, as demonstrated by the best local authorities, and reducing fraud can make a significant difference to local government finances. This ten-point plan, based on local authority best practice, is a starting point in helping councils get a grip on fraud.”

Top ten tips for tackling local authority fraud:

1. Measure exposure to fraud risk;
2. More aggressively pursue a preventative strategy;
3. Make better use of data analytics and credit reference agency checks to prevent fraud;
4. Adopt tried and tested methods for tackling fraud in risk areas - such as blue badge scheme misuse;
5. Follow best practice to drive down Housing Tenancy and Single Person Discount fraud;
6. Pay particular attention to high risk areas such as procurement and grant awards;
7. Work in partnership with service providers to tackle organised fraud across local services;
8. Maintain specialist fraud investigative teams;
9. Vet staff to a high standard to stop organised criminals infiltrating key departments;
10. Implement national counter fraud standards developed by the Chartered Institute of Public Finance and Accountancy.

Estimates indicate that over 400,000 people could be wrongly claiming for single person discount at a cost of £100 million a year to councils in lost council tax. Birmingham City Council has identified £6.8 million worth of fraudulent and incorrect claims for single person council tax discounts.

Some councils are already seeing the benefits of using credit rating agencies. Cheshire East Council found nearly 2000 people had wrongly claimed using Experian credit data. It cost £80,000 but will recover half a million pounds in new income.

Kent County Council is pioneering a contract framework for credit rating agencies which all councils can buy into. This will keep costs down and tackle those that are wrongly claiming services. Mr Pickles believes other councils should take advantage of Kent’s example and sign up to it.

Local Government employs around 2 million permanent, temporary and agency staff. Ealing found that 6 per cent failed proper vetting checks but that the figure was higher for temporary staff at 13 per cent.

One council found an agency worker put in charge of a large budget had set up a fictitious company and made false claims totalling £110,000. The person had used a false CV and was later sentenced to two years in prison. The insurance company refused to pay compensation.

London councils have been targeted by a group of sophisticated and organised false identity fraudsters using fake passports to falsely claim £700,000 of services. Oxford Council hired a dedicated fraud officer last year and recovered 25 properties in the first six months. In 15 of these cases the unlawfully sub-letting tenant was still claiming housing benefit, the total cost of which was £1500 per week.

The Department for Communities and Local Government has committed £19 million to helping 51 councils tackle social housing fraud.

IRRV David Magor OBE at LAIOG 17 May 2011

DWP David Barr at LAIOG 17 May 2011

HMRC Rebecca Hall at LAIOG 17 May 2011

BECKET CHAMBERS Paul Tapsell at LAIOG 18 May 2011

FUJITSU Andy Fuller at LAIOG 18 May 2011

NFA Rachel Tiffin at LAIOG 18 May 2011

NFA Sanjay Mackintosh at LAIOG 18 May 2011

Professional Standards for Investigators Launch at LAIOG 18 May 2011

PHF Paul Fowler at LAIOG 18 May 2011

ITS Mike Neumann at LAIOG 18 May 2011

by Andy Fuller, Associate Director, Government Consulting, Fujitsu

The UK public sector has an opportunity to lead the way in tackling billions of pounds of fraud and error to offset the worst effects of budget cuts with proven, innovative approaches

“The potential savings are compelling – implemented in the right way, systems to cut fraud and error could save £10 billion across government within four years”

Estimates of public sector fraud vary between £15 and £25 billion, with fraud and error on welfare payments alone estimated to be costing the UK taxpayer upwards of £5 billion a year.  The government’s drive to complete the introduction of Universal Credit by 2017 will go a significant way to delivering a simpler, and more robust, benefits system. But in the meantime, how can councils drive through additional CSR savings and leverage the significant skills and knowledge of their in-house fraud teams?

National fraud teams

The government’s plans to build a national fraud investigation resource will have significant implications for the way in which local authorities are able to bring together different sources of data, combined with excellent local knowledge, to successfully tackle fraud and error through the effective screening of applicants’ information.

This newly formed national-level fraud authority must reach right across the public sector with a strong central hub and empowered regional teams, leveraging shared data, knowledge and  expertise. Automation, outsourcing, shared services and other efficiency approaches will all play their part, but two other areas are highlighted by politicians as untapped sources of cost-reduction – fraud and error.

The traditional approach

The traditional government approach to curbing fraud is to identify anomalies and suspicious patterns by linking together the enormous databases held by relevant departments. Not only is this a slow and expensive process, but many people are uncomfortable with the implications for civil liberties. Neither is increasing the complexity of the claims process for benefits and tax a workable solution. Making claimants jump through ever more complex hoops to receive their entitlements smacks to many of means testing and is likely to result in large numbers of genuine claimants being disenfranchised, as well as introducing more potential for error.

As a key supplier to government, Fujitsu is well aware of the sensitivities involved here; it is also an area where we have built considerable expertise. Our experience has convinced us that the sector can make substantial inroads into reducing fraud and error in a way that not only overcomes the difficulties outlined above, but does so quickly and at a manageable cost while actually improving the speed and efficiency of services for claimants.

Early warning system

That estimate is based on our experience of devising, implementing and managing just such a fraud and error reduction service: “Fraud Shield” for a large Government Department. Essentially, the system uses statistical models built on past claims history to identify the likelihood that any tax claim is erroneous or fraudulent before it is progressed. Previously, claimants who made genuine errors often found these were not discovered until after the claim was paid. This meant they suddenly faced an unexpected demand to pay back the money. That often proved far more problematic to deal with than if the claim been refused or reduced at the outset.

The system doesn’t make the decision as to whether a particular claim is good or bad. Rather, it examines around 150 data items on each form that are seen as predictive (for example someone’s name and address is not, but their postal area may be). By automatically comparing these items to anonymised data from past claims (good and bad), it’s possible to generate a score predicting the likelihood of any particular claim being erroneous or fraudulent. This has the twin advantages of allowing staff to prioritise the effort they put into validating particular claims, and speeding up the payment process for the majority of genuine claimants (since those flagged up as low risk can be pushed through far more quickly).

It’s possible to perform additional analysis that further improves the accuracy of the scoring. For instance, we store lists of people known to have exhibited suspicious behaviour in the past or accounts which have previously been hijacked. We also keep track of key information like phone and bank account numbers for a certain number of days after claims are filed, which helps spot fraudsters who might be using the common tactic of bombarding the systems with multiple claims. For example, they frequently acquire a set of fake IDs, but use the same phone number on every form. In addition, we check the unique ID number of claim forms to prevent people using forged forms unnoticed. And there is other publicly available data we can use as a cross-check to help further ascertain the likely accuracy of the information people give: for example, marketing data that people have already consented may be used by third parties.

Innovative and effective

We believe our approach is an innovative and effective way to reduce the amount of fraud and error that occurs in public sector benefits payments. Equally important, it can be implemented quickly and it offers an extremely fast payback. The process of bolting these checks on to an organisation’s existing data-entry processes can be both straightforward and rapid – in the Departments case it took just two weeks. And within another two weeks the scheme had uncovered enough fraud and error to pay for itself for a year. Of course, even as we are seeking to innovate, government is also looking to engage with suppliers under new contract models. We believe that in the current budgetary climate, any proposed system requiring a huge upfront outlay is a non-starter.

Rewards for results

Local government’s commitment to reducing fraud and error continues to lead the way for the public sector as a whole. The range of councils’ system improvements, shared services, information integration and risk-based verification of claims that are coming to fruition in 2011 shows that local authorities still have a key role to play in cutting inaccuracy and waste from the benefit system.

There is  a huge opportunity here to make radical reductions in fraud and error across the sector, and one that – in this climate of austerity – should not be not be missed. Clearly, current levels for illegitimate payments – at around 3% of total expenditure – are unacceptable. By combining resources at a national and local level, and working closely in partnership with private sector suppliers who have an intimate understanding not only of the necessary technology and processes but also of public sector IT strategy and operations, local government can remain firmly at the centre of tackling fraud and error.

Andy Fuller, Associate Director, Government Consulting, Fujitsu

http://www.fujitsu.com/downloads/EU/uk/pdf/insights/fraud-error.pdf

http://www.fujitsu.com/uk/insight-opinion/insights/fraud-error.html

http://www.fujitsu.com/uk/

Dear Mr Barr,

Welsh Benefits Investigation Group (WBIG) and the Single Fraud Investigation Service (SFIS)

Introduction

WBIG represents all 22 Welsh Local Authorities (LAs).

Since the release of the ‘Tackling Fraud & Error in the Benefit & Tax Credit Systems’ report on 18^th October 2010 (referred to henceforth as TFE), WBIG is aware that other LA Organisations, as well as individual LAs, have made valid comments regarding the proposals for SFIS.

In light of these circumstances, WBIG has delayed making comments in the hope that many of the issues raised previously would have been clarified, especially from the LAs perspective. However, to date, a number of issues remain unresolved so LA concerns remain.  Whilst not wishing to cover ‘old ground’ this letter underlines particular issues that are of concern to our WBIG members.

WBIG’s intention is to work positively and constructively with all stakeholders to ensure the best possible outcome for –

• The Single Fraud Investigation Service, and
• All LA staff involved in the investigation of Benefit fraud.

Consultation – General

Although the TFE has far reaching consequences for LA Investigation Teams, it is apparent that LAs were excluded from the pre-publication consultation process. Despite the potential significant impact on LAs, they are hardly mentioned in the TFE, appearing to any reader of the TFE that they are minor players in combating fraud and error.  This is simply not the case and we ask that this matter is clarified in any further publications.

DWP should be well aware, from annual statistical returns, that LAs undertake a vast number of high quality benefit fraud investigations and deliver many thousands of sanctions via professionally qualified staff, often utilising their own legal teams at their own cost.

Due regard should be given to LAs for their achievements and commitment to safeguarding public funds and combating fraud and error within the LA and DWP administered benefits schemes, which we feel are certainly equal to the savings, outcomes and achievements of the DWP in the realm of benefit fraud investigation and sanction. We would, therefore, wish to seek an active role in any subsequent decision-making processes.

Consultation – National Fraud Authority (NFA)

The NFA’s web-site states:

• “The NFA is an executive agency of the Attorney General’s Office”.
• “As one of the law officer’s departments, the NFA sit at the heart of government with access to key decision-makers and ministers across a range of key departments.”
• “The NFA work with a huge range of stakeholders from across the wider government, law enforcement, industry and voluntary/charity sectors to focus and co-ordinate the fight against fraud in the UK.”
• In light of the above:
  • Have they been involved in the consultation process?

• As the aim of SFIS seem to be for more efficient and effective “joint working”, it would seem a logical progression for the NFA to have a coordinating / management role.  Please comment.

Timetable for introduction

The timetable indicates that SFIS will be introduced from 2013 with a remit for covering all benefits and tax credits, including housing benefit. Please clarify, where LAs fit into the 2013-2015 implementation timetable? (Note: As outlined on page 50 of TFE.)

We find it difficult to understand how SFIS intend to investigate Housing Benefit fraud, during the transitional period when Universal Credit is inaugurated, as this will mean SFIS being able to access the numerous and diverse Housing Benefits computer systems used around the country.  Within the 409 LAs there are many different computer systems, from an array of software providers.

Please clarify whether LA investigators will remain within the LAs but under new SFIS management?

There is a real concern that if the intention is to introduce LAs into the SFIS belatedly in the timetable, then there won’t be sufficient jobs, or adequate suitable jobs for the skills the LAs Officers possess.

Therefore, it is our belief that, LA Officers need to be included at the start of the implementation and on equal footing with DWP & HMRC Officers.  By this we mean that appointments must be seen to be free from any perception of bias. All appointments should be transparent, fair and with due regard given to appropriate, relevant and proven skills and abilities.

Count of LA Investigators

According to DWP figures released around October 2010, there were some 1,200 LA Investigators. However, if, as suspected, this figure is derived from the ‘Housing Benefit Recoveries and Fraud Guidance Return’ (HBRF), submitted by LAs to the DWP, then the figure does not fully reflect the actual number of staff involved in LA Investigation Teams employed in tackling benefit fraud and error.  This is because the HBRF does not cover the whole range of fraud activity undertaken by LAs.

For reference, the following is an extract from HBRF issued by DWP.

Clearly this criteria does not take into account other experienced LA Officers, many of whom may be partly or fully PINS trained, based in LA Investigation Teams that are not full-time equivalent Fraud Investigators (FTE).  For example:-

• Fraud Managers
• Intelligence Gatherers / Support Staff
• Visiting / Compliance Officers

What impact will this underestimation have on staffing implications for SFIS?

In addition, it is apparent the HBRF criteria has been interpreted differently by some LAs, in some cases following advice from the Benefit Fraud Inspectorate (BFI). The following examples demonstrate the anomaly:

Example 1 – In smaller fraud teams, e.g. with 3 staff, the senior officer / senior investigator may have investigative and management roles, which could be recorded on the HBRF as 2.5 FTE.

Example 2 – In team’s where duties are split between HB fraud and other non-HB related duties (e.g. Internal Audit functions), although there may be 4 staff, they could be recorded on HBRF as 2 FTE.

How do you intend to address these anomalies?

TFE refers to 1,200 LA ‘investigators’, transferring to SFIS. In light of the issues we have raised above:

• What exactly is meant by the term, ‘investigator’?
• Which members of the LAs staff qualify to be classified as an ‘investigator’?
• Is there any significance that the FIS managers are titled, Team Fraud Investigators (TFI)?
• The TFE does not mention LA Fraud Managers transferring to SFIS, yet surely they and the DWP TFI undertake broadly comparable roles.  Will DWP, HMRC & LA Managers be considered in the same way?

Effect on LA staff

In these difficult times, with all manner of constraints and pressures, LA staff are very rightly concerned as to the likely affect the implementation of SFIS could have on their careers within fraud. In addition to the questions raised under the earlier sub-headings ‘Timetable for Introduction’ and ‘Count of LA Investigators’, other unanswered questions that need clarification are:

• Where is this new service going to be based?

We would suggest that a locally based fraud service is imperative for the effective implementation of SFIS.  This would maximise efficiency, taking into account local knowledge and contacts.  It would also be more visible to the local community than having a centralised office where travelling logistics and costs would inevitably be a significant concern when evaluating and considering the undertaking of investigations.

• Although the DWP intend employing 200 new anti-fraud officers and introduce a new ‘Mobile Task Force’, will there be guaranteed jobs for LA Investigators?
• How will staff be appointed to the SFIS and the Mobile Task Force?

If DWP is serious in its aim to reduce fraud and error then they must utilise the best people in post and not simply ‘slot in’ staff from HMRC and DWP with little or no fraud experience or who do not possess the necessary qualifications and skills.  For example, LA investigators possess long-standing experience and skills in the investigation of cases involving residency / tenancy and landlord fraud, which would be invaluable to SFIS and the saving of public funds.

• Where is the ‘Mobile Task Force’ to be based?  Will there be more than one unit?  Will there be locally based investigation officers, a community-based service founded on sectors, staffed by officers who know the geographical areas they work?
• When LA staff transfer to SFIS, will The Transfer of Undertakings (Protection of Employment) Regulations (TUPE rules) apply?  Namely, will employees’ terms and conditions of employment be protected?
• If LAs are to administer a new localised Council Tax Benefit / Rebate scheme, will SFIS or the LA be tasked with investigating suspected fraud cases under the scheme?

In summary

The lack of consultation and lack of information to date has:

• Severely dented the morale of LA Investigation Teams.
• Increased suspicions regarding the aim of the DWP and their intentions towards LA Officers.
• Unnecessarily fuelled conjecture and rumour.
• Damaged confidence and trust that LA Officers had for the DWP.

This said we are committed to moving forward in a positive, constructive and professional manner, to ensure that SFIS is as effective and successful as we all hope it will be, we have shown this over the years with our commitment to joint working.

The way forward

Clearly, the way forward, is:

• For the DWP to urgently consider the points contained in this letter (as well as the others already raised) and
• Promptly issue concise and constructive observations as soon as possible, and
• Provide a transparent commitment to include WBIG / LA representatives in all subsequent consultations.
• That advice is also sought from external agencies/authorities who specialise in fraud.

Yours Sincerely

Andrew Williams

Chair, on behalf of WBIG.

In association with the IRRV

Please find the revised draft agenda below for download:

LAIOG Conference May 2011 Agenda at 22nd March

We are waiting to confirm the Minister – Francis Maude and Ian Duncan Smith have been invited.

Lord Archy Kirkwood from the Work and Pension Select Committee has agreed to attend, along with  Sanjay Mackintosh of the National Fraud Authority presenting Working in Partnership to Tackle Fraud in the Public Sector.

Do not miss the opportunity to attend the round table consultation with the DWP on the Single Fraud Investigation Service.

The key fraud associations are participating, including the Audit Commission and, National Fraud Authority along with LAIOG and IRRV.

Speakers:

Kerry McDermott – IRRV President

Lord Kirkwood – Work and Pension Select Committee

David Barr – DWP

Paul Tapsell – Barrister

Alan Bryce & Duncan Warmington – Audit Commission

Rachel Tiffen – National Fraud Authority

David Magor OBE – IRRV CEO

Sessions:

AGM – LAIOG members

LAIOG Launch – Professional Standards for Investigators Training Scheme

Training Sessions

DWP Round Table Interactive Session

ITS Prize Quiz in the Exhibition Suite

Event dinner

Delegate fees for 2011 are:

Both days:

£149 + VAT for LAIOG + IRRV Members

£179 + VAT for Non Members

Day 1 or Day 2:

£79 + VAT for LAIOG + IRRV Members

£99 + VAT for Non Members

LAIOG AGM

This is being held at the beginning of the first day (17th May) and is free for LAIOG members.

Delegates can book for the event by email, post, or phone:

Download booking form (excel): LAIOG 2011 Delegate Booking Form

Download PDF booking form: LAIOG 2011 Delegate Booking Form

Contact us by email at laiog@opportunities.co.uk

Book by phone on 01491 413 858

Please click here to pay by credit card

Foster + Freeman are innovators in the design and manufacture of systems for the examination of questioned documents, latent fingerprints, trace evidence and shoe prints.

Established in 1978, Foster + Freeman has become one of the foremost forensic science equipment suppliers in the world, exporting market leading, and in many cases unique products to more than 140 countries.
Our products are designed to assist in finding evidence at scenes of crime and in performing detailed forensic investigations in the laboratory. Our customers include all major police and forensic science laboratories as well as government agencies, commercial and private organisations such as homeland security, immigration authorities, security printers, lottery companies, insurance companies, university departments and national libraries. With offices in the UK and the USA, and a global network of agents and distributors, Foster + Freeman are able to provide customers with a high level of technical support, installation and training.

VSC-QC1 – Brand new instrument being shown for the first time at LAIOG

Combining ease of use with efficiency the VSC-QC1 is designed to aid government agencies and private businesses in the fight against identity fraud through the use of forged and altered documents including passports, ID cards, visas and other security documents.

By incorporating high specification multi-spectral document examination technology with a simple to use touch screen interface and automatic-triggering when a document is placed upon the examination bed, the VSC-QC1 is perfect for front desk applications.

VSC 6000 – Flagship document examination instrument

The VSC 6000 desktop video spectral comparator is a comprehensive digital imaging system providing the questioned document examiner with an extensive range of facilities for detecting irregularities on altered and counterfeit documents.

The VSC 6000 is equipped with a high-resolution colour camera and zoom lens, a range of viewing filters, and multiple illumination sources from UV to visible to IR wavelengths.  Instrument functions are selected and controlled through a simple graphical user interface and the Windows Vista operating system includes casework management and image archiving facilities. An integral micro-spectrometer allows measurement of reflectance, transmission, and fluorescent features.

www.fosterfreeman.com

The InCase brand has become synonymous with quality, reliability and continued development towards a common goal for all our customers.  INTEC customers have won the coveted IRRV excellence in Anti-Fraud Award almost every year since its inception in 2002, including this year’s winner in the London Borough of Sutton).

There are many organisations putting forward a united front against some of the changes being suggested with the new SFIS, particularly IRRV and LAIOG. Both these organisations feel very strongly that the way in which many things can be done, should be done, by local authorities. We fully agree and believe that the statistics that have been demonstrated put a very strong argument forward.

Seeing the use of these statistics and this type of information in particular, got us thinking. As a result of this INTEC has come up with the’ IBMS’ product, which you will see is not only available to all of our customers but to any fraud team in the country offering a detailed benchmarking system without the fuss of central government controls .

Joined up working

In times of austerity, the more sharing of data and workload that is possible can mean greater efficiencies and results. Through the use of INTEC systems, maximisation of time, effort and effective data matching give you superb sustainable results.

Fraud benchmarking @ www.intecpublicsector.com/public-sector-software/ibms

For many years benefit fraud teams have produced numerous reports and statistics for their member authorities and DWP. There has never been a central repository of data or the tools to break down all the information that is provided.

INTEC has produced a web based system for the collection and analysis of data. Tools are available to not only analyse the information provided, but to also collect the required detail that is needed to standardise the output.

Data mapping

A major hurdle in any benchmarking group is the standardisation of data types. Currently there are a number of systems available, similar to InCase, which allows the storage of numerous different data types. Each system may refer to a case status of ‘Closed Case Fraud Proven’ with potentially different codes; like ‘Fraud Proven’ or ‘FP’.

What IBMS will do is apply a common set of codes and convert the individual system’s values to the standardised, set so as to provide truly comparable benchmarked data. This information will then be shown visually through the secure website in the form of grids, graphs and charts. Details can then be exported to allow further comparison through localised spread sheets.

Matching

The INTEC benchmarking and searching system has two key user functions; to provide analytics and to allow searching across data nationally.

The summary analytics allow breakdown of key data by single/multiple authorities, by department and by varying case details. Analysis of case referrals, closures and on-going investigations can be viewed graphically by different criteria, such as:

• Case/Fraud Type
• Case Status
• Information/Referral Source
• Outcome

These breakdowns will give a full range of benchmarking statistics across your own authority and against other authority’s fraud data. Combine this with date filters and you can also compare current rates of investigations with previous years. Common details such as case references, closure dates and values give further enhanced results of fraud investigations.

Integration

Through the use of the InCase fraud system, InSearch Profiling and Analysis and InForm Online forms, direct integration is available to the IBMS database. New records are instantly verified against the IBMS data in order to indicate any potential fraud risk.

Direct interfaces are available to provide the same functionality to third party systems. Online access is provided to allow data upload and searching of suspected fraudsters’ basic information.

Cross departmental matching

Due to the way in which this system is designed there exists the capability to hold information from other sources, which may also be used in the detection of fraud activity within the authority. Through the exact same systems and methods, other data will be passed to IBMS in order for more comprehensive searching and matching.

The benefits of having other departments and authorities holding their data securely are that genuine fraudsters can be located who otherwise would go undetected.

Searching

Through a number of search functions, data can be located either automatically or via manual checks. The online system carries out comprehensive matching of real-time cases to identify where the same person exists on multiple investigations, either within departments at your own authority or across all authorities.

This, combined with the auto-checking of referrals within your own systems, ensures that you have a complete anti-fraud solution identifying any potential matches.

Security

All databases and systems are held at a secure off-site location with managed services ensuring maximum uptime of all data and web access. Details passed to the database are transmitted securely using the latest encryption and data handling techniques ensuring that no information can be intercepted and viewed. Website pages are loaded and information is passed behind a secure certificate, giving further peace of mind in data security.

Effective data handling

Information is used for benchmarking and/or data matching. Automation of the systems, mapping and secure transfer of data files, all mean that case details are shared and used effectively, without any data protection issues. INTEC have registered this system with the ICO for data certification of use.

IBMS allows automated matching of people across all available datasets. You have the capability to manage your own case load whilst having the ability to check all entries with known intelligence throughout the whole of the UK.

www.intecpublicsector.com

By Pekka Dare

The International Compliance Association (ICA) works worldwide with a diverse range of public and private sector organisations to promote best practice in combating financial crime. As a result, the ICA is uniquely placed in terms of identifying best practice from a range of jurisdictions, organisations and industry sectors.

The past decade has seen a rapid development in technology and delivery mechanisms within financial services sectors and other regulated firms. New payment methods involving electronic money, mobile money and stored value cards continue to raise challenging issues for financial crime prevention professionals.

The exponential growth of new payments technology has resulted in significant social economic benefits for the financially excluded and developing economies worldwide:

Four million people who receive Social Security benefits lack bank accounts. To reduce reliance on paper cheques, the United States began distributing these benefits using prepaid cards, which beneficiaries can use to purchase goods or get cash. Previously, beneficiaries cashed cheques at non-banks and conducted transactions using cash or money orders. *

However, along with these benefits, risk and issues related to fraud and financial crime have emerged.

The danger for the public sector is that new technologies and processes may be implemented without the attendant risks being fully evaluated and mitigated.

The Risk Based Approach to Financial Crime

A key aspect of managing the risks of emerging technology is the risk based approach. Private sector firms within the scope of the Money Laundering Regulations have for several years adopted the risk based approach to anti money laundering. However this approach has now spread to encompass all financial crime, including fraud.

But what does the risk based approach actually mean? Far from being an excuse to implement cursory controls, the risk based approach demands a rigorous and ongoing cycle of risk assessment, implementation of proportionate controls, and monitoring.

The result of this monitoring (which should be undertaken truly independently from the unit or department undertaking the work) will then feed back into a new risk assessment and the process will begin again. This model has been described as a “virtuous circle”.

The key to controlling the risk of fraud in any organisation is identifying the vulnerability of processes, roles, products and services to fraud. Most financial firms do this in a very structured manner allocating weighted scoring criteria based on defined criteria.

The next step is to develop controls that are proportionate to these identified risks.

The objective of the risk based approach in respect of fraud is to permit the implementation of cost-effective fraud prevention. A risk assessment provides a structured approach by which to identify, document and evaluate:

• The threats facing the sector in which the organisation operates.
• The threats from products and services provided in this organisation.
• Any existing fraud management policies and procedures, and the potential impact of enhancement.
• The acceptable level of residual risk within the organisation.
• The level of risk appetite of the organisation.

A Hub & Spoke Approach

In private sector firms, particularly the larger banks, a ‘hub and spoke’ approach has been taken to ensure that responsibilities of central fraud departments are aligned with those of fraud teams within the business units.

Given the diversity of the product base, and therefore the potential fraud risks faced by major firms, the knowledge and skills within the customer-facing and operational parts of the business were a vital resource for identifying and mitigating fraud risk and reacting quickly and effectively to fraud threats. This model is typically part of a ‘hub and spoke’ approach whereby support was provided to the ‘front line’ by a central team whose primary responsibilities were developing and enforcing policies standards, monitoring, reporting and highlighting threats and sharing best practice.

It is important that anti-fraud responsibilities are embedded within operational units of an organisation so that they become part of day to day management. This is particularly so in relation to new product development or where changes are made to existing products, services or delivery channels.

Plausibility Testing

Increasingly financial services firms have found that no matter how good a process is, or how well a form is designed, people can still complete a process badly. When opening an account, a bank clerk may complete all the details required on the application form, but may do so on a very superficial level, or perhaps more importantly, not stop, and ask common sense questions challenging the veracity of the information they have been provided with by the customer.

Many banks are now attempting to ensure staff have the ability and the skill to challenge and probe further when presented with information which is, on the face of it, incomplete or implausible. This approach has come to be known as “plausibility testing”.

This process involves providing sanitised case studies of real cases which have been identified, where staff should have challenged the veracity of the information they were provided with.

Staff Training and Awareness

Many financial services firms are developing tailored fraud training for staff based upon the roles they undertake. This is an extension of the risk based approach, with customer facing staff being given more detailed training on identifying fraudsters (e.g. providing awareness of social engineering techniques used by fraudsters on call centre staff).  Tailored training will also be developed for specialists, i.e. auditors, underwriters, fraud officers and senior management) the material and content can be made relevant to the roles and use sanitised case studies. It is far more effective to play a phone recording of an identity fraudster in action to a room or walk through a fraudulent application in a workshop than to produce a computer based training (CBT) package with sets out the legal and regulatory obligations for staff in a more staid and less interactive manner.

It is evident that most firms in the private sector are moving away from solely relying on CBT to raise awareness of fraud. Many firms are moving to a mixed approach, covering face to face training, CBT and other awareness raising initiatives such a desk drops, ad hoc communications and newsletters.

Pekka Dare is the Global Head of Anti Money Laundering and Financial Crime Prevention at the International Compliance Association. The International Compliance Association is a professional organisation dedicated to the pursuit of excellence in compliance, anti-money laundering and financial crime prevention. ICA offers internationally recognised innovative professional qualifications that help improve knowledge, enhance skills and minimise risk. For novice and experienced practitioners alike, ICA certificate and diploma programmes are a benchmark of competence and excellence. For more information on qualifications and training visit www.int-comp.org

AMA Associates

AMA is an approved supplier of fraud and security training to both the public and private sector. Our Accredited Counter Fraud Specialist foundation level modular programme is accredited by the University of Portsmouth.

We are an accredited training provider for Fraud and Security under the OGC buying solutions framework agreement for Learning and Development. This framework is available for use by the public sector and by using this EU compliant framework agreement customers have easy access to all our services without the need for further costly procurement exercises.

Our modular training includes the whole range of products needed to equip an investigative counter fraud specialist with the requisite skills and knowledge. Our programme includes: Legislation, Exhibits, Witness Statements, Court Procedures, Intelligence Gathering, Investigative Interviewing, Internal Fraud & Corruption, Computer Fraud and Fraud Strategy.

We provide a full range of security training including Covert Surveillance, Technical Surveillance Equipment & Investigation, Photographic & Video Evidence and Log Keeping and all our trainers are experts in their field.

AMA provides an “end-to-end” service from Training Needs Analysis to the support of an In House Legal Team. Our customers are important to us and we work closely with them to ensure that our training solution meets their need.

www.ama-assoc.co.uk

CIFAS

CIFAS is a not-for-profit membership association representing the private and public sectors.  CIFAS is dedicated to the prevention of fraud, including staff fraud, and the identification of financial crime.

CIFAS has over 250 Members spread across banking, credit cards, asset finance, retail credit, mail order, insurance, savings, telecommunications, factoring, share dealing and the public sector.  Although at present CIFAS Members are predominantly private sector organisations, public sector bodies may also share fraud data reciprocally through CIFAS to prevent fraud.

Members share information about identified frauds in the fight to prevent further fraud.  CIFAS is unique and was the world’s first not-for-profit fraud prevention data sharing scheme.  Since CIFAS was founded, CIFAS Members have prevented fraud losses to their organisations worth billions of pounds by sharing fraud data.

www.cifas.org.uk

International Compliance Association

The International Compliance Association is a professional organisation dedicated to the pursuit of excellence in compliance, anti-money laundering and financial crime prevention. ICA offers internationally recognised professional qualifications that help improve knowledge, enhance skills and minimise risk for firms. For novice and experienced practitioners alike, ICA certificate and diploma programmes are a benchmark of competence and excellence.

0121 362 7747

www.int-comp.org

Foster and Freeman

Foster + Freeman are innovators in the design and manufacture of systems for the examination of questioned documents, latent fingerprints, trace evidence and shoe prints.

Established in 1978, Foster + Freeman has become one of the foremost forensic science equipment suppliers in the world, exporting market leading, and in many cases unique products to more than 140 countries.

Our products are designed to assist in finding evidence at scenes of crime and in performing detailed forensic investigations in the laboratory. Our customers include all major police and forensic science laboratories as well as government agencies, commercial and private organisations such as homeland security, immigration authorities, security printers, lottery companies, insurance companies, university departments and national libraries.With offices in the UK and the USA, and a global network of agents and distributors, Foster + Freeman are able to provide customers with a high level of technical support, installation and training.

01386 768 050

www.fosterfreeman.com

Intec Public Sector

Welcome to INTEC Public Sector. For many years INTEC has worked with local and national organisations to deliver both packaged and bespoke solutions. Our experience working with local authorities and national agencies has helped us build a comprehensive portfolio and a large UK-wide customer base, particularly within fraud, audit and health and safety.

The INTEC portfolio of products is always expanding with ongoing research and development into new areas. We can work with any business to improve its services, and develop the required solution to meet any specific needs. INTEC continues to improve and reinvent its systems to ensure that we provide customers with the best solution available.

Our key expertise is in providing niche solutions within local authorities. Our range of solutions include departmental case management and data analysis through to corporate systems and national web portals.

www.intecpublicsector.com

Magnet Solutions: LoCTA Search

LoCTA Search is an efficient, easy-to-use, web based tool which provides a national search of subscribing Authorities’ Revenues and Benefits databases.   It is a real-time, integrated solution which increases efficiency, performance and cash flow in a wide variety of areas of tracing and recovery.

Working in partnership with Local Authorities and using innovative data exchange technology, LoCTA Search has developed its powerful search capabilities to provide cost –effective, up to date information on both individuals and businesses.

To make LoCTA Search the tracing tool MAG:NET Solutions has incorporated external data sources such as the BT OSIS Directory, a national PAF Search (Post Code Address File), unique access to DWP’s Debt Recovery database and Credit Reports from Equifax.

LoCTA Search is operational over the Government Connect Network (GCSX) ensuring that access is only made available to subscribing Local Authorities – securely. MAG:NET Solutions offers all Authorities a flexible pricing plan based on an annual license, unlimited users, unlimited searches and free unlimited support.

LoCTA Search now delivers a wealth of information in one easy to use system.

0161 925 1500

www.magnetsolutions.co.uk

Fujitsu

Fujitsu, has developed and proven an innovative, rapidly deployable and low risk solution to help organisations tackle fraud and error before it enters the system.  Working with Experian and other market leading partners Fujitsu has developed this approach which is proven to deliver a step change improvement in fraud and error detection and prevention. This approach has been proven to deliver dramatic results in a very short period of time and could be applied more widely across government. For further information visit the Fujitsu stand or listen to Andy Fuller (Fraud and Error Lead) who will be speaking on 18th May.”

www.uk.fujitsu.com

NEAL

NEAL is the leading provider of high integrity, custom-designed interview recording equipment. For over a decade we have provided the best indisputable audio and video recording systems to professionals in the Police Force, Enforcement Organisations, Emergency Services, Security, Human Resource and Government bodies.

Our products, whether used for investigation, disciplinary, interview or public safety purposes, provide a complete and evidential account of what has been said. “NO DISPUTE”

0191 418 1199

www.neal.co.uk

TraceIQ

Background checks – providing you with vital information

TraceIQ helps you gain a clearer picture of people and their circumstances. Our industry leading data provides a wealth of information, so you can carry out investigations, conduct background checks and find people.

raceIQ helps you make informed decisions faster. So whether you work in financial services, the public sector, or independently, TraceIQ’s datasets will help you conduct background checks to investigate claims and prevent any fraudulent activities.

www.traceiq.co.uk

Alarm

Alarm aims to make a positive contribution to loss reduction in the Public Sector.  By working in collaboration, Alarm brings together a variety of experiences.  We wish to share this pool of knowledge amongst all Public Services to avoid duplication of effort and further waste of precious resources.  We also aim to provide, over a period of time, some guidance in terms of best practice for both new and more experienced Risk Managers.  At the same time we aim to influence the national agencies which are directly involved with the provision of Public Services.  We are committed to the partnership approach as this, in our view, is the most effective way to stem the ever-rising impact on our budgets of growing losses and an increasing claims experience.

www.alarm-uk.org