Fraud and Fraud Detection: A Data Analytics Approach, + Website

CHAPTER 12 Register Disbursement Schemes

REGISTER DISBURSEMENT SCHEMES INVOLVE fraudulent refunds and fraudulent voids where these false entries allow the removal of funds from the cash register or point-of-sales system.

Register disbursement schemes differ from the skimming and cash larceny schemes discussed in Chapter 7, where funds are removed from the cash register before being recorded and leave no record of the transactions.

FALSE REFUNDS AND ADJUSTMENTS

False refunds are when no actual return of goods or pricing adjustments are made —they are merely recorded. This allows cash to be taken from the register while the cash still balances to the register records. Instead of cash, refunds can be made to the fraudster’s credit card or an accomplice’s card. Refunding to credit cards avoids other people or surveillance cameras from seeing the fraudster take cash from the register and pocketing the money.

False refunds overstate the inventory of the goods. Since there are no goods actually returned to inventory, there will be inventory shortages. Some level of inventory shortages are expected and accepted as the cost of doing business but excessive and regular shortages are a cause for concern. Inventory may not be counted on a regular basis or the fraudster is involved with the inventory count. If the fraudster participates in the count, he can falsify the recording of the ...