Warranty Fraud Management

Chapter 10Fraud Management with Other Parties

Chapters 8 and 9 discussed how the warranty provider can manage customer and service agent fraud. In this chapter, we focus on how the warranty provider can manage fraud resulting from the following three parties in the service chain:

• Sales channel
• Warranty administrator
• Units within the warranty provider organization

In all of these cases, the warranty provider is the victim of fraud. We follow a format similar to that used in Chapters 8 and 9.

SALES CHANNEL FRAUD MANAGEMENT

Chapter 6 discussed the following methods used by the sales channel to defraud the warranty provider:

• Unauthorized goodwill service
• Creation of fictitious claims using serial numbers from sellable products
• Sales of warranty assets
• Charging extended warranty costs from the OEM

In the two first cases, the sales channel can also be acting as a service agent or in collusion with a service agent. Methods to detect and prevent these kinds of fraud were described in detail in Chapter 9.

In the following we discuss methods to detect and prevent sales channel fraud using the following elements from the warranty control framework.

• Contracts
• Entitlement
• Claim validation
• Analytics
• Material returns
• Service network management

Contracts

Although the warranty provider's, or, more specifically, the manufacturer's, negotiating position with the sales channel may be weak, the warranty provider should have a set of rules in its contract with the sales channel to protect ...