Warranty fraud is a significant issue causing multibillion-dollar losses for the manufacturers and the other warranty providers every year. Warranty fraud is carried out not only by customers and service agents but also by sales channel and warranty administrators. Warranty providers themselves might also indulge in fraud. A multitude of methods are used to carry out (individually or in collusion) warranty fraud.
We had three primary goals for this book:
- Increase the awareness and understanding of warranty fraud.
- Provide concrete and practical methods for effective warranty fraud management.
- Provide a holistic approach to implement these methods.
In this book, we have proposed a warranty fraud taxonomy using a three-dimensional characterization: (i) the actor, (ii) the victim, and (iii) the motivation and methods used in carrying out the fraud. Based on this classification, we have discussed over 50 methods of fraud. However, the list is not complete, as there are many unknown methods and fraudsters are continuously inventing new methods.
We have discussed a number of methods to detect and avoid the different types of warranty fraud conducted by different actors, either acting alone or in collusion. These include dozens of contractual rules, and around 100 entitlement checks, validation rules, and analytics methods. These, together with proper processes and organizational setup, form the framework for warranty fraud detection and avoidance. A right combination ...