ClaimsGator for Manufacturers

The relationship between manufacturers and customers relies on intermediaries as the points of interface for sales and service. ClaimsGator audits the warranty claims from these intermediaries to identify instances of fraud or abuse of the process. We also review RMA's (Return Merchandise Authorizations) to identify unusual failure rates for specific channel partners.

How is the warranty claims process compromised?

To illustrate the kind of claims fraud a manufacturer can face, we highlight a few well-publicized cases from the industry.

In October 2008, ChannelNews reported a multimillion dollar warranty scam in Australia. An Apple reseller group performed repairs on Apple products that were not covered under warranty. The customers would pay the reseller for the repair. The reseller would then file warranty claims on the same repairs under names of customers who were in their current database. This 'double dipping' reportedly helped them claim $2.6M fraudulently from Apple.

In the mid-nineties Uniroyal found that it was the victim of fraud perpetrated by a reseller in partnership with one of the company's pricing administrators. Several creative schemes were developed around different lines of Uniroyal tires. The fraud essentially boiled down to the compromised employee approving non-existent or inflated claims for warranty payment by Uniroyal. This is an example of 'collusion' type of fraud in warranty claims.

A £9M fraud scheme was reported in the Daily Telegraph in 2006. Cisco Systems was the victim. Officials identified 20 service contracts that were used to obtain over 1,000 pieces of high-value computer hardware under the warranty scheme. Most of these purchases were for non-existent claims and were later sold in the grey market.

What kind of fraud does ClaimsGator detect? How?

ClaimsGator captures the above fraud through advanced analytics and a unique user-directed exploratory analysis. There are essentially five categories of warranty abuse.

phantom clients and/or claims,
collusion between the adjuster and the dealer/repair shop,
double billing on the replaced part,
gouging or unnecessary repairs or parts replacement,
process or policy abuse.

ClaimsGator uses artificial intelligence techniques and multivariate analysis to detect deviations in the partners behavior. The chart graphically represents the technique of deviation detection. The 'norm' is the center of the grouped claimants. The further a specific claimant is from the center, the higher the likelihood for fraud.

Additionally, ClaimsGator has a built-in case management system. This helps service headquarters work with field agents in compiling the evidence for recoveries.