Ring … Ring … Ring …
Hello, this is Mrs. Forster.
Yes, Mrs. Forster, this is Jenny with ABC Bank. I’m afraid I have some uncomfortable news to deliver. We show that you are significantly past due on your RV loan, and we may have to proceed with repossession.
But Jenny, I don’t own an RV.
That’s not what our records show. Mrs. Forster, is your SSN XXX-12-4567?
Yes.
Mrs. Forster, is your date of birth January 1, 1975?
Yes.
Mrs. Forster, is your address 123 Anywhere Drive?
No, no, that’s not my address.
Oh my. That is interesting. Well, Mrs. Forster, that would explain the returned mail we’ve received for your past-due notices on your $150,000 RV loan.
Receiving such a phone call as the fictional Mrs. Forster did would not be a good way to start your day. The call was part of a series of events that culminated in the discovery of a far-reaching fictitious loan scheme perpetrated by a senior loan officer. The scheme involved using mailbox service addresses, P.O. Box addresses, manipulation of due dates to improve the appearance of loans, circumventing controls, and abuse of position to leverage power dynamics.
While this exact story is fictitious to protect our clients’ identities, we’ve seen these same fact patterns again and again during our bank investigations. People in positions of power are able to override, circumvent, or leverage the trust they’ve developed with others to sidestep controls that are in place—if the controls are in place at all—to issue fictitious loans and funnel the proceeds to themselves at the expense of the financial institution they were entrusted to serve.
This type of fraud is called occupational fraud and, thankfully, you can do something to combat this risk.
- The most common way occupational fraud is detected is through tips, according to the Association of Certified Fraud Examiners’ Occupational Fraud 2024: A Report to the Nations®.1 By implementing a fraud hotline, such as Forvis Mazars’ IntegraReport, you can both encourage employees to speak up and report malfeasance, and provide a mechanism by which they can report it.
- The most effective way occupational fraud is detected—defined as the method of detection that resulted in the lowest dollar value loss and shortest duration—is data monitoring.1 By implementing data monitoring, such as Loan Portfolio Risk Analytics, you can increase the likelihood of detecting such a scheme early to help reduce its impact to your financial institution. Loan Portfolio Risk Analytics combines advanced analytics with fraud investigation experience to look over loans for anomalies and red flags of fraud. We provide a human touch from our experienced professionals to help you better understand the results of our analytics, giving you confidence that your fraud risk is being monitored.
Request a demo for an experienced professional from Forvis Mazars to walk you through our capabilities with IntegraReport or Loan Portfolio Risk Analytics to help your organization combat these fraud risks today.
- 1 “Occupational Fraud 2024: A Report to the Nations®,” legacy.acfe.com, 2024.