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Warranty Fraud Management

Book Description

Cut warranty costs by reducing fraud with transparent processes and balanced control

Warranty Fraud Management provides a clear, practical framework for reducing fraudulent warranty claims and other excess costs in warranty and service operations. Packed with actionable guidelines and detailed information, this book lays out a system of efficient warranty management that can reduce costs without upsetting the customer relationship. You'll dig into the whole spectrum of warranty fraud, from simple sloppy procedures to systematic organized crime, and get to know the fraudulent parties, the victims, as well as the objectives and methods of the fraudulent activities in different scenarios. You'll learn how to implement controls to detect and reduce fraudulent claims and decrease the overall warranty costs. The impact of fraudulent claims is plainly spelled out alongside detailed descriptions of typical symptoms and process gaps present in diverse companies. A comprehensive, multi-modal framework for robust warranty management is presented as a template for revamping your own company's strategy.

Fraudulent warranty claims occupy an estimated 3-15 percent of the average company's warranty costs, which generally average between 1-4 percent of sales. Many companies are unaware of the issue or struggle to take action against the claims for fear of upsetting business partners, or because they lack tangible evidence. This book details a robust warranty control framework that institutes transparency and control over the whole warranty chain—supporting the process far beyond just fraud reduction.

  • Understand the different actors (customers, sales channels, service agents, warranty providers, etc.) and different forms of warranty fraud
  • Uncover issues in your company's warranty processes
  • Learn methods to detect and prevent fraudulent activities
  • Implement a robust system of warranty cost control

Warranty fraud is a major cost-control issue for most companies, but the sensitive nature of the topic leaves most reluctant to share their experiences and divulge their strategies. Warranty Fraud Management brings warranty fraud out into the open, and provides a clear, actionable framework for cost-savings through fraud reduction.

Table of Contents

  1. Title Page
  2. Copyright
  3. Dedication
  4. Foreword
  5. Preface
    1. What Has Changed During the Past Twenty Years?
    2. Why Is It so Difficult?
    3. Need for a Book on Warranty Fraud
    4. Focus of the Book
    5. Target Audience
  6. Acknowledgments
  7. About the Authors
  8. Chapter 1: Overview
    1. Warranties
    2. Warranty Servicing
    3. Warranty Costs
    4. Warranty Fraud
    5. Impact of Warranty Fraud
    6. Warranty Fraud Management
    7. Study of Warranty
    8. Goals of the Book
    9. Structure of the Book
    10. Note
  9. Chapter 2: Products and Product Warranty
    1. Products
    2. Product Performance, Failure, and Reliability
    3. Product Maintenance
    4. Product Warranty
    5. Maintenance Service Contracts
    6. Insurances
    7. Notes
  10. Chapter 3: Warranty Servicing
    1. Parties in the Warranty Service Network
    2. Warranty Service Process
    3. Outsourcing of Warranty Service
    4. Contracts
    5. Notes
  11. Chapter 4: Warranty Costs
    1. Different Perspectives
    2. Factors Underlying Warranty Costs
    3. Warranty Cost Metrics
    4. Warranty Reserves and Accruals
    5. Warranty Cost Control
    6. Notes
  12. Chapter 5: Warranty Management
    1. Evolution of Warranty Management
    2. Service Life-Cycle Perspective
    3. Product Life-Cycle Perspective
    4. Organizational Structure
    5. Warranty Management Systems
    6. Warranty Management Maturity Models
    7. Notes
  13. Chapter 6: Warranty Fraud
    1. Fraud in General
    2. Actors and Victims of Warranty Fraud
    3. Classification of Warranty Fraud
    4. Fraud Patterns
    5. Consequences and Impacts of Warranty Fraud
    6. Customer Fraud
    7. Service Agent Fraud
    8. Sales Channel Fraud
    9. Warranty Administrator Fraud
    10. Warranty Provider Fraud
    11. Notes
  14. Chapter 7: Warranty Control Framework
    1. Contracts
    2. Transaction Controls
    3. Analytics
    4. Service Network Management
  15. Chapter 8: Customer Fraud Management
    1. Customer Contract
    2. Customer Entitlement
    3. Material Returns Control
    4. Analytics
    5. Notes
  16. Chapter 9: Service Agent Fraud Management
    1. Service Agent Contract
    2. Entitlement and Repair Authorization Processes
    3. Claim Validation Process
    4. Analytics
    5. Material Returns Control
    6. Service Network Management
    7. Notes
  17. Chapter 10: Fraud Management with Other Parties
    1. Sales Channel Fraud Management
    2. Warranty Administrator Fraud Management
    3. Warranty Provider Fraud Management
  18. Chapter 11: Structures Influencing Warranty Fraud
    1. Effective Service Process
    2. Service Organization
    3. Notes
  19. Chapter 12: Implementing a Warranty Control Framework
    1. Assessing The Current Situation
    2. Crafting an Improvement Plan
    3. Defining Policies and Rules
    4. Building the Capabilities
    5. Deploying the Change
    6. Business Case Considerations
    7. Implementation Challenges
    8. Achieving the Transformation
  20. Chapter 13: Epilogue
    1. Opportunities to Improve Warranty Control
    2. New Research into Warranty Fraud
  21. Appendix A: Detailed Claim Data
  22. Appendix B: Agency Theory
  23. Appendix C: Game Theory
  24. Glossary
  25. Acronyms
  26. References
  27. Index
  28. End User License Agreement