Warranty Fraud Management

Chapter 9Service Agent Fraud Management

Chapter 6 introduced the following types of fraud conducted by service agents:

• Creation of fictitious claims
• Conducting out-of-warranty repairs
• Inflating the price of an existing claim
• Giving overservice or using too many parts
• Using or reselling warranty provider–owned parts
• Using counterfeit or unauthorized parts
• Not doing all the necessary actions under the service contract
• Unnecessary change of parts to minimize effort
• Using unqualified technicians to save costs

Chapter 7 discussed the overall warranty control framework to detect and prevent fraud. This chapter deals with service agent fraud with warranty provider as the victim and looks at methods that assist the warranty provider to detect and prevent fraud. These involve the following elements from the warranty control framework:

• Service agent contract
• Entitlement and repair authorization processes
• Claim validation process
• Analytics
• Material returns control
• Service network management

The link between the control elements and the types of fraud is shown in Tables 9.1 and 9.2.

Table 9.1 Fraud Detection and Prevention Activities against Different Types of Service Agent Fraud to Obtain Extra Revenue

Types of service agent fraud to obtain extra revenue
Creation of fictitious claims	Conducting out- of-warranty repairs	Inflating the price of an existing claim	Giving over- service or using too many parts	Using or reselling warranty provider- owned parts
Service agent contract ...