fraud overview presented by: ian moore, fraud analyst may 20, 2008

Fraud Overview

Presented by:Ian Moore, Fraud Analyst May 20, 2008

© 2008 Wright Express. All Rights Reserved. Proprietary and confidential.2

Objective

The primary objective of the Fraud group is to

reduce financial risk resulting from fraud

activities to our customers, our partners, and

Wright Express. This is accomplished

through prevention, detection, and

management of abuse and fraud activities.


Overview

Prevention:

Training and education are mission critical.

Provide consulting on card security best practices, front line defense tactics, and the red flags of fraud.

The customer

Customer service representatives

Credit analysts

Activation associates

Account managers

Sales representatives


Overview Cont’d

Detection:

Transaction or velocity monitoring is mission critical.

High volume activity

High dollar transactions

High crime areas

Activity at “hot spot” merchants

Excessive pay-at-the-pump activity

New account activity


Overview Cont’d

Case Management:

Servicing the customer and appropriately assessing liability are mission critical.

Risk mitigation

Customer communication

Analysis of case components

Legal consideration and interpretation of facts

Tracking database

Reporting


Leveraging Strengths

Team of Fraud professionals

Portfolio-specific assignments

Experience and expertise

Customer focus

Extensive network of industry contacts

Industry association memberships


The Team

Cam eron TiedjeF ra u d A n a lys t II

Erica PerronF ra u d A n a lys t II

Anthony KlineD isp u te & Ch a rge b a ck A n a lys t II

M asterCard Fraud

Erin ColeF ra u d A n a lys t II

David DayeF ra u d A n a lys t II

Joyce M ichaudF ra u d A n a lys t II

Ed DunnF ra u d A n a lys t II

Nate MorrillF ra u d A n a lys t II

Sandy Plum m erF ra u d A n a lys t I

Ian MooreF ra u d A n a lys t I

Sarah OuelletteF ra u d A n a lys t I

M argaret CrandallF ra u d A n a lys t I

Tracey M elodyT e a m L ea d e r, F lee t Fra u d S e rv ices

Fleet Card Fraud

Lynn AlexanderM a n ag e r, F ra ud S erv ices

Peter ConnollyV ice P re s ide n t, S tra te g ic A cco un ts an d P o rtfo lio R isk S erv ices


Fraud Trends 2008

• Record high, volatile PPG makes fleet card programs a target of both criminal enterprises and opportunists alike

• Fleet drivers, who may be struggling to personally absorb high PPG, more likely to misuse or abuse card privileges

• Average vehicle owner more likely to accept a “deal” from someone selling gas at a discounted rate

• Fuel-related thefts and fraud receiving national attention

• Application fraud on the rise – higher commercial credit lines (versus consumer) more lucrative and appealing to perpetrators.

• Websites providing instruction on how to perpetrate commercial loan fraud

http://www.youtube.com/watch?v=7Gyaac2-1s4 http://www.youtube.com/watch?v=x8m-cjllYcE http://www.youtube.com/watch?v=4sMxKWnmVv4

http://www.youtube.com/watch?v=7Gyaac2-1s4



http://www.youtube.com/watch?v=x8m-cjllYcE



http://www.youtube.com/watch?v=4sMxKWnmVv4




Fraud Trends 2008 Cont’d.

• Increasingly, retail fueling locations carry items such as electronics and department store gift cards, cell phones, etc. which are attractive to fraudsters

• More opportunity to turn fuel card into cash

• Opportunists are striking harder than ever, e.g. collusion and merchant abuse


Partnership

Wright Express’ Fraud Department makes every effort to detect unusual or excessive purchase activity using constantly evolving techniques. However, we are not positioned to be able to detect all misuse, abuse, or violations of your internal policies.

Our efforts used in tandem with your internal controls and use of our exception reporting, authorization controls, and online products can substantial reduce exposure to abuse and fraud, and any associated losses.


Prevention Techniques

One critical key to preventing misuse is establishing top-down accountability.

Make sure those responsible for administration are ordering and maintaining an inventory of cards accurately by performing periodic audits

Each driver should be assigned a unique Driver Identification Number (DIN) that is to be kept strictly confidential

Avoid the use of a “spare” or generically assigned DIN to remove the cover of anonymity


Prevention Techniques Cont’d.

Establishing DINs

Assign one DIN per driver

Assign random DINs as opposed to social security numbers or employee numbers

Assign six-digit DINs as opposed to four-digit DINs

Avoid easily guessed DINs, such as “1111” or “1234”



Keep DINs Secure

Require drivers to memorize their DINs; DO NOT keep cards and DINs together or write the DIN on the card

Drivers should avoid giving a DIN to a station attendant and should insist on entering the number without the help of the attendant

Drivers should not use the DIN or any variation of the DIN as the odometer entry



Immediately report driver and/or vehicle changes

If a vehicle is transferred, sold, or retired, immediately cancel the appropriate card

If a driver leaves or is dismissed, be sure to:

• Cancel his or her DIN immediately

• Retrieve his or her card

• Verify that all other cards are in their appropriate locations



How can WEX help prevent misuse of the program?

Authorization Controls

Purchase Alerts

Real-time Authorization Data

Customized Exception Reporting



Purchase Alerts

Purchase Alerts are simply the fastest way to put a stop to any misuse or abuse of your card program.

Keep a close watch on your purchases — both fuel and service (where applicable) — and quickly address any unauthorized purchases. Utilize Purchase Alerts to start receiving an email notification when a card has violated one of the purchase guidelines you set on your account. Using WEXOnline®, specify purchase guideline parameters at the account level, or go further and put specific guidelines on individual cards.

When you receive an alert, simply log in, review the details and decide what action to take.



Purchase Alerts cont’d

Specify what transactions you want to be alerted to:

• Multiple Transactions per Day

• Out-of-State Transactions

• Off-Hours Transactions

• Day of the Week

• Dollars per Day

• Dollars per Transaction

• Gallons per Transaction

• Fuel Type



Authorization Controls

With more than 99.8% of Wright Express card transactions at fuel merchants processed electronically, control over these purchases is directly in your hands. Using the Profile Manager in WEXOnline® you can help prevent unauthorized purchases by setting rules for how much your drivers buy, how often and when. If a transaction exceeds any of your limits, our system is designed to decline the transaction, subject to the limitations described in Profile Manager.



Authorization Controls cont’d

We offer five different types of limits:

• Daily Dollar Limit*

• Daily Number of Transactions (per card, per day)

• Transaction Dollar Limit*

• Day of Week

• Time of Day

* Some restrictions apply.



Exception Reports

Many fleet managers find that the Exception Report is their most valuable tool in the monthly report package. Here is where you’ll find any irregularities, possible misuse, or abuse. For example, if your fleet’s vehicles only travel between the hours of 7 a.m. to 6 p.m., you would want to investigate a transaction that occurred at 10 p.m.

Exception reporting is available on demand using WEXOnline. You can run queries to look for irregularities with transactions as they post to your account. Information is available for the current month, plus the previous twelve months so you can easily look for purchasing patterns or trends across time.



Exception Reports cont’d

We set up your account with default limits on your Exception Report:

• Cost per fuel transaction - $70 / transaction

• Fuel types – regular unleaded (including alcohol blends)

• Number of fuel transactions per day – limit one transaction

• Monthly gallons per vehicle – 150 gallons/vehicle/month

You can change these limits at any time, as well as add others from a comprehensive list.



Authorization Activity

Wright Express has added the availability of real-time authorization data on WEXOnline®.

Powerful querying tools allow you to view:

• Up to four calendar days worth of authorization requests

• Fuel or service merchant authorization requests

• Approved or declined transactions

fraud overview presented by: ian moore, fraud analyst may 20, 2008

Documents

wright express

fraud overview

fraud activities

fraud trends

fraud group

fraud analyst

team slide

red flags of fraud