1. Health Insurance Fraud Focus Group
Matthew Michael
Head of Fraud
March 2015

2. Health Insurance Fraud Focus Group
Agenda
About Veda
Veda’s Fraud Insights
Health Insurance Fraud Focus Group
Veda’s Fraud & Identity Solutions
Proof Of Concept
Health Insurance Fraud Focus Group

3. About Veda

4. At Veda, data is our business. It’s at the heart of what we do
About Veda
At Veda, data is our business. It’s at the heart of what we do
We are passionate about accumulating and transforming data into meaningful insights to empower our customers to make great decisions.
Veda is a data analytics company and the leading provider of credit information and analysis in Australia and New Zealand.
The intelligence provided by Veda helps customers make decisions on credit risk, verify identity and employee backgrounds, reduce identity theft and fraud, and undertake digital marketing strategies.
Veda is built on the largest, most comprehensive and current data source in Australia and New Zealand with information on over 20 million credit active people and 5.7 million commercial entities.
Health Insurance Fraud Focus Group

5. Veda’s Business Enabling customers to improve their decision making
Veda proprietary/exclusive data sources
Credit information on 20 million individuals
70 million updates on individuals per annum
46 years of historical data and 5 years of enquiry data
Credit information on over 5.7 million commercial organisations
Inivio consumer insights library
2.7 million records in tenancy database
Insurance claims database
5 years worth of defaults from hundreds of businesses
Proprietary data assets
Intellectual property and data management
Products and delivery channels
Customer focus
Products and solutions
Embedded portals and customer links
>12,500 business customers
Public data sources
Land titles and property information database
Personal Property Securities Register in Australia
Largest repository and reseller of ASIC information
Comprehensive court judgment default collection
>450,000 consumer customers
Products and solutions
Embedded portals and customer links
Data collection and storage
Data cleansing
Algorithms
Matching
Marketing Data & Analytics
Public data sources
Privacy compliant data partners
Strategic Partnerships
Predictive Modelling and Segmentation
>14m consumer audience
>2.2m business
audience
Attractive combination of data assets built up over a 47 year history
Powerful intellectual property/analytics
Embedded delivery systems and long-term customer relationships
Health Insurance Fraud Focus Group

6. Commercial Risk & Information Services
Business Overview
Consumer Credit Risk: credit bureau business that provides consumer credit reports & analytics to assess, monitor and manage credit risk
Fraud & Identity Solutions: helps validate identities and detect fraud
Decisioning & Scoring: assists customers in making credit decisions based on an applicant’s risk profile.
Collection Services: assists customers to segment and optimise debtors to improve receivables management
Verify: provides an employee verification service for employees
Consumer Risk
& Identity
Commercial Credit Risk: provides credit reports, payment behaviour and ongoing credit monitoring for lending purposes and assessing supplier risk.
Commercial & Property Solutions: the access of third party data sources from ASIC, ITSA and Property registers.
Commercial Risk & Information Services
Health Insurance Fraud Focus Group

7. Business Overview Business-2-Consumer Marketing Services
Your Credit & Identity: providing consumers with access to their personal credit information and VedaScore as well as the ability to receive updates to their credit profile when changes are made.
Secure Sentinel: Helping consumers protect themselves against identity theft and assisting them in recovering their lost or stolen items.
Car History: providing the history of a used car for consumers and car dealers. Highlights if a vehicle has finance owing, is stolen, written off, or has had the odometer rolled back.
National Tenancy Database: tenancy verification and identification service
Business-2-Consumer
Inivio provides marketers with a range of services, tools and capabilities that maximise their marketing effectiveness. Helping them to target their most valued customers across all their marketing channels, when they are most open to an offer
Smart data driven marketing - turning data into actionable insights. Offering a range of data services including data warehousing, web analytics, and media attribution in the development of smart data driven campaigns.
Marketing Services
Health Insurance Fraud Focus Group

8. International Footprint
With global Comprehensive Credit Reporting (CCR) experience
Home Markets
UK: International CR consulting experience in partnership with IRP (International Risk Partnership)
Australia
New Zealand
Existing Int’l Markets
Singapore
Malaysia
Cambodia
Saudi Arabia
Myanmar
Cambodia
Saudi Arabia
Sri Lanka
Malaysia
Singapore
Indonesia
Markets in Development
NZ: Veda is live with CR data in NZ
Sri Lanka
Indonesia
Myanmar
Australia
AU: Extensive CR Pilot study with 10 lenders to model & simulate impacts
New Zealand
Health Insurance Fraud Focus Group

9. Veda’s Fraud Insights

10. What is fraud?
How is it defined?
• Any conduct where an individual is obtaining or attempting to obtain an advantage from a service provider by any statement, omission, promise or conduct that is (deliberately or recklessly) misleading, false or deceptive; or
• Reasonable suspicion that an individual is obtaining or attempting to obtain an advantage from a service provider by any statement, omission, promise or conduct that is (deliberately or recklessly) misleading, false or deceptive; or
• Suspected activity involving any form of identity theft or attempted identity theft or misrepresentation of identity or any other matters; or
• Fraudulently evading or attempting to evade obligations to a service provider by any statement, omission, promise or conduct that is (deliberately or recklessly) misleading, false or deceptive.
Health Insurance Fraud Focus Group

11. Fraud In The Health Sector
Australian Medicare fraud revealed in new figures
7 Mar 2014
The Department of Human Services says its hotline has received 1,116 Medicare-related tip-offs since July 1, Officers have investigated 275 cases, which has translated into 34 cases submitted to the Commonwealth Department of Public Prosecutions and 12 convictions. The value of those 12 cases adds up to an estimated $474,000, with fraudsters ripping off an average of almost $40,000 each.
Other cases uncovered by the ABC include:
Former police officer Matthew James Bunning has been charged with 146 Medicare frauds between 2011 and Investigators allege the 46-year-old removed Medicare slips from rubbish bins behind Medicare offices around Melbourne to produce forged receipts and illegally claimed more than $98,000 from the Government.
In January last year Korean student Myung Ho Choi was sentenced in a NSW district court to five years in prison for a series of fraud and identity theft charges that included receiving at least five paper boxes filled with blank Medicare cards intended for use in identity fraud.
In August last year NSW man Bin Li was sentenced in district court to seven years in prison for charges that included possessing almost 400 blank cards, including high quality Medicare cards, and machines for embossing cards.
Nilay Patel, a former US-based certified specialist in healthcare compliance and law tutor at Swinburne University of Technology, says the fraud figures are the "tip of the iceberg".
He says Australia is falling behind the United States at preventing, detecting and prosecuting healthcare frauds.
"The safeguards [in Australia] are quite inadequate, the detection is more reactive that proactive and whatever proactive mechanisms that are there I think they are woefully underdeveloped," he said.
… DHS received 1,116 Medicare-related tip-offs .... investigated 275 cases …. 34 cases submitted to the DPP …. 12 convictions …. value of an estimated $474,000 …. fraudsters ripping off an average $40,000 each.
Health Insurance Fraud Focus Group

12. Fraud & identity theft - the numbers tell the story
Market trends in Australia
$1.4B $ $ $
27% $ $ $ $ $ $ $ $
Credit application fraud highest level since 2009
increase in 12 months from
Estimated annual fraud loss by Australian businesses
2007
2013
103%
26%
89%
Percentage of identity fraud using stolen identities
Percentage of identity fraud using stolen identities
Rise in use of identity takeover
Health Insurance Fraud Focus Group

13. Identity Takeover Breakdown
Drivers Licences and Personal Information continue to be the primary pieces of information used in identity takeover cases
Health Insurance Fraud Focus Group

14. Fraud In The Health Sector
Hacking & cybercrime are an ever present danger
Health Insurance Fraud Focus Group

15. ThreatMetrix Cybercrime Report
The report is based on actual cybercrime attacks detected by the ThreatMetrix Global Trust Intelligence Network
The report provides a front-line view of the global war against cybercriminals during real-time evaluation of payments, logins and registration attempts
The data used draws upon a sample of one billion transactions analysed by the network and provides a representative summary of activity from Q
Health Insurance Fraud Focus Group

16. Attacks as a Percentage of Total Transactions
Organised Cybercrime relies on exploiting anonymity and avoiding prosecution.
Device Spoofing and IP spoofing are at the top of the list: hackers don’t want fingerprints left behind
MiTB and Bots score lowest in attack percentages but are most malevolent attacks
Health Insurance Fraud Focus Group

17. Transaction Types and Related Attacks
57%
Health Insurance Fraud Focus Group

18. Mobile vs. Desktop by Transaction
By Transaction Type
Mobile device-based commerce represented 25% of all transactions and is growing
Mobile payments also accelerating
Health Insurance Fraud Focus Group

19. Mobile vs. Desktop Attacks
By Transaction Type
Mobile Account Creation represents a disproportionately large share of transactions (40%) and attacks (5.2%)
Health Insurance Fraud Focus Group

20. Mobile Transactions and Attacks
iOS generates nearly twice the number of payments, logins and authentications of the other mobile operating systems combine
Health Insurance Fraud Focus Group

21. Health Insurance Fraud Focus Group

22. Health Insurance Fraud Discussion
Summary of Attendees
As a result of Veda’s experience with fraud detection services, discussions were held with a number of health insurance providers
The first Health Fraud Focus Group Forum was held on 9 October 2014 at the Veda’s office’s in North Sydney
The second Health Fraud Focus Group Forum was held on 11 December 2014 at Veda’s Melbourne, Sydney & Brisbane offices
The health insurance providers that form the Health Fraud Focus Group are:
Health Insurance Fraud Focus Group

23. Health Insurance Fraud Discussion
Summary of outcomes
A number of fraud & identity issues were discussed and ranked in order of importance. The top 4 issues as agreed by the attendees were:
Unsure if dealing with fictitious or stolen identities
Threats of cybercrime
Lack of visibility of other fraud incidents across the industry – is there a common trend?
Fake and exaggerated claims and lack of visibility of other fake claims across the industry – is there a common trend?
Health Insurance Fraud Focus Group

24. Health Insurance Fraud Discussion
Potential Solutions
Issue:
Potential Solution:
Unsure if dealing with fictitious or stolen identities
Threats of cybercrime
Lack of visibility of other fraud incidents across the industry – is there a common trend?
Fake and exaggerated claims and lack of visibility of other fake claims across the industry – is there a common trend?
Electronic identity verification at time of member on-boarding using IDMatrix
Monitor on-line behaviour and create defence using ThreatMetrix device intelligence
Collect health insurance fraud data into a central repository using Veda’s existing fraud solutions
Collect health insurance claim data into a central repository and apply Veda analysis tools to reveal potential fraud
Health Insurance Fraud Focus Group

25. Who is committing this fraud?
Examples
Financially stressed individuals acting on their own Individuals wanting to maintain a lifestyle that is otherwise unaffordable Product sales people seeking commission / reward for signing more new business Rogue insiders who understand loopholes receiving pay- offs from outside parties Organised fraud rings
Health Insurance Fraud Focus Group

26. Veda’s Fraud & Identity Solutions
Health Insurance Fraud Focus Group

27. Veda’s Holistic Approach To Fraud & ID Management
Using data and technology to determine assurance level of an identity
Actively manage risks:
Prevent identity fraud
Detect criminal syndicates
Minimise the risk via the online channel
Real time risk assessment 
Your customers, your rules, your decisions
Identity Verification
Consumer Credit
Insurance Claims
Commercial Credit
Public Records
National Tenancy
Historical Electoral Roll
Historical phone
Veda Public Phone
Current Electoral Roll
PEP & Sanctions screening
Driver’s licence
Passport
Medicare card
Visas
Marriage & birth certificate
Fraud Assessment
Device intelligence
Shared Fraud Database
Velocity assessment
Phone association
Phone verification
Knowledge Based Authentication
Custom black / white lists
Assess fraud risk using current, historical & predictive information
KBA
KYC
Verify the identity
Generate questions about the identity
Verify the identity belongs to the applicant
Health Insurance Fraud Focus Group

28. Utilising Veda’s Data In Identity Verification
Demonstrate the identity is legitimate & operates in the community
Veda’s approach:
Check social footprint together with validating documents are authentic
Triangulate all results
Not subjective – apply rules in consistent manner
Exclusion datasets include Shared Fraud Database and custom black-lists
Continual assessment of verification data sources
No need to store copies of sensitive documents
Datasource
Number of records
Name
Address
DOB
Consumer Credit
16 million 
Insurance Claims
10.5 million
Commercial Credit
3.7 million
Public Records
3.5 million
National Tenancy
1.2 million
Historical Electoral Roll
80 million
Historical phone
Veda Public Phone
8 million
Current Electoral Roll
14.1 million
Birth certificate
Marriage certificate
Australian passport
DIAC Visas
Driver’s licences
Medicare
Health Insurance Fraud Focus Group

29. Utilising Veda’s Data In Identity Verification
Evidence that links the applicant to the claimed identity
Knowledge Based Authentication is a type of verification that uses out-of-wallet knowledge questions to verify an individual’s identity:
Questions are generated dynamically
No established relationship is required with your applicants
Breaks predictability for fraudsters
KBA
KYC
Verify the identity
Generate questions about the identity
Verify the identity belongs to the applicant
Health Insurance Fraud Focus Group

30. How do lenders in Australia minimise risk of fraud?
Tackling fraud as a community
Over 70 members sharing experiences & intelligence on investigated fraud incidents. Fraud Forum conferences & Roundtables events
From that, we identify $1 billion is fraudulent
Veda processes $1 trillion of credit application year
90% of fraudulent applications appear credit worthy
Fraud frequently is mis-categorised as bad debt
The most effective approach to tackle fraud is to tackle it as a community
Fraud Focus Group
Shared Fraud Database
Database of fraud incidents. Prevents systematic re-use of fraudulent application details
Shared Fraud Database
Fraud data includes:
credit card, personal loan, mortgage fraud incidents; data from law enforcement agencies; suspect records identified by Veda.
Additional intelligence
Members provided with data statistics and mitigation optimisation strategies
On-going monitoring
On-going alert monitoring for 60 days from initial check
Health Insurance Fraud Focus Group

31. Veda Fraud Focus Group 1. Fraud Focus Group 2. FraudCheck
70+ Fraud Focus Group Members including financial services & telecommunications organisations
2 Conferences Per Annum & 3 Round Tables Per Annum
Members are provided with data statistics and mitigation optimisation strategies
1. Fraud Focus Group
A database containing de- personalised verified application fraud incidents
Fraud incidents are provided by all Fraud Focus Group members
Contribution to the database is a fundamental principle of the group
Fully automated service (via XML) or available online
2. FraudCheck
Utilises the FraudCheck data
Ongoing monitoring service
Will continue checking applications 60 days after an initial FraudCheck
3. FraudWarning
Information stored in the Shared Fraud Database:
Current & Previous address
Drivers License Number
Passport number
Home Phone Number
Mobile Phone Number
Employer Name
Employer Phone Number
Guarantor Phone Number
Referee Phone Number
Fraud Type
Health Insurance Fraud Focus Group

32. Our Members
+ 65
Health Insurance Fraud Focus Group

33. Connect The Meaningful Patterns
Listing Party & Details
Listing Elements
FFG Member Hits GE
Sept 26
Suncorp
(Occurred August 29)
Mortgage via Broker
Personal Loan via Branch
Listed September 3
Employer phone:
CBA
Sept 20
DL:
Mercedes
Sept 13
Waterview Place Docklands VIC
ANZ
(Occurred July 22)
Suspect Personal Loan via Branch
Listed September 6
Optus
Sept 11
BMW
Sept 5
Health Insurance Fraud Focus Group 33

34. Delivering on the promise
Health Insurance Fraud Focus Group 34

35. Providing an Integrated Layered Defense
Health Insurance Fraud Focus Group

36. Veda and ThreatMetrix Customers Working Together
Health Insurance Fraud Focus Group

37. Health Fraud Focus Group Proof of Concept

38. Phase 1 - Fraud Information Sharing
Pilot approach
Phase 1 - Fraud Information Sharing
3 month duration with an option to extend for a further 3 months
This also includes membership to the Veda Fraud Focus Group allowing access to the Shared Fraud Database
Phase 2 – Claims Analysis
To be scoped at the conclusion of Phase 1
Health Insurance Fraud Focus Group

39. Pilot– Enquiry Process
The Health Insurance Provider creates a weekly batch file of claims
Provides the file to Veda
Veda washes claims against the Shared Fraud Database
Veda provides fraud alerts to investigate
Health Insurance Provider advises outcomes of the fraud alerts to Veda
Health Insurance Fraud Focus Group

40. Pilot– Listing Process
Health Insurance Provider identifies a fraud
Completes the FraudCheck listing template
Sends FraudCheck listings securely to Veda
Veda uploads data to the SFD
Health Insurance Fraud Focus Group

41. Pilot overview
Veda has designed the process to minimise impact to both the day-to-day operations and IT operations of the participants.
Veda has deployed a hosted web portal service which can be accessed through any standard web browser. This will eliminate the need for any IT integration work.
Veda will setup each participant with user names and logins
New customer application or claims submitted
Data is uploaded to the fraud system web portal
Case Management for
Investigations Team
Fraud List Matching:
Local
FFG National
Health FFG National
Flexible Rules Engine
External Data Sources
List Management
Virtual Investigations Team
Analytical Input
Health Insurance Fraud Focus Group

42. Thankyou!
Health Insurance Fraud Focus Group