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Pondera FraudCast

Welcome to the Pondera FraudCast, a weekly blog where we post information on fraud trends, lessons learned from client engagements, and observations from our investigators in the field. We hope you’ll check back often to stay current with our efforts to combat fraud, waste, and abuse in large government programs.

How Startups Benefit Government

How Startups Benefit Government

What a delight it was to read a commentary in Government Technology magazine by Rebecca Woodbury, a Senior Management Analyst with the city of San Rafael, California. In the article, Rebecca recounts her experiences working with technology startups and the benefits to the city of moving beyond a small set of traditional providers.

Rebecca argues that startups offer “simple and intuitive interfaces, don’t require costly implementation fees or long-term contracts, embody the spirit of continuous improvement, and have their eyes keenly on the future.” She goes on to state that these benefits are far more important than “the number of years a company has existed or the number of clients they have.” And she even provides ways to mitigate the risks associated with startups such as avoiding long term contracts.

Right on Rebecca! While Pondera is no longer considered a startup and we can meet the stringent financial and customer qualification requirements in public sector bids, we work hard to hold on to the EXACT list of benefits Rebecca articulated. And when Pondera was a startup, we counted on people recognizing those benefits. That’s why we would get so frustrated when we would read RFPs that asked for “innovative solutions” but required that they be implemented for at least five years! In the age of cloud computing and Agile development, the gap between business needs and archaic procurement policies has grown into a gaping canyon.

So, at the risk of inviting competitors into our market, I applaud Rebecca’s efforts and those of similar public servants who recognize that nimble, innovative startups offer compelling alternatives to large, established IT companies. I also know that competition makes all companies better. In the end, isn’t that what government wants in its partners?
Nigerian Email Fraud

Nigerian Email Fraud

In December, a 67-year-old Louisiana man was charged with 269 counts of money laundering for serving as a middle man in a Nigerian Internet scam. These scams, which everyone with an email account has encountered, promise large sums of money from inheritance or from a “prince” trying to leave the country in exchange for your financial information. Typically, they then require you to send money to release the funds and the operation continues to run into obstacles for which more money is required.

When I receive these emails, I’m always struck by just how ridiculous the stories are. They are so obviously fake that only the most naïve would lend them any credence. Given the sophistication of some of the fraudsters we combat at Pondera, I’ve always wondered why these clearly unsophisticated scammers can’t put out more believable emails.

After a bit of research on the subject, it turns out I’m the unsophisticated one. In fact, Microsoft Researcher Cormac Herley wrote a thought-provoking paper on the Nigerian Scams that concludes in part “By sending an email that repels all but the most gullible, the scammer gets the most promising marks to self-select, and tilts the true to false positive ratio in his favor.” So, like any good salesperson would do, the scammers are essentially feeding only the best leads into their pipeline and eliminating the poor leads early in the process so they don’t waste time pursuing them.

Pretty brilliant actually, if you’re in to despicable crimes. And the results show it. The FBI’s Crime Complaint Center says that over the past five years it has received an average of 280,000 complaints and, more importantly, it estimates that victims have lost over $4.6 billion in that time. In the most extreme cases, victims were lured to Nigeria, held against their will, and extorted for additional money.

If you’re interested in reading more about this, check out Mr. Herley’s paper at the link below:

https://www.microsoft.com/en-us/research/wp-content/uploads/2016/02/WhyFromNigeria.pdf
Skimmer Fraud

Skimmer Fraud

I read with great interest a recent article about card skimmers that were found at “The Stop and Shop” gas station where I often fill up my tank. While they were discovered relatively quickly, more than a dozen customers were scammed. Several of them had their entire bank accounts wiped out.

Skimmers, for those of you that are not aware, are malicious card readers that take data from your credit or debit card’s magnetic stripe. The data is stored on a drive where it is stolen, requiring the fraudsters to return to pick up the data files. They can then clone your card or just steal directly from your accounts. What makes them so effective is that the skimmers don’t interfere in the actual transaction, making you think that you’re just filling up your tank like you have hundreds of times before.

Turns out that skimmers are growing both in popularity and sophistication. Through the first half of last year alone, skimmer use grew 21% which was on top of high growth rates the year before. In Florida, authorities found 315 skimmers during this time period, triple the number found in the same period the previous year. Considering that 29 million people use credit or debit cards to pay for gas every day, this is certainly a rich target market for fraudsters.

To take advantage of this opportunity, fraudsters continue to improve the skimming devices. They are now almost undetectable by the average citizen. So what do we do to keep our information safe? Authorities suggest visually scanning the card readers for anything unusual, tugging on the reader to see if it is loose, and checking for forced entry into the pump itself. There are even smartphone applications that use Bluetooth to help discover skimmers. Of course, you can also simply pay the attendant for your gas.

This is just one more case of honest people being inconvenienced, at best, or ripped off, at worst, by tech-savvy fraudsters. And because the use of skimmers is sure to increase over the next several years, we all may want to think twice about “paying at the pump”.

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About Our Company

Pondera leverages advanced prediction algorithms and the power of cloud computing to combat fraud, waste, and abuse in government programs.



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  • Sacramento Address: 80 Blue Ravine Road, Suite 250, Folsom, CA 95630

  • Phone: (916) 389-7800

  • Email: info@ponderasolutions.com