Countering Fraud in Student Funding. Fiona Innes Head of Counter Fraud, Counter Fraud Services Department March 2016

Transcription

1 Countering Fraud in Student Funding Fiona Innes Head of Counter Fraud, Counter Fraud Services Department March 2016

2 Content Introduction Background & Structure What we do How we do it Case Studies Consequences Model & Prosecutions Framework Phishing Fraud Triangle Proactive Prevention Stats What you can do Questions

3 Introduction Counter Fraud Services Background Structure

4 CFS Investigations Counter Fraud Services is now made up of 5 individual Investigation Teams, each one aligned to a key business area. Maintenance Loan and Grant Eligibility and Entitlement, Phishing, Identity, Residency Grants for Dependents Child Care, Adult Dependent Grant, Parental Learning Allowance Disabled Student Allowance Non-Medical Helper, Taxi, Equipment, Assessments Institutional & Organised Qualifications, Attendance, Organised Targeting of Learning Provider Repayments Evasion Avoiding Repayment

5 CFS Structure Glasgow Darlington Head of Service Investigations Manager Investigative Assistant Fraud Manager Fraud Analytics Manager Team Manager GFD Team Manager DSA Team Manager Maintenance Loan/Grant Team Manager Repayments Evasion Team Manager Institutional Fraud Sanctions Officer 2 nd Tier Review Officer Senior Analyst Senior Analyst Investigators (6) Investigators (4) Investigators (6) Investigators (6) Investigators (6) Analysts (2) Analysts (2)

6 What do we do? Within Counter Fraud Services we Investigate potential Fraud Analyse confirmed Fraud Review Sanctions Ultimately our goal is to protect customer information and prevent the loss of Tax Payers money.

7 How do we do it? We have established a number of techniques over the years which enable us to Prevent and Detect Fraud, some of these include; Investigative Training for all staff Analytics Fraud Prevention Tools Internal and External Referrals

8 Case Studies Example 1 Marital Status Background In August 2015, SLC s formal appeals team contacted CFS to raise concerns over the marital status of an individual they had been corresponding with. The student had applied for funding as a single person but had provided a Council Taxi bill showing both his name and another individual with the same surname at the home address. Investigation As a result of the referral CFS undertook an investigation and requested evidence from the student. We also checked open source information and found that the individuals Facebook page confirmed that he was married. A formal telephone interview was carried out at a pre arranged time and further evidence gathered. Outcome For providing false marital status information on his application and throughout the CFS investigation, the individual was deemed unfit to receive funding due to misconduct. This resulted in a saving of over 10k.

9 Case Studies Cont.. Example 2 Insider Threat Background In April 2013, CFS Analysts identified a number of Student Loan applications that they believed to be fraudulent. In total, they identified 98 suspect applications that were part of the same group. Initial checks suggested that the applicants themselves were genuine individuals and that there were no indicators of potential identity thefts.. CFS Analysts made enquiries with the College involved and established that the College had no knowledge of any of the applicants, despite 44 of them having had their attendance confirmed. Investigation The matter was reported to the Police and the investigation concluded that an employee of the College, previously known to the Police, along with two others had recruited as many people as they could to create Student Loan applications and using another employees User ID, confirmed attendance and therefore released Student Finance payments. Outcome On Monday 10th August at Southwark Crown Court, Suspect A was sentenced to 2 years imprisonment for his part in this fraud. Suspect B was ordered to carry out 120 hours of unpaid work and given a 6 month suspended sentence. Suspect C was ordered to carry out 120 hours of unpaid work and was told to pay 1000 in compensation. Of the 44 applications that Suspect A confirmed attendance for, 27 received payments totalling 170, Across all 98 applications involved, payments totalling 712, were blocked from being paid.

10 Phishing What is Phishing? Phishing is the term given to a type of fraud which involves a third party ing an individual pertaining to be from an organisation when in fact they are not. The individual, believing the to be genuine, verifies personal information, which allows the third party to amend their online records and redirect money to another bank account. What do SLC do to prevent Phishing? Active account monitoring of previously affected and high risk accounts. Customer text alerts to students whose bank account details have been amended. Duplicate bank details reports monitored daily. Outbound calling to students identified as being at risk of payment diversion. Contacting universities directly if there are specific attacks against their students. Variations of this type of fraud are Vishing This is when individuals call landlines or mobiles in an attempt to make you divulge personal information. Smishing As above, only by SMS via mobiles.

11 Phishing Stats SLC first suffered a major phishing attack in FY 11/12 and since then, the preventative measures put in place, and the steps taken to increase student awareness, have drastically reduced the losses and number of victims affected. 1,800,000 1,600,000 SLC Phishing Volumes Total Lost Total Saved 1,400,000 1,200,000 1,000, , , , ,000 0 Apr Sep Jan Apr Sep Jan Apr Sep Jan Apr Sep Jan Apr Sep Jan 11/12 12/13 13/14 14/15 15/16

12 Consequences Model & Prosecution Framework Consequences Model The Consequences Model used by Counter Fraud Services has been in place for a few years now and ensures we have consistency in our approach to decision making. The model was created based on a Police model used to establish the level of crime committed and for deciding on the appropriate sanction to apply. Prosecution Framework The Prosecutions Framework currently being put together takes the Consequences Model to the next level and will document the options for progressing a confirmed fraud case.

13 Fraud Triangle Fraud generally occurs as a result of a combination of factors. For many years, this has been represented as the Fraud triangle Motivation need or greed? Rationalisation most people obey the law but can rationalise fraud as a victimless crime or it s just a fiddle, not really a crime. Opportunity weak controls, poor security, low likelihood of detection. Motivation Opportunity

14 Proactive Prevention SLC have a number of checks in place that help prevent fraud. Our primary method of identity verification is through the Identity and Passport Service (IPS) link that uses the applicant s passport number to verify the identity details they have submitted. The applicant s National Insurance Number (NINO) is also matched against DWP records. The Verification of Household Income (VHI) checking service allows the income of the students sponsor/s to be validated via HMRC. Once the application has been processed, the University s attendance confirmation provides us with a further check to ensure that the individual is in attendance before the instalments are paid. CFS receive exception cases highlighted as part of the above checks.

15 Proactive Prevention Cont... Fraud Prevention Tools CIFAS CIFAS collates all fraud data from organisations such as Banks, Building Society s, Insurance Company s plus many other financial institutes. The referrals from CIFAS will take priority as they include actual fraud cases, this means any matches we have with this data will be due to the student having committed fraud against another organisation. Electoral Register This service enables us to verify if a customer is living as stated and who else resides at the address given.

16 Stats Since Academic Year 2012/2013, CFS has prevented fraud losses totaling 62 Million. With the recent restructure and increase in capability, we forecast savings of around 20 Million for Academic Year 2016/2017. Total Value Saved 20 Million 14.7 Million 16.7 Million 15.1 Million 15.2 Million 12/13 13/14 14/15 15/16 16/17

17 What Can you Do? Whatever Department you work in, you can do your part to reduce the impact of fraud. You may not realise the part you can play however do not underestimate your involvement in Fraud Prevention. All members of staff and colleagues, have a duty to report suspicions of fraud, both internal and external, and raise concerns where areas of weakness in procedures are identified. HEI s can get involved by reporting any irregularities they become aware of, particularly in relation to: Attendance; and/or Status If you have any concerns relating to potentially fraudulent activity please contact us using either institutional_cfs@slc.co.uk Phone: If you receive a call from a student who has not received their expected funding on the payment date due, and their bank details have been amended without their consent, calls should be put through to the phishing hotline on If a student has received an asking them to verify their personal information by clicking on a link contained within the , this should be passed to phishing@slc.co.uk

18

19 Contact name Fiona Innes Department/Role Counter Fraud Services, Head of Counter Fraud Services phone website