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Fraudulent activities account for billions of dollars lost in the insurance, banking, health care,
retail, transportation, manufacturing, and communications industries each year. Likewise, fraudulent
activity riddles our federal and local governments - virtually every industry is vulnerable to fraud.
The United States General Accounting Office estimates that $1 out of every $7 spent on Medicare is
forfeited to fraud and abuse. Depending on the reference, Medicare loses up to $20 billion dollars
to fraudulent or unnecessary claims each year. The insurance industry estimates that about 25 percent
of each premium dollar is spent on covering fraudulent or inflated claims. This puts the yearly costs
at an estimated $30 billion nationally.
In a recent USA Today article, the identity theft epidemic has affected 27 million people over the last 5 years,
with 10 million in 2002 alone. It is estimated that almost $50 billion has been lost to identify theft.
To put these numbers into perspective, consider that only 69 of the 182 recognized countries in
2002 had a Gross Domestic Product (GDP) over $20 billion. In other words, the losses from fraudulent
activity in the U.S. insurance market alone exceed the GDP for more than half of the world's countries.
These numbers are staggering, especially considering that they are largely paid for by the consumer.
More effective methods must be deployed to minimize these losses. Industry experts estimate that for
each dollar spent on combating fraud, $5 to $15 are saved, depending on the industry being served.
This return-on-investment is also cumulative since it minimizes future losses for the same fraudulent
activities.
Visual Analytics is very active in the fraud-detection marketplace - working with some of the largest
consulting firms (fraud and forensics related) and businesses to help provide new and innovative ways
of combating fraud. The VisuaLinks and DIG technology suites are designed to address the entire
analytical process providing an end-to-end capability to access, analyze, report on and present
results.
Continued on VAI News page
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