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Attacking Subscription Fraud with Identity Resolution

Friday, February 26th, 2010

By Mike Shultz, Infoglide Software CEO

In March 2006, the Communications Fraud Control Association (CFCA) estimated that annual global fraud losses in the telecom sector were between $54 billion and $60 billion, and the losses continue to be substantial. Many types of fraud have been identified, but by far the most prevalent is subscription fraud.

A new subscriber signs up for mobile service using false or stolen identification, with no intention of paying the bill. Since new subscribers are given a grace period of one to three months before the account is shut off, the criminal can make thousands of dollars worth of calls before being detected.

Subscription fraud can be difficult to differentiate from simple bad debt when genuine customers are unable to pay. It’s been estimated that 30% or more of all bad debt is actually subscription fraud.

Different solutions have been tried yet fraud continues to be a problem. One common method is to look for patterns of use that suggest potential fraud, but criminals adapt and learn to probe the limits of these fraud detection systems fairly quickly.

Given the industry’s long history with fraudsters, it seems probable that enough is known about them that they could be spotted at the time they subscribe.  Using similarity searching technology, would-be fraudsters can be vetted against lists of known bad actors. Using multiple public and private data sources, non-obvious relationships can highlight risky individuals, and they can then be asked to submit to a more thorough qualification process.

Identity resolution is already used across multiple industries to solve similar problems. By matching an individual’s attributes with common attributes associated with those committing fraud, the “bad guys” are being detected in areas like lottery fraud, fusion centers, insider trading, and workers’ compensation employer fraud. Part of finding the bad guys is finding hidden relationships, connections that often uncover rings of criminals.

The “birds of a feather” axiom predicts that subscription fraud criminals often share the same types of social networks. Applying identity resolution to subscription fraud problem may be the way to finally solve it.

Identity Resolution Daily Links 2010-02-13

Saturday, February 13th, 2010

[Post from Infoglide] Architectures for Entity Resolution

“In the last post we looked at a formal model for describing entity-based integration. Now let’s turn our attention to how entity resolution (ER) systems are actually implemented.  One of the most important design decisions is whether the system will perform entity identity management.  Systems perform identity management when they create and store the attributes values for the identities that they process.”

tdwi: IBM and Informatica Acquire MDM Capabilities

“The two acquisitions focus the spotlight on two of the hottest functions today, in terms of user organizations adopting them, namely: MDM and identity resolution. More than ever, organizations need trusted data, in support of regulatory reporting, compliance, business intelligence, analytics, operational excellence, and other data-driven requirements. MDM and identity resolution are key enablers for these requirements, so it’s no surprise that two leading vendors have chosen to acquire these at this time.”

PoliceGrantsHelp.com: Building fusion centers for the next decade

“Serrao says that in the time he has spent in a dozen different fusion centers in the United States — coupled with his own background in law enforcement — he’s gleaned several ‘best practices’ for consideration. Ideally, he says, leadership should ’set a specific strategic mission before the center is even built. Everything else follows. Determine the role of the center and whether strategic intelligence analysis will be part of the mix. Then, it will be easier to define what processes will be developed, what reporting mechanisms are needed, what technology is appropriate, and what types of personnel are needed.’”

Prudent Press Agency: Kansas Takes Action Against Lottery Fraud

“The state of Kansas has been conducting sting operations to prevent this kind of theft by lottery terminal clerks. Law enforcement agents fanned out across the state and presented ‘winning’ tickets at several retail lottery outlets. In five separate cases clerks told the agents the tickets were worthless and then tried to redeem the ‘winning’ lottery tickets. The undercover investigation led to charges of attempted theft and computer crime against five people across the state.”

Identity Resolution Daily Links 2009-12-21

Monday, December 21st, 2009

By the Infoglide Team

Citizen-Times: Lawmakers to mediate spat over Iowa Lottery security

“The investigation began after questions arose about a northwest Iowa store clerk who won the lottery six times in 12 months, collecting $264,000. The ombudsman’s report, called ‘Taking Chances on Integrity,’ included 60 recommendations for changes in lottery procedures and policies.”

Cheap Mommy: EHR Savings Go Beyond Time and Money

“The national government will pump billions of dollars into the transfer of medical records to electronic data in order to improve medical care and communications. Doctors, drugstores, hospitals and insurance companies will be more efficient with the utilization of electronic medical information. They will be able to exchange data instantaneously through electronic health networks, saving time and reducing the frustration of patients. Having electronic files can also guarantee greater privacy than hard-copy records. E-files can monitor exactly who has access to your medical data and log when it is accessed.”

SFGate: Forecast calls for more clouds in computing

Cloud computing certainly had mindshare and now, for many people, it has credibility,’ said Ray Valdes, analyst with Gartner Research. ‘A lot of the initial anxieties have faded.’ Gartner ranks cloud computing its top strategic technology area for 2010 and forecasts that revenue will grow from about $56.3 billion in 2009 to $150.1 billion in 2013.”

[Wes Richel] Gartner:Simple Interop: The Health Internet Node

“The goal here is to establish a framework for secure communications among healthcare organizations and between healthcare organizations and patient/consumers. Although we propose some specific uses (protected email and transactions among EHRs) our premise is that the framework will support a much broader set of use cases and Internet technologies.”

Identity Resolution Daily Links 2009-12-11

Friday, December 11th, 2009

[Post from Infoglide] State Agencies Adopting Entity Resolution

“Significant opportunities to apply identity resolution and entity analytics exist at the state level. State agencies interact with citizens and corporations across many domains, including collection of tax revenues (e.g. oil and gas – I’m from Texas!), licenses (e.g. motor vehicles, hunting, fishing), housing programs, lotteries, child protective services, health care, workers’ compensation, the court system, law enforcement, and homeland security.”

thestar.com: Store owner guilty in $5.75M lottery fraud

“A former convenience store owner has pleaded guilty to defrauding the Ontario Lottery Corporation after misrepresenting a winning ticket worth $5.75 million as his own.”

ZDNet: Cloud computing, so much more than multi-tenancy

“The trouble with talking about multi-tenancy itself is that it draws you into an abstract debate with conventional software vendors over the relative merits of alternative deployment platforms for a given application. This immediately brings the debate onto their home ground — a place where applications are discrete, deployments happen as a batch process and you have to get the system up-and-running before you even start thinking about meeting the business requirement. That’s not where the cloud is at.”

Liliendahl on Data Quality: Phony Phones and Real Numbers

“There are plenty of data quality issues related to phone numbers in party master data. Despite that a phone number should be far less fuzzy than names and addresses I have spend lots of time having fun with these calling digits.”

UALR: UALR Joins National Identity Management Center

Dr. John R. Talburt, the Acxiom Chair of Information Quality at UALR, is an expert in the fields of information quality and entity resolution and will represent UALR at the center. ‘Dr. Talburt is a widely recognized, well-respected expert in the field of information quality and identity resolution. His vast knowledge in these areas of identity management will be an incredible asset for CAIMR and the research we are undertaking this coming year,’ said Dr. Gary R. Gordon, CAIMR’s executive director.”

EDITOR’S NOTE: Infoglide Corporation maintains a partnership with Dr. Talburt and his Laboratory for Advanced Research in Entity Resolution and Information Quality (ERIQ). The Lab conducts research addressing important problems related to entity resolution and information quality.

State Agencies Adopting Entity Resolution

Wednesday, December 9th, 2009

By Robert Barker, Infoglide Senior VP & Chief Marketing Officer

Fresh out of grad school, I initiated a career in software development by writing software for state agencies. Although I migrated to work for software companies several years later, lessons learned in those beginning years were a great platform for later challenges.

Significant opportunities to apply identity resolution and entity analytics exist at the state level. State agencies interact with citizens and corporations across many domains, including collection of tax revenues (e.g. oil and gas – I’m from Texas!), licenses (e.g. motor vehicles, hunting, fishing), housing programs, lotteries, child protective services, health care, workers’ compensation, the court system, law enforcement, and homeland security.

In most of these areas, it’s important to know exactly who you’re dealing with and who their associates are. For example, we’ve partnered with a state workers’ compensation organization to help them detect employers trying to defraud the state by paying lower premiums than they rightfully should. These employers try to foil the state by dissolving and reforming under different company names, but identity resolution is adept at uncovering such unlawful maneuvers.

New entity resolution applications that deal simultaneously with multiple sources of data residing at multiple agencies promise to make state government more efficient and effective. For example, an agency that requires a citizen to supply information during an application process can augment that process with incremental real-time services that find linkages to other data, thus making it possible to stop payments and/or deny licensing to “dead beat dads”, people who have unpaid taxes, etc. until they meet their legal responsibilities.

While using entity resolution in commercial and federal applications is moving rapidly, states have only just begun to exploit this new technology. If you know of areas that need to be addressed, we’d like to hear about them.

Identity Resolution Daily Links 2009-12-01

Tuesday, December 1st, 2009

By the Infoglide Team

WPRI.com: State police crackdown on lottery scams

“‘The clerk opened the cash register and paid our undercover officer $100 dollars,’ said Capt. David Neill of the Rhode Island State Police. ‘On another occasion, our undercover officer presented the $1,000 winning scratch ticket and was told that in fact it was not a winning ticket.’”

naplesnews.com: Editorial: Law enforcement … expanding cooperation, increasing public safety

“The fusion center program aims to make the most of intelligence and technology. That’s collaboration, making teamwork routine rather than something out of the ordinary. That recognizes the age-old truism that crime and criminals know no city or county lines. They move freely to opportunities and hiding places.”

National Terror Alert: Secure Flight Improves Safety And Passenger Delays

“Initially, the Secure Flight program was part of a larger debate about how to identify terrorists consistently while maintaining the privacy of fliers in the post-9/11 world. Once watch list matching was determined to be the correct mechanism, TSA designed the program with privacy and security embedded into its foundation. Secure Flight now uses advanced watch list matching technology and has taken the time to get it right.”

Health IT Buzz: The Evidence for HIT

“Many health care organizations, big and small, public and private, have installed electronic health record systems and are reaping their benefits daily.  Examples include not only national systems like the Veterans Administration and Kaiser Permanente, but regional groups like Geisinger Health System, and individual hospitals like the Beth Israel Deaconess Hospital in Boston, and Lakeland Hospital, a 77-bed facility outside of Omaha Nebraska.  These organizations show that the vision is feasible – health care can be made higher in quality and lower in cost through the best existing HIT.”

Identity Resolution Daily Links 2009-11-24

Tuesday, November 24th, 2009

By the Infoglide Team

Topeka Capital-Journal: Five arrests in lottery fraud

“In this investigation, agents presented unsigned winning lottery tickets to retailers. The clerks were required to advise customers they had won a prize and instruct each they had to redeem winnings at lottery headquarters. In six instances, the clerks withheld information about the winning ticket but later tried to redeem the prize personally or with help of an accomplice.”

New York Times: Computerized Health Records

“Most other countries have much more use of electronic health records than we do. For example, the Danes have virtually 100 percent of physicians using electronic health records. In Britain, virtually 100 percent of primary care physicians use them. In Australia, Sweden, Norway, virtually 100 percent. In many, many other Western countries, the electronic record is virtually ubiquitous.”

ebizQ: Eight Reasons Why Data-Centricity Is The Future Of Business

“Unfortunately less well known, Data-as-a-Service (DaaS) is, however, likely the most strategic aspect of creating business value over the network, more than SaaS and possibly even more than PaaS. Creating a best-of-breed set of data, wrapping a business model around it (advertising, metering, internal chargebacks, build a network effect, etc), defining an SLA, and opening it up internally or to the world is how to both generate consumption as well as becoming in itself the new lock-in.”

reviewjournal.com: A fusion of crime fighters 

“The fusion center concept, which was developed by the federal government after the 9/11 attacks, is grounded in the idea that information flow between police agencies is key to stopping terrorism. But in Las Vegas and elsewhere, the concept has evolved to include a broader ‘all crimes, all hazards’ approach.”

The Other Half of Entity Resolution

Wednesday, November 4th, 2009

By Robert Barker, Infoglide Senior VP & Chief Marketing Officer

In a recent post, Jonathan McDonald quotes one definition of entity resolution:

According to Gartner, entity resolution is “the capability to resolve multiple labels for individuals, products or other noun classes of data into a single resolved entity when pseudonyms, alias names or other synonym-style constructs exist. This is especially true in cases wherein there exists intentional falsification of information or the creation of false identities. While most prevalent in detecting perpetrators of criminal or illegal activity, more-commercial applications exist as well.

While the definition nicely captures the value of “first degree” entity resolution, it falls short by omitting non-obvious relationship detection.

Basic entity resolution determines “who’s who” by sifting through massive amounts of noun/attribute data in multiple disparate data sources. Cutting through ambiguity caused by missing attributes, pseudonyms, aliases, and obvious efforts to deceive, it mines and resolves the essential elements of identity to form an unambiguous picture that greatly enhances business decisions and reduces risk.

However, in many application domains, pinpointing “who knows whom” is equally valuable. In detecting insider trading, for example, it’s important to resolve identity information to achieve an unambiguous picture of a person of interest, but to expose fraudulent activity, it’s critical to identify second and third degree linkages between suspects and their friends, relatives, and business associates.

More examples abound. In insurance, fraudsters change roles each time they stage a car accident and also intentionally modify their identities in accident reports. Fraudulent employers who want to reduce their workers’ compensation premiums will close their company and start a new one with modified identities of corporate officers. In retail, non-receipted returns of merchandise are often linked to store employees and the customers they enlist to act as their confederates. The list goes on and on.

In each case, entity resolution finds hidden connections by evaluating multiple ambiguous attributes with the same algorithms used to resolve identities. A retail employee who takes a customer’s winning lottery ticket (while telling the customer he didn’t win!) can be traced through address and phone information to other suspiciously connected people, e.g. frequent lottery winners and lottery commission employees.

With apologies to the experts at Gartner, here’s a suggested addition to the definition that acknowledges the other half of entity resolution:

The capability to (a) resolve multiple labels for individuals, products or other noun classes of data into a single resolved entity when ambiguity from pseudonyms, alias names or other synonym-style constructs exists, and (b) to expose hidden connections between entities that are two or more degrees of separation apart. This is especially true in cases where there exists intentional falsification of information or the creation of false identities. While most prevalent in detecting perpetrators of criminal or illegal activity, more-commercial applications exist as well.

Identity Resolution Daily Links 2009-10-30

Friday, October 30th, 2009

[Post from Infoglide] Enriching E-discovery Results with Identity Resolution

“Civil lawsuits often result in discovery orders from the court to produce every shred of possibly relevant internal communication. The need to comprehend patterns across the resulting vast amount of aggregated data is critical. To help organizations respond to these demands, powerful e-discovery software systems (e.g., see StoredIQ) create data topology maps that identify the relationships between active sources of multiple forms of electronically stored information (ESI).”

USA Players: Lottery Winner Demands Payment After Crooked Clerk Pilfers Ticket 

“Pankaj Joshi, the accused, was an employee at the convenience store in which Willis purchased his tickets. Joshi had allegedly told Willis that the ticket that he presumed was worth millions was worth only $2 dollars, which Joshi presumably paid to Willis. Joshi was charged with lottery fraud, and it is suspected that he took the winnings and fled to his homeland of Nepal.”

For more, seeLottery Fraud by Retailers Is an Identity Resolution Problem

The Daily Texan: Civil liberties groups voice ‘fusion center’ apprehension

“It will be funded initially by U.S. Department of Homeland Security grants and will then become self-sustaining, using personnel already within APD’s budget. ‘It is really important for law enforcement to be able to share information in a timely fashion, because when you share information, you can solve crimes quicker and, in some cases, prevent another serial offense from happening,’ Carter said. Carter said Central Texas agencies possess large amounts of lawfully collected information, but separate information systems hinder the sharing of information.”

BeyeNETWORK: Master Data Management Checklist #5: Data Quality Mechanics

[David Loshin] “The ability to use the traditional data quality toolset of data parsing, standardization and matching enables the development of a “customer master,” “product master,” “security master,” etc. that becomes the master entity index to be used for ongoing identity resolution and elimination of duplicate entries.”

Airlines and Destinations: Passenger Info Required at Booking under TSA’s Secure Flight Program

“When making a flight booking, each passenger must declare their full name just as it appears in their passport, as well as their gender and date of birth. The airline sends the information to the TSA 72 hours before the flight departure time. The TSA compares the information with watch lists with the purpose of identifying suspected terrorists, preventing access to flights by passengers prohibited from flying, and identifying individuals for whom an enhanced security check should be performed.”

Enriching E-discovery Results with Identity Resolution

Wednesday, October 28th, 2009

By Robert Barker, Infoglide Senior VP & Chief Marketing Officer

Civil lawsuits often result in discovery orders from the court to produce every shred of possibly relevant internal communication. The need to comprehend patterns across the resulting vast amount of aggregated data is critical. To help organizations respond to these demands, powerful e-discovery software systems (e.g., see StoredIQ) create data topology maps that identify the relationships between active sources of multiple forms of electronically stored information (ESI).

Reading about how it works made me speculate, “What value might identity resolution bring to e-discovery?” Identity resolution (AKA “entity resolution”) technology has been used to create solutions for a wide range of problems. Most often, this involves creating an understanding about people and their hidden relationships with other people and organizations. Lottery retailer fraud, airline passenger screening, and workers’ compensation are a just a few examples of areas that have benefited from applying this emerging technology.

Since lawsuits revolve around people, it shouldn’t be surprising that technology capturing enriched information about the identities of the actors involved in the suit could greatly illuminate what’s known about the parties involved. For example, imagine if an augmentation of e-discovery with identity resolution could do two things for each person involved in the suit:

  1. Automate detection of hidden relationships between the participants and other relevant players by drawing from multiple public and private data sources; and
  2. Generate link analyses, including graphical depictions involving the participants and other “entities” like conversation threads, that greatly enrich the litigants’ understanding.

Caveat: I’m not an e-discovery expert. However, based on what we know about identity resolution, I wonder if it’s possible to enhance the results of the e-discovery process?

If you have knowledge and experience in the space, I’d like to hear your thoughts.


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