Countering Fraud in Student Funding
Fiona Innes
Head of Counter Fraud, Counter Fraud Services Department
March 2016
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
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
• Disabled Student Allowance
Non-Medical Helper, Taxi, Equipment, Assessments
• Grants for Dependents
Child Care, Adult Dependent Grant, Parental Learning Allowance
• Institutional & Organised
Qualifications, Attendance, Organised Targeting of Learning Provider
• Repayments Evasion
Avoiding Repayment
CFS Structure
Head of Service
Fraud Manager Fraud Analytics Manager Investigations Manager
Team Manager
GFD
Team Manager
DSA
Senior Analyst
Team Manager
Maintenance
Loan/Grant
Team Manager
Repayments
Evasion
Sanctions Officer 2nd Tier Review
Officer Senior Analyst
Investigators (6)
Investigators (4)
Investigators (6)
Investigators (6)
Investigators (6)
Analysts (2)
Analysts (2)
Glasgow
Darlington
Team Manager
Institutional Fraud
Investigative Assistant
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.
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
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.
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 £170,416.58.
Across all 98 applications involved, payments totalling £712,713.42 were blocked from being paid.
Phishing
What is Phishing?
Phishing is the term given to a type of fraud which involves a third party emailing an individual
pertaining to be from an organisation when in fact they are not. The individual, believing the email 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.
£0
£200,000
£400,000
£600,000
£800,000
£1,000,000
£1,200,000
£1,400,000
£1,600,000
£1,800,000
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
SLC Phishing Volumes Total Lost Total Saved
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.
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.
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.
Opportunity
Fraud Triangle
Motivation
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.
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.
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.
£14.7 Million
£16.7 Million
£15.1 Million £15.2 Million
£20 Million
12/13 13/14 14/15 15/16 16/17
Total Value Saved
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
Email: [email protected]
Phone: 0141 243 3583
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
0141 243 3583.
If a student has received an email asking them to verify their personal information by clicking on a link contained within
the email, this should be passed to [email protected]
Contact name – Fiona Innes
Department/Role – Counter Fraud Services,
Head of Counter Fraud Services
email [email protected]
phone 0141 243 3487
website www.slc.co.uk