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Fraud Detection & Prevention Flashcards

7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Fraud Detection & Prevention flashcards as text

  1. Which ACORD form field is most commonly manipulated in staged auto accident fraud schemes?

    Answer: Vehicle identification number (VIN)

    VIN manipulation allows fraudsters to misrepresent vehicle identity, value, or ownership in staged auto accident claims.

  2. In the context of ACORD data standards, what is a 'soft fraud' indicator in property claims?

    Answer: Slightly inflating the value of legitimately damaged items

    Soft fraud (opportunistic fraud) involves exaggerating legitimate claims, such as inflating damaged item values, rather than fabricating the entire loss.

  3. Which data element in ACORD's AL3 standard is critical for detecting policy stacking fraud in auto insurance?

    Answer: Vehicle use code

    Vehicle use codes help identify whether a personal-use vehicle is actually being used commercially, a common discrepancy in policy stacking schemes.

  4. What is the primary purpose of the NAIC's Special Investigations Unit (SIU) data call?

    Answer: Collecting standardized fraud referral data across insurers

    The NAIC SIU data call collects standardized information about insurer fraud referral activities to benchmark anti-fraud efforts industry-wide.

  5. Under the ISO ClaimSearch system, what triggers an automatic cross-match alert for a claimant?

    Answer: Matching name, SSN, or vehicle data against prior claims in the database

    ISO ClaimSearch cross-matches claimant identifiers such as name, SSN, and vehicle data against its national claims database to surface prior loss patterns.

  6. Which red flag is MOST indicative of medical provider fraud in workers' compensation claims?

    Answer: Billing for procedures not supported by the diagnosis code

    Upcoding or billing for procedures inconsistent with the diagnosis is a primary indicator of medical provider fraud in workers' compensation.

  7. What role does ACORD's XML framework play in real-time fraud detection?

    Answer: It enables structured, machine-readable data exchange that feeds analytics and fraud scoring engines

    ACORD XML standards provide structured data formats that allow insurers to feed consistent, normalized data into fraud analytics and scoring systems.