Choose the Right Technology and Save Yourself from Warranty Frauds

Choose the Right Technology and Save Yourself from Warranty Fraud

No company likes to be defrauded. Yet, many yield to fraudsters, only because brands cannot afford the risk of alienating its customers. Surveys find that about a tenth of warranty costs go to fraudulent claims. Thus, warranty, which is supposed to serve as a powerful and persuasive promotional tool, eats into organizational sales income.

Even companies that suspect warranty frauds are not sure how to tackle them. Traditional tools for fraud detection are ungainly. They cost too much time, effort, and money. The huge bulk of claims with clumsy data make it difficult, even for experienced personnel trying to verify claims and detect frauds individually. Therefore, companies choose to bear the cost of frauds thinking that they could at least save time and effort.

Cutting expenses and building a loyal customer base is about balancing the two, because warranty processes are too intricate. Claims management, appeals, and audits are daunting enough. Add to it parts-return and cash-recovery from suppliers. Then there are product engineers, dealers, and distributors to be held accountable, and customers scattered across the globe.

Powerful and cost-effective tools

Powerful software solutions can process large volumes of data and quickly detect fraud by using cutting-edge approaches. Day by day, their features keep improving because of special programming techniques. Improving the user interface is also one such capability. Web 2.0, HTML 5, Mobility, and Cloud-based SaaS model are making software solutions increasingly affordable. Going by the SaaS model, you need not invest heavily on one-time purchases or licence fees. Most services provide free trials as well. You can opt for monthly and annual subscriptions on a need basis. If you are not really happy with the service, or if you want to experiment another software solution, you can unsubscribe at any time.

Choose the Right Technology and Save Yourself from Warranty Frauds

Predicting frauds

Predictive analytic uses advanced statistical and data-mining capabilities, and helps identify claims with high probability of fraud. Such software functions enable manufacturers to:

  • Process historical data on claims and create models that help identify patterns and anomalies
  • Identify factors that hint at greater probability of fraudulent claims
  • Identify suspicious claims and refer them for expert scrutiny
  • Integrated workflows help to trace quality issues to the suppliers concerned, helping in quick recovery of costs
  • The system maintains master data of all suppliers, dealers, channel partners, finished products, and components. Applying dynamic business rules to such exhaustive data can generate reports as soon as claims are submitted, letting personnel know about the suspicion of fraud.


A California-based IT company specializing in the warranty management domain, has a host of solutions for various levels—Enterprise Warranty Management, Fraud Analytics, and Cloud-based Warranty-On-Demand. Their web-based, full-lifecycle warranty solution brings together OEMs, suppliers, and service-channel partners under a real-time environment. The solution has proven benefits, enabling reduction in warranty spend, elimination of fraudulent claims, reduction in claim-processing time, increase in supplier recovery, and facilitation of informed decisions based on dynamic warranty intelligence reports.

Author Bio

Preethi vagadia is currently a Senior Business architect with the Service operations practice at a well-known IT Industry in Bangalore. She has worked in several process improvement projects involving multi-national teams for global customers. She has over 8 years of experience in Warranty administration services and has successfully executed several projects in Logistics management, Logistics Integration, Reverse logistics, Warranty software and Programmatic Solutions.

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