Reporting/Monitoring Fraud

Program Coordinators should use electronic reports to monitor and track misuse and fraud.  The following reports may be utilized to detect misuse and fraud within your program:

  • Account Activity Report –This report shows all active accounts and spending for each account during a billing cycle.  It provides details on each transaction, including transaction date, transaction type, merchant name, and dollar amount.  It is particularly useful for identifying suspicious merchants, unusually high spending patterns, excessive convenience check usage, and untimely purchases.
  • Declined Authorizations Report – The declined authorization report will identify account holders who have attempted to use an account to buy an item for which they are not authorized, that exceeds their single-purchase limits, that exceeds their monthly purchase limit, or from a merchant that falls under a blocked Merchant Category Code (MCC).
  • Disputes Report – The disputes report identifies date, merchant, reason code, dollar amount, and status of each dispute filed by an account holder.  Approving officials and A/OPC’s should track and follow up on disputes to determine their outcomes.  Account holders should attempt to resolve disputes directly with merchants prior to filing a disputes report.  If a merchant is consistently appearing on the disputes report, the A/OPC should determine whether the merchant may have billing issues, quality issues, or is attempting to commit fraud by submitting false transactions.
  • Unusual Spending Activity Report – The banks offer various reports identifying transactions that may warrant further review.
  • Lost/Stolen Account Report –The lost/stolen account report identifies accounts that are reported lost or stolen.  This may either be an indicator that the account holder needs to secure his/her account or that the account holder is attempting to disguise misuse or fraudulent activity by denying the charges.
  • Master File – The master file should be reviewed periodically to eliminate account holders who are no longer employed in the agency, correct addresses, and verify whether card limits and authorization controls are appropriate.
  • Ad Hoc Reports - Your bank may offer an ad hoc reporting tool that enables you to create customized reports with the data elements you specify.

Taking Action

Potential consequences for the account holder may include:

  • Counseling,
  • Cancellation of the account,
  • A written warning,
  • Notation in employee performance evaluation,
  • Reprimand, and/or
  • Suspension or termination of employment.

In the case of purchase account, the employee may be held personally liable to the Federal Government for the amount of any unauthorized transactions. Depending on the agency and the circumstances, there are a number of applicable laws that can result in fines or imprisonment.

Additionally, in certain cases, the issuing banks are authorized to take certain actions against account holders whose accounts are cancelled for delinquency, such as:

  • Assessing late fees;
  • Utilizing collection agencies to recover the delinquent balance;
  • Reporting the delinquency to national credit bureaus; and
  • Salary offset.