An extended warranty, sometimes called a service agreement, service contract or maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty available on a new item.
According to PwC research 5 key areas of warranty fraud are:
1. Non-returns or advance replacement exploitation;
2. Claims by third-party service providers for services never performed;
3. Under-coverage (misapplication of entitlement);
4. Just-in-time coverage (cover purchased after the item has already been lost or damaged);
5. Buy one and sell several (unethical third-party service providers buy a small number of valid warranties, then resell those warranties to several customers. Claims are submitted for covered products when the work or replacement is related to products without a valid warranty).
So how can organisations minimise their exposure to warranty fraud?
Read the in-depth article to learn more about how insurance claims teams can arm themselves with appropriate counter fraud tools.