Fraudsters are exploiting the vulnerabilities in claims submission systems, using sophisticated programs to flood the process with fraudulent claims. As a result, it’s now critical that claims administrators have the ability to handle claim submission rates of 5-10 claims per second—or more—especially during fraud attack spikes.
The Speed of Programmatic Fraud
Fraudsters using programmatic attacks can submit claims at lightning speeds. They employ automated systems that rapidly generate and submit fraudulent claims, often using AI-generated aliases, real or fake addresses, and active email addresses. These programs are highly sophisticated, capable of mimicking legitimate claimants so well that traditional fraud detection methods struggle to keep pace.
During a programmatic attack, submission rates can sustain over five claims per second, and spikes can push that number well over 10 claims per second. This kind of volume overwhelms outdated claims management systems that were never designed to handle such rapid and sustained attacks. One claims administrator experienced a catastrophic system failure when faced with an influx of claims during an attack. The system crashed, preventing legitimate class members from submitting their claims and threatening the final approval of the settlement.
This is not an isolated case. As fraudsters continue to evolve their methods, programmatic attacks are becoming more common, and the speed at which these attacks occur is only increasing.
Bot Blocking Only Temporarily Slows Fraud Speeds
While it may be tempting to use bot-blocking technologies like CAPTCHA or VPN-based blocking to prevent these fraudulent claims from being submitted, in many cases these approaches will do little over time to slow the speed of fraud.
Fraudsters have become adept at bypassing CAPTCHA and other frontend bot-blocking technologies. The instant feedback provided by these tools allows fraud programs to refine their approach, eventually solving claim validation questions and exploiting system vulnerabilities. In one case, a claims administrator used bot-blocking technology to reduce fraudulent submissions, but within 48 hours, the rate of fraudulent claims tripled, ultimately reaching over 500,000 per day.
Read our blog post on why claim blocking isn’t the answer for more.
The Solution: Scalable, Real-Time Processing
To effectively manage programmatic fraud, it’s essential that claims administrators have the backend capacity to process claims at rates exceeding 5-10 claims per second. Administrators need scalable, real-time fraud detection tools that can handle large volumes of claims without crashing or slowing down. This ensures that legitimate claimants are not blocked and that fraudulent claims are efficiently filtered out.
By investing in advanced fraud detection tools like those offered by ClaimScore, law firms and claims administrators can protect the integrity of class action settlements. ClaimScore’s AI-powered system is capable of processing hundreds of thousands of claims per hour while providing real-time analysis to flag fraudulent submissions. This scalable approach ensures that legitimate claims are processed smoothly, fraudulent claims are detected and rejected on the backend, and the settlement approval process remains on-track. By ensuring that your claims management system is equipped for this challenge, you can safeguard the fairness and integrity of your class action settlement process.
To learn how to build a successful class action settlement, check out our new ebook, ”Best Practices in Class Action Claim Validation: A Checklist.”
