Fraud prevention isn’t a commodity. It’s not interchangeable, and it’s certainly not something to bargain-shop for. And yet, too often, that’s exactly how it’s treated. In an industry where the lowest bid often wins, administrators are pressured to keep fraud detection costs low, or cut them entirely. This “race to the bottom” leads to underperforming solutions that are designed to check a box, not actually stop fraud. The result? Settlements become vulnerable, and legitimate class members pay the price through a reduction in their benefit payment.
The problem isn’t just a budget issue. It’s a mindset. Fraud detection is frequently viewed as a “cost.” It isn’t. A proper, effective fraud solution is actually a value generator for absent class members. Simply stated – when settlements are targeted by sophisticated fraudsters, who auto-submit thousands (or even millions) of fake claims, less-than-comprehensive anti-fraud solutions ultimately reduce class member benefits. Said differently, a comprehensive anti-fraud solution puts more money in the pockets of real class members, and does not allow the fraudsters a “piece of the pie.”
Quality fraud detection takes real work. It requires machine learning, expert human review, behavioral analysis, identity resolution, and deep contextual understanding of class action data. These aren’t features you can fake. They require deliberate investment—and the payoff is clear. For every dollar spent, properly implemented fraud prevention returns significantly more to the class by keeping fraudulent claims out of the fund.
As Donald Beshada, CEO of ClaimScore, often says:
“If someone’s telling you, in a case involving a several million dollar claim fund, that they can provide a comprehensive, quality fraud solution for ten or twenty thousand dollars, you just set that money on fire. No legitimate anti-fraud solution – one that protects the fund by weeding out 99+ percent of illegitimate claims while at the same time allowing access to the settlement website – costs that little. The reality is, whoever is telling you that is not providing actual fraud prevention and is not truly protecting the class’s greatest asset – the fund, itself.”
Effective fraud prevention isn’t about having the cheapest tool on paper. It’s about results measured in accuracy, reliability, and the money that stays in the hands of legitimate claimants.
Fraud detection shouldn’t be judged by what it costs. It should be judged by what it protects. If your prevention strategy can’t demonstrably return value to the class, it’s not a solution. It’s actually a liability.
There are no shortcuts to quality. And, in a world where fraud evolves daily, pretending otherwise is a huge risk. One that likely results in class member dollars ending up in the wrong hands.
Let’s stop racing to the bottom, and start thinking about what comprehensive fraud detection truly is: an asset to legitimate claimants.
