As a wireless dealer, you likely know that employee fraud can cost you tens of thousands of dollars each month – at each store. Employee ghosting is one of the more common and costly forms of employee theft in wireless stores, but it’s one you can identify and prevent by using some best practices and the right technology.
Employee ghosting happens when employees purchase discounted phones by activating unused lines on a customer’s account. They then sell the phone on the black market – for example, in foreign markets like Asia, Russia, South America or domestically — for a profit. Often, these employees commit this act with phones that are offered for free or discounted through a marketing promotion. Because the phone correlates with an account, the employees may deactivate the lines shortly after stealing it and the scheme often goes undetected. These employees might work for a wireless store for a couple of months and then move on after making tens of thousands of dollars through ghosting. In fact, at Envysion, we’ve heard of an employee committing wireless ghosting fraud with as many as 60 phones. This type of fraud essentially amounts to inventory theft that also results in costly wireless chargebacks – both a big hit to wireless dealers’ profits.
Employees also commit wireless ghosting by setting up fake customer accounts — either with stolen identities or totally falsified information. They create a new account, but one that no one really owns or will ever pay, so they can steal the phone without being detected. Some of our wireless dealer clients have reported finding bogus accounts with old pro athlete names. Others have reported finding that one common thread of information was used – for example, the names on the fake accounts were all different, but the address used was the same.
Preventing Employee Ghosting
So, how do you identify and stop this kind of threat? Combining video surveillance with business intelligence helps you find fishy activity and accounts, and then verify fraud by watching specific video from transactions related to those accounts.
Here’s an example of how this works with wireless ghosting: Using Envysion’s video-based business intelligence products, you can view reports of invoices that show a higher likelihood of fraud, such as transactions with more than one phone activation. You can then click through to watch the video of those in-store transactions to see, for example, if the transaction shows that a customer purchased three phones, but left with only one. You can then watch the employee’s behavior to see if they pocketed two phones.
Another example of shady behavior you can watch for: An employee stealing phones wouldn’t care about accessories, so, you can watch reports for transactions with multiple phone purchases and no accessories sold. Once you find suspicious behavior from an employee, you can then dive deeper by watching similar transactions from the same employee to find evidence of fraud.
This approach not only allows you to prove to all employees that you have the capability to monitor for employee fraud — which goes a long way in discouraging future scams – it also allows you to catch fraud early. And, just consider the math in the case I mentioned earlier, in which one employee stole 60 phones. A report like one of the ones mentioned above would have flagged the activity on the first fraudulent transaction. If the dealer then dismissed the employee after two false transactions with, say, a total of 10 phones, they would have avoided 50 stolen phones. At about $600 per phone, that saves the dealer $30,000 – just by catching one employee in the act!
Technology for Reducing Employee Theft in Wireless Stores
At Envysion, we’ve included many capabilities and best practices in our offerings to help wireless dealers catch employee fraud:
- Exception reports including “multiple line activations” and “at-risk for chargebacks” help our clients quickly and easily identify suspicious transactions.
- Audit services help our clients verify activity such as customers leaving with the incorrect number of phones purchased.
- Remote video viewing helps our clients watch video at multiple stores.
- Zoom features give our clients more detailed viewing of video clips.
- Video clip saving and sharing helps our clients quickly circulate clips of issues to investigate and prevent loss – including easily sharing video with police.
- Audio surveillance helps our clients listen for additional details. (One of our clients even caught an employee teaching another employee their fraud techniques while they were closing the store. You could hear it clear as day: “Is it legal?” “No, but who cares?”
Loss prevention at wireless dealers isn’t just a luxury. It’s vital to your success. Especially with tens of thousands of dollars of inventory (and more) walking out the door through ghosting. But with a few best practices and the right technology, you can conquer this threat to your success.