How to Prevent Claim Fraud with Warranty Management Software

In recent years, there has been a notable increase in warranty fraud costing the entire industry USD 600 million as per a report from ASW. In fact, many promising brands lose 2-4% share of their profits due to such occurings, resulting in a palpable revenue decline.

In a consumer-first marketplace where businesses are striving to keep their customers happy, it can be very difficult to identify fraud and take action against it. Therefore, OEMs require a robust warranty management system to not only prevent these frauds but also maintain their relationship with real customers. 

It is crucial to look out for digitized methods as conventional ways of claim validation don’t seem to be very effective in fraud detection anymore. On the contrary, a digital warranty management solution such as tailored software can be a feasible way to deal with these claim frauds.

In this post, we will dive into the use of a warranty management system to avoid claim fraud and obtain transparency in the entire process. But first, let’s explore a bit more about the warranty types and how a detection system works:

Understanding Warranty Fraud & Its Different Types

Warranty exploits are performed in various ways that include duplicate and false claims, misrepresentation of information, and more. A service center can either make a claim twice for the same product or a product that doesn’t belong to the manufacturer. 

In some cases, a customer or a service center can also try to benefit from a back-dated warranty or register a claim that is not covered in the warranty. There have been many instances where people file a warranty claim for parts that are working fine.

No matter who tries to benefit from these false warranty claim frauds, OEMs always stay on the receiving end of the loss. In the next section, we will discuss how an automated system like warranty management software can help OEMs out.

Why Choose End-to-End Warranty Management Software for Fraud Prevention?

While relying on traditional means of warranty setup may not be the most efficient step in the direction of solving this problem, OEMs can always trust custom software for process automation. In this case, they can choose an end-to-end warranty management software.

This type of software is designed to automate every process in the cycle from a dealer filing the claim to hassle-free supplier recovery. But, how will a warranty management system help in reducing the risks of fraud claims? Let’s dive in to understand the process:

Identification of the Claim Type - The biggest challenge in the process of warrant setup surfaces when it comes to identifying the claim type. However, such software will always evaluate the type of claim before rendering it for further processing. 

Simplified Claim Filing -  Your dealers don’t have to splurge long hours while filing for a claim as these systems provide a quick and easy interface to do so. Dealers can choose a template, upload supporting documents, and submit it to the OEM with the click of a button.

Policy Assessment - Policy assessment is the highlight of these digital products as dealers and OEMs can access crucial details of the claim such as coverage of the parts, versions of the model, reimbursement terms of the product, and more. 

Claim Audit - Here’s an important reality check! Manual methods of claim auditing are prone to human errors and may be one of the reasons behind claim fraud. However, an automated warranty management process comes with an audit trail. It means that the software will have certain programmed parameters for the auto-approval of a claim. It can also help OEMs and dealers with currency management.

Supplier Recovery Automation - If a potential warranty claim is meant to be processed for supplier recovery, then the warranty management system will prompt a claim generation process accordingly.

With everything sorted in the warranty management cycle, OEMs can work on optimizing other aspects of the process to reduce the possibility of false claims. If you are an OEM looking to resolve warranty-related issues and automate the process for dealers, then you can consider custom software solutions. You can leverage such software to divide your service structure across different locations and maintain trust in your dealers’ network.

Experienced technology consultant specializing in IT strategy, digital transformation, and innovation. Driving business growth through tech solutions.

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