Preventing fraud with IP-based tracking

To catch those from the Lower 48 looking to cash in on Alaska’s oil and gas profit return system, the state turned to an Internet Protocol-based mapping and tracking detection tool.

Alaska’s Permanent Fund Dividend program returns more than a billion dollars of oil and gas profits to state residents a year, but the program has been plagued by fraudulent claims. Until recently, the audit and review process was based on tips from people who reported suspicious application or the return address on a physical application.

The Department of Revenue needed a way to make sure all program applicants were actually Alaska residents. So when the state adopted an online application process for dividend requests, it was able to implement a fraud detection solution from Neustar, a provider of data services and anti-fraud tools.

Neustar’s GeoPoint IP Intelligence is a web-based tool that uses a central repository of geographic and network connections that maps 4 billion routable IP addresses worldwide. It lets officials verify that an applicant’s IP address is in Alaska, investigating fraudulent applications more effectively.

The Permanent Fund Dividend Division uses Neustar’s REST API  web service for IP location detection. It lets the user create geolocation rules with custom criteria to automatically block or flag a suspicious transaction.

Since implementation, the return on investment has been positive for the state. Anne Weske, operations manager for the Permanent Fund Dividend Division, said that the solution was a quick, affordable and reliable. 

The solution has identified more than 700 fraudulent applications, resulting in eight indictments, 36 civil actions and a savings of $2.6 million. “Each year we audit thousands of applications and deny hundreds of returns,” Weske said.

About the Author

Amanda Ziadeh is a former reporter/producer for GCN.


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