CVA Risk Assessment & Fraud Detection Flashcards

What distinguishes a hard fraud indicator from a soft fraud indicator in CVA assessments?

Answer: Hard indicators are definitive evidence of fraud; soft indicators suggest further scrutiny is needed

Hard fraud indicators constitute definitive evidence requiring escalation, while soft indicators are patterns warranting additional investigation.

A CVA agent finds a document with altered dates. What category of fraud does this represent?

Answer: Document tampering

Physically or digitally altering dates on submitted documents constitutes document tampering, a specific category of fraud.

Which internal control helps prevent conflicts of interest during CVA risk assessments?

Answer: Rotating verifiers so agents do not repeatedly handle the same claimant's cases

Rotating agents across cases prevents familiarity bias and conflicts of interest that could compromise objective risk assessment.

Under CVA standards, how should an agent handle a suspected fraudulent claim that lacks sufficient evidence to confirm fraud?

Answer: Flag it as suspicious, document findings, and continue monitoring

Without sufficient evidence, agents must flag suspicions, document all findings thoroughly, and continue monitoring rather than making final determinations.

Which data anomaly technique do CVA agents use to identify outliers in large verification datasets?

Answer: Benford's Law analysis to detect unnatural digit distributions

Benford's Law analysis detects unnatural digit frequency distributions in financial datasets, a widely used fraud detection technique.

What is 'collusion' in the context of CVA fraud detection?

Answer: Two or more parties cooperating to deceive the verification process

Collusion in verification contexts refers to two or more parties working together to deceive or circumvent the verification process.