Identity Resolution Daily

Identity resolution fans, twice a day, five days a week, we bring you the latest news and keenest insight. (Yes, there are fans. It’s a niche, but as the need for identity resolution grows in retail, banking, national security and insurance industries, the fan base grows as well.)

Below are five reasons you should read our blog every day. Or, just click this orange button, subscribe and never miss a single post.

1. Retail Loss Prevention’s Biggest Concern: Internal Theft
Retailers, you know this: Employee theft is hands down the largest cause of shrinkage. Do you know how to prevent this form of retail fraud?

“…if 75 percent of internal thieves are never caught, wouldn’t it be easier to not hire high risk employees in first place than to catch them in the act? With software — specifically identity resolution software — retailers can get a clear comprehensive, composite depiction of current employees and potential new hires. Identity resolution solutions aggregate information from existing negative databases, uncovering convictions, bad debt, driving histories, lawsuits and more.”

2. Know Your Employees with Identity Resolution
Again retailers, if you want to catch thieves like the one below, you need an identity resolution solution.

“Newburgh town police say a local clerk at the Wal-Mart Super Center on Route 300 has been ‘returning’ Wal-Mart merchandise and pocketing the cash. Her take? Over $30,000. Police arrested Darlene Banks, 50, of the City of Newburgh, Tuesday night as she showed up for work. It ended her two-year tenure at the local Wal-Mart, where she was a customer service specialist — with the ability to do merchandise returns.”

3. Charlie Intriago is The Anti-Money Laundering Iconoclast
Money launders, watch out. The publisher of the Money Laundering Alert is monitoring your every move. Bankers, federal regulators, same thing.

“Intriago is also a big believer in striking a balance between privacy and security. In a 2002 interview after the passing of the USA Patriot Act, he commented on the new investigative authority of the federal government, ‘One has to pray that those powers are used responsibly.’ If not, Charlie Intriago will be the one to tell us about it.”

4. The Banking Industry Needs Identity Resolution
Bankers, you know how hard it is to comply with the Bank Secrecy Act (BSA). Here’s how to keep out of trouble and off the front page of the paper:

“Until the BSA is redrafted to clearly outline what is and is not required of Anti-Money Laundering (AML) officers, identity resolution software is the best way to protect the banks’ assets. To protect itself from an ambiguous law, banks should go beyond what federal regulators require. And for this, they need to implement an identity resolution solution that uses sophisticated similarity search techniques to resolve multiple identities into one unified view.”

5. Is Loss Prevention Getting Even More Dangerous?
Loss Prevention professionals, you know your job can be dangerous, even deadly. Please pay attention to Jeff Stein’s call to action:

“…large retail groups need to work together and set up trust funds for the families of future Loss Prevention professionals who sadly lose their lives while trying to protect the safety, security and profits of so many.”

5. The Daily Link Posts
Need to keep up with the latest news regarding identity resolution? Every morning, Monday through Friday, we collect the latest breaking stories so you don’t have to.

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[Daily Post from Infoglide Software] Know Your Employees with Identity Resolution

“To shrink this shrinkage, wouldn’t it behoove the retail industry to go beyond ordinary employee screening procedures? If banks are required to Know Your Customer, then it’s probably a good idea for retailers to Know Your Employee (KYE).”

GovernmentExecutive.com: DHS issues range of traveler screening rules

“‘Under the program, TSA would receive passenger and certain non-traveler information from aircraft operators, conduct watch-list matching, and transmit watch-list matching results back to aircraft operators,’ the department said. The department also moved to create a system of records for Secure Flight and exempt it from parts of the Privacy Act.”

Bangkok Post: Amlo wants banks to compile information on their customers

“This is one of 49 anti-money laundering measures suggested by the World Bank and the International Monetary Fund (IMF), he said. KYC/CDD measures are also part of the International Convention for the Suppression of the Financing of Terrorism, introduced in 1999. The convention is issued after the 9/11 terrorist attacks in 2001, and Thailand is among the countries ratifying the convention.”

Financial Times: Top auditors’ median fees up by 345 per cent

“In a sign of the explosion in audit activity since the passage of the Sarbanes-Oxley compliance law, the median fees earned by the world’s top auditing firms shot up by 345 per cent in the five years to 2006, a study said on Wednesday.”

The News Journal: Kmart employees charged with theft of electronics

“Two Kmart stock room employees were arrested on charges they pilfered more than $6,000 in merchandise from the store while working.”

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Lately we’ve been covering the Bank Secrecy Act (BSA) in depth, with particular emphasis on the mandate to Know Your Customer (KYC) and Know Your Customer’s Customer (KYCC). To aid in compliance with the BSA’s ambiguous requirement (PDF) to “form a reasonable belief that [the bank] knows the true identity of its customers,” and to avoid hefty fines and bad publicity, every bank should go beyond what federal regulators require. Infoglide Software strongly recommends an identity resolution solution that uses sophisticated similarity search techniques to resolve multiple identities into one unified view.

However, stories like this one below from Times Herald Record, lead us to a great idea for a similar mandate for retail industry:

“Newburgh town police say a local clerk at the Wal-Mart Super Center on Route 300 has been ‘returning’ Wal-Mart merchandise and pocketing the cash. Her take? Over $30,000. Police arrested Darlene Banks, 50, of the City of Newburgh, Tuesday night as she showed up for work. It ended her two-year tenure at the local Wal-Mart, where she was a customer service specialist — with the ability to do merchandise returns.”

Stories like this one involving the ironically-named Ms. Banks are rampant.

“The amount of employee theft nationwide is staggering,” observes the Observer Dispatch. “Employee theft made up 47 percent — or $17.6 billion — of the retail industry’s inventory loss in 2005, according to the National Retail Security Survey directed by Richard Hollinger at the University of Florida. In contrast, shoplifting amounted for only 33 percent of disappearing store items.”

To shrink this shrinkage, wouldn’t it behoove the retail industry to go beyond ordinary employee screening procedures? If banks are required to Know Your Customer, then it’s probably a good idea for retailers to Know Your Employee (KYE). With an identity resolution solution, Loss Prevention (LP) professionals are able to get a clear comprehensive, composite depiction of current employees and potential new hires. Identity resolution solutions will aggregate information from existing negative databases, uncovering convictions, bad debt, driving histories, lawsuits and more.

Back to the same Times Herald Record story:

“Police say the scam was simple enough. Clerks would take merchandise from Wal-Mart shelves and run it through registers as already-purchased items being returned. In some cases, Banks got cash back; in some cases she took gift cards she could use in the store — or sell on the street. Police say Banks took care to avert the eagle eyes of Wal-Mart loss prevention investigators. She never returned more than $200 worth of stuff at one time and mixed up the type of items she’d return: Wal-Mart jewelry, cigarettes, clothes, and, now and then, a television.”

Identity resolution solutions also tap into inventory and returns data and with a system in place, Ms. Banks’s scam would have been easier to detect and quicker to apprehend.

Please see Identity Focused Retailing for more information.

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[Daily Post from Infoglide Software] The Anti-Money Laundering Iconoclast

“Charlie Intriago is also a big believer in striking a balance between privacy and security. In a 2002 interview after the passing of the USA Patriot Act, he commented on the new investigative authority of the federal government, ‘One has to pray that those powers are used responsibly.’”

The Transnational: New Transatlantic Security Measures Raise Complaints

“New rules signed into law this month by the U.S. government threaten to complicate international travel to and from the United States. According to regulations set to take effect within six months, carriers must provide U.S. Customs and Border Protection officials with passenger information at least 30 minutes and as early as 72 hours prior to departure. Current regulations require airlines to provide passenger data no later than 15 minutes after take-off.”

The Economic Times: Banks can’t wash hands of laundering

“Stringent US regulations to combat money-laundering have extended beyond its borders and have had an impact on banks around the world. The legal and regulatory landscape created in the US due to the US Patriot Act and the regime of the Office of Foreign Assets Control (OFAC) have increased compliance pressures on banks, according to a global study by KPMG Forensic.”

recordonline.com: Clerk charged in Wal-Mart scam

“Newburgh town police say a local clerk at the Wal-Mart Super Center on Route 300 has been “returning” Wal-Mart merchandise and pocketing the cash. Her take? Over $30,000.”

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There’s a very interesting study out last week from the Loss Prevention Research Council (LPRC) that Progressive Grocer featured in Retailers Misperceive Extent of Their Own Shrink. In the article there were two factoids that we’d like to call to your attention.

First, the report found that

“86 percent of respondents said they spend the most or second-most time working on loss problems related to internal product theft. Some 62 percent said they spend the most or second-most time working on loss problems related to internal cash theft. And 32 percent said that they spend the most or second-most time working on external theft, including organized retail crime.”

Clearly, internal theft from employees is the largest problem that retail loss prevention professionals face. “Entire retail chains have gone out of business,” writes Ronald Bond for Entrepreneur.com, “due to their inability to control losses from theft. The biggest threat facing storeowners is employee theft, which accounts for nearly half of inventory shrinkage–more than shoplifters, more than administrative error and more than vendor fraud.” [Emphasis added.]

In Employee Screening: An Ounce of Prevention is Worth a Pound of Lobsters, we pointed out that 75 percent of all employee thefts go unnoticed, according to U.S. Department of Commerce.

So if internal theft takes up most of an LP pros’ day, what’s the solution? According to the LPRC survey, here’s a second finding of interest:

“Almost two-thirds (65.5%) of respondents think implementing new technology is very important for their companies’ loss prevention endeavors.”

Hardware-wise, Closed Circuit Television (CCTV) can be a good deterrent. But if 75 percent of internal thieves are never caught, wouldn’t it be easier to not hire high risk employees in first place than to catch them in the act?

With software — specifically identity resolution software — retailers can get a clear comprehensive, composite depiction of current employees and potential new hires. Identity resolution solutions aggregate information from existing negative databases, uncovering convictions, bad debt, driving histories, lawsuits and more.

Share This

There’s a very interesting study out last week from the Loss Prevention Research Council (LPRC) that Progressive Grocer featured in Retailers Misperceive Extent of Their Own Shrink. In the article there were two factoids that we’d like to call to your attention.

First, the report found that

“86 percent of respondents said they spend the most or second-most time working on loss problems related to internal product theft. Some 62 percent said they spend the most or second-most time working on loss problems related to internal cash theft. And 32 percent said that they spend the most or second-most time working on external theft, including organized retail crime.”

Clearly, internal theft from employees is the largest problem that retail loss prevention professionals face. “Entire retail chains have gone out of business,” writes Ronald Bond for Entrepreneur.com, “due to their inability to control losses from theft. The biggest threat facing storeowners is employee theft, which accounts for nearly half of inventory shrinkage–more than shoplifters, more than administrative error and more than vendor fraud.” [Emphasis added.]

In Employee Screening: An Ounce of Prevention is Worth a Pound of Lobsters, we pointed out that 75 percent of all employee thefts go unnoticed, according to U.S. Department of Commerce.

So if internal theft takes up most of an LP pros’ day, what’s the solution? According to the LPRC survey, here’s a second finding of interest:

“Almost two-thirds (65.5%) of respondents think implementing new technology is very important for their companies’ loss prevention endeavors.”

Hardware-wise, Closed Circuit Television (CCTV) can be a good deterrent. But if 75 percent of internal thieves are never caught, wouldn’t it be easier to not hire high risk employees in first place than to catch them in the act?

With software — specifically identity resolution software — retailers can get a clear comprehensive, composite depiction of current employees and potential new hires. Identity resolution solutions aggregate information from existing negative databases, uncovering convictions, bad debt, driving histories, lawsuits and more.

Share This

Loss prevention professionals are worriers. It’s part of the job, losing sleep while figuring out shrinkage issues and finding solutions.

Below is our list of the Top Ten Things that Keep LP Pros up at Night. Special thanks to Jeff Stein, president of Executive LP Services and MonitorClosely.com, for contributing some of the issues that have kept him awake over the last 20 years in LP.

The Top Ten Things that Keep LP Pros up at Night

1. The budget for loss prevention, or lack thereof

2. Shrink numbers

3. Staffing (recruiting, hiring, firing, laying off due to downsizing, merger, chapter 11). Finding good entry-level security officers, loss prevention auditors, and store detectives to directors, VPs of loss prevention and CSO’s is always an issue. (Our friend Jeff Stein can help out. Please visit LP-Securityjobs.com, Jeff’s new recruiting site for loss prevention and security professionals, where he’s offering the opportunity to post three job listings for free.)

4. Serious incidents like a fatality in one of the stores or a major catastrophe (hurricanes, fire, string of armed robberies, terrorist attack, etc.)

5. Having a large loss out of one store due to internal or external theft or fraud that is so bad that you have to report it to the CEO/CFO. Then there would be the questions that follow: Why didn’t we catch it sooner? How come we weren’t able to deter it?

6. Waiting for inventory results

7. Balancing quality of life between work and home

8. Lack of a coherent anti-theft policy and program that (a) formally lays out the consequences of employee theft and (b) is widely distributed among the entire work force. For more, see Professor Richard Hollingier’s paper on Deterrence in the Workplace: Perceived Certainty, Perceived Severity, and Employee Theft (free trial subscription).

9. Having all the data needed to the job — it’s either (a) all there but can’t be accessed because it’s spread across different systems, departments or stores, or (b) the data points being collected are not sufficient. See our post on So, you’ve got all that data. Now how are you going to use it? for more.

10. Figuring out dishonest employee dynamics and developing statistical models to predict shrinkage — paraphrased from this article from Loss Prevention Magazine that outlines problems uncovered by the Loss Prevention Research Council (LPRC).

If you’re an LP professional, what keeps you awake at night? Please leave us a comment below…

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Loss prevention professionals are worriers. It’s part of the job, losing sleep while figuring out shrinkage issues and finding solutions.

Below is our list of the Top Ten Things that Keep LP Pros up at Night. Special thanks to Jeff Stein, president of Executive LP Services and MonitorClosely.com, for contributing some of the issues that have kept him awake over the last 20 years in LP.

The Top Ten Things that Keep LP Pros up at Night

1. The budget for loss prevention, or lack thereof

2. Shrink numbers

3. Staffing (recruiting, hiring, firing, laying off due to downsizing, merger, chapter 11). Finding good entry-level security officers, loss prevention auditors, and store detectives to directors, VPs of loss prevention and CSO’s is always an issue. (Our friend Jeff Stein can help out. Please visit LP-Securityjobs.com, Jeff’s new recruiting site for loss prevention and security professionals, where he’s offering the opportunity to post three job listings for free.)

4. Serious incidents like a fatality in one of the stores or a major catastrophe (hurricanes, fire, string of armed robberies, terrorist attack, etc.)

5. Having a large loss out of one store due to internal or external theft or fraud that is so bad that you have to report it to the CEO/CFO. Then there would be the questions that follow: Why didn’t we catch it sooner? How come we weren’t able to deter it?

6. Waiting for inventory results

7. Balancing quality of life between work and home

8. Lack of a coherent anti-theft policy and program that (a) formally lays out the consequences of employee theft and (b) is widely distributed among the entire work force. For more, see Professor Richard Hollingier’s paper on Deterrence in the Workplace: Perceived Certainty, Perceived Severity, and Employee Theft (free trial subscription).

9. Having all the data needed to the job — it’s either (a) all there but can’t be accessed because it’s spread across different systems, departments or stores, or (b) the data points being collected are not sufficient. See our post on So, you’ve got all that data. Now how are you going to use it? for more.

10. Figuring out dishonest employee dynamics and developing statistical models to predict shrinkage — paraphrased from this article from Loss Prevention Magazine that outlines problems uncovered by the Loss Prevention Research Council (LPRC).

If you’re an LP professional, what keeps you awake at night? Please leave us a comment below…

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[Daily Post from Infoglide Software] Employee Screening: An Ounce of Prevention is Worth a Pound of Lobsters

“It’s pretty much impossible to tell if a potential employee is a good or bad person by simply looking at their resume. However, identity resolution software aggregates information from existing data stores, turning up lawsuits, convictions, bad debt, driving histories and the like to form a clear, comprehensive, composite depiction of your employees.”

Reuters: US clarifies anti-money laundering enforcement rules

“Banks and credit unions must have proper internal controls, independent testing of anti-money laundering programs, a program coordinator and a staff training program. A cease-and-desist order could be issued if they fail to establish and maintain a reasonably designed program or correct a previous problem, regulators said.”

Federal Reserve Board: Agencies issue statement on enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements

“The federal financial regulatory agencies on Thursday issued a statement setting forth the agencies’ policy for enforcing specific anti-money laundering requirements of the Bank Secrecy Act (BSA). The purpose of the Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements is to provide greater consistency among the agencies in enforcement decisions in BSA matters and to offer insight into the considerations that form the basis of those decisions.”

Federal Reserve Board: Interagency Statement on Enforcement of Bank Secrecy ACT/Anti-Money Laundering Requirements

PDF: U.S. regulators set forth guidelines to clarify when banks will be issued with cease-and-desist orders for failing to report possible money laundering transactions.

USATODAY: State-run sites not effective vs. terror

“[U.S. Attorney Harvey Eisenberg] said officers at the center do a lot of work on ‘general crime.’ When it comes to ‘putting together those dots’ that might lead to potential terrorists, ‘we need to do better at that.’ Former 9/11 commissioner Bob Kerrey said the government’s inability to share information effectively poses ‘a real risk as well as a missed opportunity.’”

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Employees with initiative and creativity are great for your business, but would you hire this guy?

“An accused lobster thief was trapped by police yesterday after they said he tried to leave a Rte. 9 grocery store with more than $50 worth of lobsters - disguised as a bag of mussels.” See Lobster theft suspect pinched.

Here’s someone else you’d hate to have on your payroll. Did you hear about the jewelry store in San Diego that raised $12,000 for a cancer-stricken employee? This employee was later arrested for stealing $45,000 in merchandise, including one ring valued at $30,000. Her employers also suspected that she didn’t really have cancer.

This costly (and embarrassing) incident might have been prevented, if the jewelry store had had access to the right technology and the right data before hiring this employee. By linking the hiring process to the latest identity resolution software that can aggregate information from multiple internal and external data sources, the store could have learned about the previous incident and avoided a great deal of unneeded publicity and expense.

With an identity resolution system in place, the jewelry store would have discovered that this employee had been sued by another employer for stealing $55,000 from a high school cheerleading program. It’s pretty much impossible to tell if a potential employee is a good or bad person by simply looking at their resume. However, identity resolution software aggregates information from existing data stores, turning up lawsuits, convictions, bad debt, driving histories and the like to form a clear, comprehensive, composite depiction of your employees.

According to an annual survey conducted by the University of Florida, the average retailer loses an estimated 1.5% to 2.0% of their revenue each year due to customer, vendor, and employee fraud with 2006 total losses tagged at $41.6 billion. Employees actually steal more than shoplifters and moreover most are never caught:

“According to the U.S. Department of Commerce, 75 percent of all employee thefts went unnoticed. The average amount taken in retail was estimated at $1,750 per incident, and $3,400 per incident in all other business.” (For more, click here.)

It’s obviously easier not to hire high risk employees than to catch them in the act.

If you’re still relying on old technology to screen employees, here’s a few people you might want to warn HR about:

Lord of the (Shoplifting) Rings
“A man has pleaded guilty to charges in a three-state shoplifting ring that prosecutors say led to Internet sales of more than $400,000 in stolen merchandise.

Blue light bust-up at Kmart
“He punched one employee, tackled another, and struck another. He kept assaulting and threatening them until police arrived; then he struggled with police. [..] They found that he had outstanding warrants for two charges of third-degree theft of property and one charge of second-degree theft of property.”

Man Caught Switching Bar Codes, Three Days in a Row
“The next day, December 16, Ryan said investigators learned that Haneborg switched a price sticker on a Porter-Cable cordless hammer drill in the same manner. Ryan said Haneborg allegedly removed a Makita circular saw out of its box and put it in the box of a cheaper model then checked out.”

Police catch ‘beer bandit’
“The Wal-Mart beer bandit apparently went back for refills, only to be grabbed by several store employees.”

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