Western Alliance Bank’s Technology Prevents Class Action Fraud
Western Alliance Bank has co-developed innovative technology to combat fraud in class action lawsuits. The Triangle of Fraud Protection, a collaborative effort between Digital Disbursements, ClaimScore, and settlement administrators, has shown remarkable success in preventing fraudulent claims.
The Problem: Surging Fraudulent Claims
Between 2021 and 2023, class action and mass tort settlements experienced an alarming 190-fold surge in fraudulent claims, rising from approximately 400,000 to over 80 million. Fraud schemes often involve collaboration among various actors, including money mules and other fraud ecosystem participants.
Collaborative Approach to Fraud Prevention
Recognizing the need for a unified solution, Western Alliance subsidiary Digital Disbursements and ClaimScore created the Triangle of Fraud Protection in early 2024. This three-faceted defense strategy combines:
- Digital Disbursements’ digital payments platform for the class action legal industry
- ClaimScore’s AI-based claim validation software with real-time reporting capabilities
- Settlement administrators’ existing fraud detection and prevention tools
The combined solution provides real-time screening capabilities and transparent dashboards accessible to all stakeholders, including judges, plaintiff attorneys, and defense attorneys.
Successful Results
In its first integrated case in June 2024, the Triangle of Fraud Protection identified and prevented over 100 million fraudulent claims, potentially saving $6 million in fraudulent payouts. For 2024 overall, the collaboration prevented more than 800 million fraudulent claims, averting over $100 million in potential fraudulent payouts.
This achievement translates to a return on investment exceeding 999% for 2024 alone. The number of claims with significant indications of fraud decreased by more than 40% in 2024, from 81 million to 48 million, suggesting that fraudsters have been significantly deterred.
Key Players Behind the Innovation
The success of the Triangle of Fraud Protection is attributed to the deep domain expertise of its co-founders:
- Jeff Richardson of Digital Disbursements
- Donald Beshada of ClaimScore
Both have over 50 years of collective experience in litigating class actions and mass torts as lawyers, enabling them to design a highly effective and targeted solution.
The image shows the Western Alliance Bank headquarters, representing the bank’s involvement in the innovative technology.
The Triangle of Fraud Protection demonstrates the power of collaboration in combating fraud in class action lawsuits, providing a model for future innovations in the legal and financial sectors.
