8. Photographers could send in unused coupons or fake coupons. Photographers have exclusive rights to customers in their specified areas. They could encourage customers to leave the coupons at the photo studio so they are not lost or misplaced. If a customer did not come in during the 6-month period, the photographer could submit his unused coupon.
If the coupon book is not left for safekeeping, the photographer could scan a coupon, change the name to a customer who did not use their coupon, print it, and send it in.
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Abnormally high rate of customers using their coupons
Coupons that do not look authentic.
Customer complaints.
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Photographers given an exclusive area.
Customers not signing coupons or otherwise verifying they had a sitting.
Photographers could send in coupons for non-current customers as they are not required to verify if customers are current before a sitting. Nor does the company verify that submitted coupons are for a current customer.
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Pre-number coupons.
Have a code on the coupon that the photographer has to call in to the company (or enter on a website) before authorization is granted to take the photo.
For each photographer, analyze what percent of customers use their coupons looking for abnormally high usage rates.
Require photographers to verify that customers are current before each sitting.
Do not pay for customers that are no longer current.
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9. Heirloom can defraud the bank by misstating the maximum amount Heirloom can borrow.
Notes payable are in the borrowing base until they are 60 days overdue. To maximize that base, Heirloom could lap customer payments. They could take a monthly payment on a current account and apply it to an account that is just about to go 60 days overdue. The inflated list could be used to support a higher than justified loan.
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Abnormally high number of customers 30-60 days overdue.
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Bank does not verify data from Heirloom.
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Analysis of the list, such as
An increase in the number or percentage of accounts on the list submitted to the bank with no comparable increase in sales.
Comparison of monthly lists to see if the same names appear month after month.
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