Virtually every industry is vulnerable to fraud. Each year, fraudulent activities account for billions of dollars lost in the insurance, banking, health care, retail, transportation, manufacturing, and communications industries. Likewise, fraudulent activity riddles our federal and local governments.

The U.S. General Accounting Office estimates that $1 out of every $7 spent on Medicare is forfeited to fraud and abuse. Depending on the reference, Medicare loses up to $20 billion to fraudulent or unnecessary claims each year. The insurance industry estimates that about 25 percent of each premium dollar is spent on covering fraudulent or inflated claims. This puts the yearly costs at an estimated $30 billion nationally.

A USA Today article stated that the identity theft epidemic has affected 27 million people over the last 5 years, with 10 million in 2002 alone. It is estimated that almost $50 billion has been lost to identify theft. To put these numbers into perspective, consider that only 69 of the 182 countries recognized in 2002 had a Gross Domestic Product (GDP) over $20 billion. In other words, the losses from fraudulent activity in the U.S. insurance market alone exceed the GDP for more than half of the world's countries.

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