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Why Thomson Reuters Risk & Fraud Solutions?

After a comprehensive process evaluating alternative solutions, Palmar Forensics selected Thomson Reuters CLEAR as the backbone of its investigative and vendor credentialing workflows for several reasons.

The first was comprehensiveness and navigability; full reports are thorough yet easier to navigate than alternatives. Their prior tool generated 200 to 300-page reports with lots of noise; CLEAR’s reports contain less irrelevant information, are structured, and searchable. As Joseph Palmar, CEO of Palmar Forensics puts it, “CLEAR is more effective and efficient. The CLEAR report is still 60 or 70 pages long, but it’s simple to navigate. It’s just so much easier to find out what you need to know. And it’s complete and accurate — it’s so comprehensive.”

CLEAR’s algorithms and logic were also praised. Particularly the strong relationship and ownership discovery that uncovers shell or sister companies and bid-rigging; targeted modules like CLEAR Risk Inform, CLEAR ID Confirm, and seamless alerts for continuous monitoring. These features gave CLEAR a competitive advantage.

Lastly, Palmar called out the credibility of Thomson Reuters and CLEAR within the industry, making it easy for him to trust.

“The Thomson Reuters CLEAR solution is the gold standard of fraud investigations. Law enforcement and the federal government both use it. I’ve lost count of how many meetings I’ve walked into where we’ve mentioned that we use CLEAR and they instantly realize we know what we’re talking about,” he says.

The value of CLEAR

Since 2012, Palmar Forensics has been using CLEAR — which provides comprehensive, up-to-date information from public records, sanctions databases, and media coverage. It also performs ID validation through CLEAR ID Confirm and subject-risk analytics through CLEAR Risk Inform.

When onboarding new vendors, Palmar Forensics uses CLEAR as the backbone of its proprietary vendor credentialing tool, VETTED®, to verify that the suppliers its clients want to work with are legitimate and independent businesses — and that their officers and or directors are “clean.” CLEAR does so by researching areas such as current and previous addresses, business relationships, criminal records, and creditworthiness. Then, they can be onboarded with greater certainty.

“We make sure clients are dealing with reputable organizations that aren’t shell companies, that aren’t linked to other similar businesses for bid-rigging purposes, and that the company’s officers aren’t criminals or have a nefarious history. In our world, that’s not an unusual situation — it’s an everyday occurrence,” says Palmar.

Uncovering hidden insights

If clients have suspicions about an existing vendor, Palmar Forensics uses CLEAR as part of an automated tool called VETTED to do a deeper dive to check for undisclosed relationships with other organizations, criminal links or backgrounds, or any lawsuits, liens or judgements. In one recent example, an investigation into a list of vendors provided by a client uncovered a conflict of interest in the awarding of contracts — several “separate” vendors were owned by the same people. In another example, one company owner was unaware that their business partner of 20 years had been charged with assault with a deadly weapon.

“Using Thomson Reuters Risk & Fraud Solutions as the backbone of VETTED gives us insights we wouldn’t otherwise have, so clients can understand who they’re doing business with,” explains Palmar. “CLEAR allows us to identify whether there’s anything in a company or individual’s background that’s fraudulent or in any way problematic. We have a suite of tools that we use, but the backbone of everything is CLEAR from Thomson Reuters.”

CLEAR alerts are incredibly useful, according to Palmar. By setting up alerts on certain entities and officers, it is notified about any potential reputational or financial hit to its clients, after the initial onboarding verification process. For Palmar Forensics, this continuous monitoring adds another important layer to the solution’s capabilities.

When considering the value of CLEAR, Palmar says decision-makers need to think beyond strict return on investment (ROI) metrics. That’s because vendor fraud does not usually happen at volume. But when it does occur, the damage can be incalculable. So, while only a small fraction of vendors commit fraud or have criminal associations, organizations must do everything they can to root them out. CLEAR enables them to do that — and that’s where its true value lies.

He cites the example of a charitable foundation where seven of its 500 vendors — accounting for 1% of its vendor base — stole $3 million over the course of five years. In addition to the direct financial loss, this raised the risk that donors would no longer donate money to that organization. Similarly, in the health care sector, if fraud is uncovered in the Medicaid or Medicare space, companies may find their government funding is suspended or withheld, which could have significant implications for business continuity beyond the loss itself.

“You need to spend money to prevent fraudulent expenditures and protect your reputation,” Palmar says. “If you have a massive fraud, your stock price may be affected but there may be even bigger problems to deal with. You can’t measure reputational harm, but one mistake can destroy the reputation you’ve worked so hard to develop.”

“To my mind, it’s better to do the preemptive work to protect the organization. At least if you’ve done your checks, that’s something you can say to the media, or to the board, as opposed to saying no, we didn’t do that because there was no ROI for doing so.”