Other Fraud Schemes

Maria, a successful restaurateur, has been informed of an unusually attractive investment opportunity by a recent acquaintance and decides to invest in it. Several months and a couple of underwhelming payments later, Maria grows frustrated with the diminishing disbursements and attempts to withdraw her money. After several weeks of delay, she realizes that the promoter seems to have vanished, along with her investment. Maria is the victim of which of the following fraudulent ploys? A. A Ponzi scheme B. An illegal pyramid C. A dog and pony scam D. A fly and buy scheme

A. A Ponzi scheme

Which of the following is NOT a red flag of a fraudulent payment card transaction? A. A customer buys a small number of expensive items at one time. B. A customer insists on taking a large item home even when delivery is included. C. A customer cannot provide a photo identification when requested. D. A customer charges many expensive items to a newly valid card.

A. A customer buys a small number of expensive items at one time.

Which of the following situations is often present in real estate fraud schemes? A. A false appraisal report B. The services of an arm's-length legal representative C. No expert assistance at closing D. All of the above

A. A false appraisal report

All of the following are examples of schemes that specifically target older individuals EXCEPT: A. A fraudster offers to eliminate an individual's credit card debt after the individual pays for the service with their card. B. A fraudster convinces a victim that their computer has a virus and offers unnecessary repair services in exchange for a fee. C. A fraudster pretends to be the victim's grandchild and requests money to help with a difficult financial situation. D. A fraudster informs an individual that they won a prize but must pay a sum of money before they can receive it.

A. A fraudster offers to eliminate an individual's credit card debt after the individual pays for the service with their card.

Which of the following BEST describes social engineering? A. A method for gaining unauthorized access to a computer system in which an attacker deceives victims into disclosing personal information or convinces them to commit acts that facilitate the attacker's intended scheme B. A method for gaining unauthorized access to a computer system in which an attacker bypasses a system's security through the use of an undocumented operating system and network functions C. A method for gaining unauthorized access to a computer system in which an attacker searches through large quantities of available data to find sensitive information that they can use to facilitate their intended scheme D. A method for gaining unauthorized access to a computer system in which an attacker hides near the target to obtain sensitive information that they can use to facilitate their intended scheme

A. A method for gaining unauthorized access to a computer system in which an attacker deceives victims into disclosing personal information or convinces them to commit acts that facilitate the attacker's intended scheme

Which of the following is the MOST ACCURATE definition of a Trojan horse? A. A program or command procedure that gives the appearance that it is useful but actually contains hidden malicious code that causes damage B. A software program that contains various instructions that are carried out every time a computer is turned on C. A type of software that collects and reports information about a computer user without the user's knowledge or consent D. A virus that changes its structure to avoid detection

A. A program or command procedure that gives the appearance that it is useful but actually contains hidden malicious code that causes damage

Which of the following BEST illustrates the use of technical surveillance for purposes of corporate espionage? A. A spy hacks into a target computer and monitors an employee's communications. B. A spy uses a phony employee badge to enter an office and take a sensitive document. C. A spy impersonates a help desk representative to obtain an employee's network password. D. A spy creates a deceptive website to trick employees into entering confidential information.

A. A spy hacks into a target computer and monitors an employee's communications.

A data classification policy can BEST be described as a(n): A. Administrative security control B. Technical security control C. Physical security control D. Application security control

A. Administrative security control

Which of the following is the BEST definition of the automobile insurance scheme known as ditching? A. An insured falsely reports a vehicle as stolen to collect on an insurance policy. B. An agent inflates their commissions by pressuring customers to unnecessarily replace existing policies for new ones. C. An agent collects a customer's premium but does not remit the payment to the insurance company. D. An insured has two insurance policies in place and files claims with both.

A. An insured falsely reports a vehicle as stolen to collect on an insurance policy.

ABC Bank recently acquired a new portfolio of consumer loans. Because this particular loan portfolio is experiencing a default rate that is higher than normal, management has asked Bradley, a Certified Fraud Examiner (CFE), to evaluate the portfolio. Bradley notices that the loan package was sold without recourse to the broker, the brokerage fee was high relative to other purchases, and the broker is no longer in business. Which of the following types of schemes has Bradley MOST LIKELY uncovered? A. Brokered loan fraud B. Letter of credit fraud C. Daisy chain fraud D. Money transfer fraud

A. Brokered loan fraud

Which of the following is NOT a red flag of health care provider fraud? A. Consistently low percentage of coding outliers present B. Lack of supporting documentation for claims under review C. Medical records that were created long after the alleged patient visit D. Details in supporting documents that are inconsistent with the claim

A. Consistently low percentage of coding outliers present

A virus that loads itself onto the target system's memory, infects other files, and then unloads itself is called a: A. Direct-action virus B. Boot sector virus C. Network virus D. None of the above

A. Direct-action virus

Which of the following is NOT a common carrier of malware? A. Dual in-line memory modules B. Freeware and shareware files C. Email attachments D. Files downloaded from the internet

A. Dual in-line memory modules

___________ is the technical security control involving deliberate scrambling of a message so that it is unreadable except to those who hold the key for unscrambling the message. A. Encryption B. Firewall security C. Customer validation D. Alteration of input

A. Encryption

A draw request on a construction loan should be accompanied by all of the following EXCEPT: A. Expenses from similar contracts B. Inspection reports C. Change orders, if applicable D. Lien releases from subcontractors

A. Expenses from similar contracts

Which of the following BEST describes how a baiting scheme works in the context of identity theft? A. Fraudsters trick victims into inserting malware-infected data storage devices into their computers. B. Fraudsters use telephone calls or voice messages to manipulate targets into revealing personal or business information. C. Fraudsters use imitation websites to trick computer users into entering sensitive data. D. Fraudsters impersonate the victim's bank to persuade the victim into releasing information.

A. Fraudsters trick victims into inserting malware-infected data storage devices into their computers.

Which of the following are information security goals that an e-commerce system should endeavor to meet for its users and asset holders? I. Penetrability of data II. Materiality of data III. Integrity of data IV. Availability of data A. III and IV only B. II and III only C. I, II, and III only D. I, II, III, and IV

A. III and IV only

Which of the following is NOT an appropriate technique for detecting a cost mischarging scheme involving labor? A. Inspecting questioned goods or materials by examining packaging, appearance, and description B. Reviewing the standard and actual labor rates to determine if there are any significant differences C. Comparing the direct and indirect labor account totals from the prior year to the current year D. Examining the total hours expended on the contract and comparing them to hours billed

A. Inspecting questioned goods or materials by examining packaging, appearance, and description

All of the following can help prevent a computer from being infected by malicious software EXCEPT: A. Installing shareware into a system's root directory B. Using anti-malware software C. Updating with the latest security patches D. Updating the operating system regularly

A. Installing shareware into a system's root directory

Which of the following refers to the type of network security systems that are designed to supplement firewalls and other forms of network security by detecting malicious activity coming across the network or on a host? A. Intrusion detection systems B. Network access controls C. Intrusion admission systems D. Network address prevention systems

A. Intrusion detection systems

Which of the following statements concerning fraud that involves special care facilities is TRUE? A. Many patients in special care facilities are less likely to report fraud because they are often not responsible for their own financial affairs B. It is difficult for fraud in special care facilities to be committed in high volume because patients are located in close proximity to each other C. When fraud is committed against special care facilities, it is common for victims to obtain repayment from the perpetrators D. All of the above

A. Many patients in special care facilities are less likely to report fraud because they are often not responsible for their own financial affairs

Which of the following is NOT a common red flag of procurement fraud schemes involving collusion among contractors? A. More competitors than usual submit bids on a project or product. B. Bid prices fall when a new competitor enters the competition. C. All contractors submit consistently high bids. D. The same contractors bid on each project or product.

A. More competitors than usual submit bids on a project or product.

A contractor who delivers materials of lesser quality than specified in the contract or uses a lower quality staff than specified in the contract might be involved in which of the following types of procurement fraud schemes? A. Nonconforming goods or services fraud B. Labor mischarging fraud C. Product division fraud D. Material mischarging fraud

A. Nonconforming goods or services fraud

All of the following are health care fraud schemes that are commonly perpetrated by patients EXCEPT: A. Over-utilization B. Doctor shopping C. Third-party fraud D. Multiple claims fraud

A. Over-utilization

Which of the following statements about ransomware is TRUE? A. Ransomware is a form of malware that locks a user's operating system and restricts access to data files until a payment is made. B. Ransomware is a classification of malware designed to simplify or automate online criminal activities. C. Ransomware is a program or command procedure that gives the appearance of being useful but actually contains hidden malicious code that causes damage. D. Ransomware is a type of software that collects and reports information about a computer user without the user's knowledge or consent.

A. Ransomware is a form of malware that locks a user's operating system and restricts access to data files until a payment is made.

Which of the following is NOT an appropriate technique for detecting a nonconforming goods or services scheme? A. Reviewing the number of qualified bidders who submitted proposals B. Segregating and identifying the source of the suspect goods or materials C. Reviewing correspondence and contract files for indications of noncompliance with specifications D. Reviewing the contractor's statements, claims, invoices, and supporting documents

A. Reviewing the number of qualified bidders who submitted proposals

Cooper is an intelligence professional for Whetstone Intelligence, a competitive intelligence firm. He is tasked with gathering intelligence about Cryptic Global, the major competitor of Whetstone's biggest client. To gather the intelligence, Cooper infiltrates Cryptic Global's office by posing as a member of its cleaning crew and collects information left around employees' computers and desks. Cooper's approach is an example of: A. Scavenging B. Dumpster diving C. Shoulder surfing D. Spoofing

A. Scavenging

__________ is the term used for including additional coverages in an insurance policy without the insured's knowledge. A. Sliding B. Churning C. Twisting D. None of the above

A. Sliding

Which of the following is an example of traditional identity theft? A. Stealing an individual's personal information and opening an account in their name B. Creating a fictitious name, birthdate, and address to apply for a loan C. Applying for a credit card using a real government identification number and a fake name D. Using a child's government identification number to create a false identity

A. Stealing an individual's personal information and opening an account in their name

Which of the following is a way that dishonest contractors collude to circumvent the competitive bidding process? A. Submit token bids that are not serious attempts to win the contract. B. Submit bids that are competitive in price. C. Use obscure publications to publish bid solicitations. D. Submit invoices for work that was not performed or materials that were not delivered.

A. Submit token bids that are not serious attempts to win the contract.

The solicitation phase of procurements involving open and free competition includes which of the following activities? A. The prospective contractors prepare and submit their bids. B. The procuring entity identifies its needs and develops the criteria used to award the contract. C. The procuring entity performs its contractual obligations. D. The procuring entity determines the method for acquiring the goods or services.

A. The prospective contractors prepare and submit their bids.

Which of the following is NOT a red flag that might indicate the existence of a need recognition scheme? A. The purchasing entity's materials are being ordered at the optimal reorder point. B. The purchasing entity has unusually high requirements for stock and inventory levels. C. The purchasing entity does not have a satisfactory list of backup suppliers. D. The purchasing entity has large numbers of surplus items written off as scrap.

A. The purchasing entity's materials are being ordered at the optimal reorder point.

Jeff works as a teller at a bank. One of Jeff's friends came in as a customer and presented a cashier's check. Jeff could tell that the check was counterfeit, but the friend convinced him to cash it for a share of the proceeds. Which of the following BEST describes the scheme in which Jeff engaged? A. Unauthorized disbursement of funds to outsiders B. Unauthorized use of collateral C. False accounting entry D. Theft of physical property

A. Unauthorized disbursement of funds to outsiders

Examples of fraud schemes perpetrated by health care institutions and their employees include all of the following EXCEPT: A. Unintentional misrepresentation of the diagnosis B. Billing for experimental procedures C. Improper contractual relationships D. DRG creep

A. Unintentional misrepresentation of the diagnosis

Which of the following is the BEST example of shoulder surfing? A. Watching a customer enter a PIN at an ATM B. Leaving a spyware-infected flash drive in a workplace break room C. Following an authorized person into a restricted area D. Accessing a computer network by convincing an authorized user to share log-in information

A. Watching a customer enter a PIN at an ATM

_______________ targets groups of people who have some social connection.

Affinity fraud

Which of the following real estate loan schemes MOST ACCURATELY describes an air loan? A. A fraudster files fraudulent property transfer documents with the property owner's forged signature and then takes out a loan using the property as collateral. B. A builder, in collusion with an appraiser and other real estate insiders, fraudulently applies for a loan to construct a building on a nonexistent property and keeps the proceeds. C. A loan applicant falsifies their income sources to qualify for a mortgage. D. A property developer applying for a loan submits instances of previous development experience that are fictitious or that they had no part in.

B. A builder, in collusion with an appraiser and other real estate insiders, fraudulently applies for a loan to construct a building on a nonexistent property and keeps the proceeds.

High percentages of returns, missing compliance certificates, and evidence of falsified test inspection results are red flags of which of the following procurement fraud scenarios? A. A procuring employee manipulating the bidding process to benefit a favored contractor B. A contractor delivering goods or services that do not conform to the contract specifications C. A contractor charging the procuring entity for labor costs that are not allowable D. Two or more competing contractors agreeing to refrain from bidding

B. A contractor delivering goods or services that do not conform to the contract specifications

Which of the following scenarios illustrates a fraudster's use of social engineering? A. A fraudster without an employee badge gains access to a secure facility by following legitimate employees who are oblivious to the fraudster's presence B. A fraudster calls a company employee and requests sensitive information while claiming to be a coworker whose systems are down C. A fraudster has lunch at a restaurant where a target company's employees are known to eat with the intention of overhearing sensitive conversations D. None of the above

B. A fraudster calls a company employee and requests sensitive information while claiming to be a coworker whose systems are down

Which of the following types of transactions is LEAST LIKELY to use a person-to-person (P2P) payment system? A. A person making an online donation to a charity B. A person buying groceries at a supermarket C. A person transferring money to a friend abroad D. A person paying for an item on an online auction site

B. A person buying groceries at a supermarket

Which of the following is the MOST ACCURATE definition of a firewall? A. A system that authenticates users by monitoring their statistical characteristics, such as typing speed and keystroke touch B. A system that blocks unauthorized or unverified access to network assets by surveying incoming and outgoing transmissions C. A device that takes information and scrambles it so that it is unreadable by anyone who does not have a specific code D. None of the above

B. A system that blocks unauthorized or unverified access to network assets by surveying incoming and outgoing transmissions

Which of the following is the MOST ACCURATE definition of a software keylogger? A. A self-replicating computer program that penetrates operating systems to spread malicious code to other systems B. A type of program that monitors and logs the keys pressed on a system's keyboard C. A type of software that, while not definitely malicious, has a suspicious or potentially unwanted aspect to it D. A program or command procedure that gives the appearance that it is useful but actually contains hidden malicious code that causes damage

B. A type of program that monitors and logs the keys pressed on a system's keyboard

Which of the following does NOT constitute an electronic funds transfer (EFT)? A. A transfer of funds from a checking account to a savings account performed on a personal computer B. An airline ticket purchased through the internet with the use of a credit card C. The computer-initiated deposit of an employee's paycheck directly into the employee's bank account D. A customer's use of a debit card to purchase dinner at a restaurant

B. An airline ticket purchased through the internet with the use of a credit card

Which of the following is a technical security control that involves application-level controls implemented to prevent data from being accessed, stolen, modified, or deleted by unauthorized users? A. Data classification B. Application security C. Network security D. Multifactor authentication

B. Application security

AD&N Railway solicits bids to lay several miles of new railroad track. Bob, who works for AD&N, writes the specifications for the project to provide that AD&N will only contract with companies that have more than 25 years of experience. Bob knows that only B&P Track Co., one of the prospective bidders, has more than 25 years of experience. What type of procurement fraud scheme has taken place? A. Bid suppression B. Bid tailoring C. Bid alteration D. Bid division

B. Bid tailoring

Which of the following scenarios is an example of a multiple claims health care fraud scheme as perpetrated by a patient? A. Julia uses a stolen government identification number to impersonate a stranger and obtain medical services for herself. B. Bill obtains double reimbursement for his hip replacement surgery by filing claims with different insurers. C. James visits several local emergency rooms and falsely claims to have severe back pain in an effort to obtain prescription pain medication. D. Roberta files medical claims with her ex-husband's private insurer even though the divorce makes her ineligible for benefits under the policy.

B. Bill obtains double reimbursement for his hip replacement surgery by filing claims with different insurers.

A fraudster uses the email account of a company's president to impersonate the president and ask an employee to make a wire transfer. This can BEST be described as which of the following types of fraud schemes? A. Shoulder surfing B. Business email compromise C. Reverse social engineering D. Pharming

B. Business email compromise

Elizabeth, a grocery store cashier, slips on a wet floor and falls while at work. She is unharmed but pretends to suffer an injury from the fall. She files a claim against the store's workers' compensation insurance policy and collects payments from the insurance carrier. She also misses several weeks of work, even though she is fully capable of working. Under which category of workers' compensation schemes does Elizabeth's scheme fall? A. Agent fraud B. Claimant fraud C. Organized fraud D. Premium fraud

B. Claimant fraud

A patient goes to the doctor for a medical condition. The doctor identifies the condition but decides to order additional lab testing even though it is unnecessary. The patient is sent to a lab owned by the same doctor, so the doctor will profit from the unnecessary testing. Which of the following BEST describes the doctor's scheme? A. Rolling lab B. Clinical lab C. Fictitious provider D. Front organization

B. Clinical lab

Which of the following types of malware can be used to generate illicit income in the form of cryptocurrency, while slowing an infected computer and causing victims to incur costs related to power usage or cloud storage? A. Keyloggers B. Coin miners C. Spyware D. Overwrite viruses

B. Coin miners

Which of the following is NOT an appropriate technique for detecting a nonconforming goods or services scheme? A. Interviewing procurement personnel about the presence of any red flags B. Determining if contract costs have exceeded or are expected to exceed the contract value C. Conducting unannounced inspections of questioned goods or materials D. Reviewing the inspection and test reports of questioned goods or materials

B. Determining if contract costs have exceeded or are expected to exceed the contract value

A doctor provides services to both patients who pay directly and patients whose bills are paid by a government program. To make the services more attractive to patients outside the coverage of the government program, the doctor gives patients who pay directly a discount that is not applicable to patients under the program. Which of the following BEST describes the provider's scheme? A. Fictitious claim B. Disparate price C. Overutilization D. Upcoding

B. Disparate price

Mario, an employee of a person-to-person (P2P) payment company, has been writing down the account numbers and passwords of customer accounts with the intent of fraudulently using them to pay for items he purchases online. Mario is engaging in: A. Check fraud B. Electronic funds transfer fraud C. Credit card transfer fraud D. None of the above

B. Electronic funds transfer fraud

Which of the following is NOT a type of scheme that is commonly used by fraudsters to take advantage of older individuals? A. Sweepstake and prize schemes B. Fill-and-split games schemes C. Tech-support schemes D. Home improvement schemes

B. Fill-and-split games schemes

Karl finds a residential property with a nonresident owner. He then forges contractual property documents showing that the owner is transferring ownership of the property completely to Karl, such as would normally happen during a property sale. The property owner is unaware that Karl has created and filed the documents. Later, Karl takes the falsified documents to a lender and borrows money against the property. Which of the following MOST ACCURATELY describes Karl's scheme? A. Property flipping B. Fraudulent sale C. Unauthorized draw on home equity line of credit D. Air loan

B. Fraudulent sale

Which of the following are considered red flags of insider cyberfraud? I. Access privileges limited to those required to perform assigned tasks.II. Access logs are not reviewed.III. Production programs are run during normal business hours.IV. Exception reports are not reviewed and resolved. A. I, II, III, and IV B. II and IV only C. I and III only D. III and IV only

B. II and IV only

Which of the following BEST describes the difference between a flipping scheme and a flopping scheme in the context of mortgage fraud? A. In a flopping scheme, the lender is not one of the potential victims of the scheme. B. In a flopping scheme, the value of the first transaction is deflated instead of inflating the second transaction. C. In a flopping scheme, the second transaction in the scheme usually occurs several years after the first. D. In a flopping scheme, the original seller always ends up as the final owner of the property.

B. In a flopping scheme, the value of the first transaction is deflated instead of inflating the second transaction.

Which of the following situations would NOT constitute health care fraud committed by an insurance company in most jurisdictions? A. Failing to pay a claim when it is properly submitted, all of the required information is included, and there are benefits available B. Instituting procedures to detect fraudulent claims when acting as an intermediary for a government health care program C. Submitting false cost data to health care regulators to justify rate increases D. Negotiating discounts with providers but not providing the discount to consumers

B. Instituting procedures to detect fraudulent claims when acting as an intermediary for a government health care program

Which of the following would be the LEAST LIKELY target of an affinity fraud scheme? A. Immigrant groups B. Large corporations C. Religious communities D. Professional associations

B. Large corporations

Which of the following BEST describes a linked financing loan fraud scheme? A. Insiders in different banks cause their banks to lend funds or sell loans to other banks with agreements to buy their loans. B. Large deposits (usually brokered deposits) are offered to a bank on the condition that loans are made to particular individuals affiliated with the deposit broker. C. Borrowers pledge the same collateral with different lenders before liens are recorded and without telling the lenders. D. Unqualified borrowers misrepresent personal creditworthiness, overstate their ability to pay, and misrepresent characteristics of a housing unit.

B. Large deposits (usually brokered deposits) are offered to a bank on the condition that loans are made to particular individuals affiliated with the deposit broker.

Which of the following is an accurate definition of SMiShing? A. Stealing data from payroll accounts through the use of computers B. Obtaining sensitive data through the use of text messages C. Stealing private financial data through the use of voice mail D. Obtaining sensitive data by impersonating a government official

B. Obtaining sensitive data through the use of text messages

Which of the following is NOT a common type of payment card fraud? A. Advance payments B. Profiling C. Card counterfeiting D. Skimming

B. Profiling

___________ involve paying an individual to undergo unnecessary medical procedures that are then billed to the patient's insurer or health care program. A. Fictitious patient schemes B. Rent-a-patient schemes C. False cost reporting schemes D. DRG creep schemes

B. Rent-a-patient schemes

Which of the following practices is a potential indicator of a bid splitting scheme? A. Two or more purchases from the same supplier in amounts just above competitive bidding limits B. Sequential purchases under the competitive bidding limits that are followed by change orders C. Frequent use of sole-source procurement contracts D. Low employee turnover in an organization's procurement department

B. Sequential purchases under the competitive bidding limits that are followed by change orders

When a fraudster calls someone at the target company and cajoles or tricks the person into providing valuable information, that corporate espionage technique is referred to as which of the following? A. Replicating B. Social engineering C. Spamming D. None of the above

B. Social engineering

The MOST COMMON giveaway scheme, in which a postcard arrives in the mail telling the recipient they have already won a prize such as a luxurious vacation or cash, is known as: A. The "Fly and Buy" B. The "1-in-5" C. The "Bait and Switch" D. None of the above

B. The "1-in-5"

All of the following are red flags of fraudulent insurance claims EXCEPT: A. A claim is made a short time after the policy's inception. B. The insured has not made many insurance claims in the past. C. A fire loss claim does not include family heirlooms or other sentimental items. D. A theft claim includes a lot of recently purchased property without proof of purchase.

B. The insured has not made many insurance claims in the past.

Which of the following is the MOST ACCURATE description of logical access? A. The process by which users are allowed to access and use physical objects B. The process by which users are allowed to use computer systems and networks C. The process by which computer systems' contents are encrypted D. The process by which users can bypass application security over the software and libraries

B. The process by which users are allowed to use computer systems and networks

Which of the following activities is included in the post-award and administration phase of procurements involving open and free competition? A. The procuring entity evaluates the bids or proposals. B. The procuring entity performs its contractual obligations. C. The procuring entity issues the solicitation document. D. The procuring entity develops the bid specifications.

B. The procuring entity performs its contractual obligations.

A health care provider's practice of charging a comprehensive code, as well as one or more component codes, by billing separately for subcomponents of a single procedure is known as ______________. A. Segregating B. Unbundling C. Subdividing D. Overcoding

B. Unbundling

Michael, a medical provider, performs an appendectomy, a procedure that is supposed to be billed as one code. Instead, he intentionally submits two codes for the same procedure: one for an abdominal incision and one for the removal of the appendix. Which of the following BEST describes Michael's scheme? A. Procedure compounding B. Unbundling C. Fictitious services D. Decompressing

B. Unbundling

Which of the following BEST illustrates the concept of human intelligence? A. A corporate spy installs software on the computer of an employee from a competing company to monitor that employee's communications. B. A corporate spy creates a deceptive website that tricks employees from a competing company into divulging confidential information. C. A corporate spy poses as a customer of a competing company to elicit information from the competitor's salespeople. D. A corporate spy breaks into a competing company's office and steals sensitive information while employees are attending an off-site event.

C. A corporate spy poses as a customer of a competing company to elicit information from the competitor's salespeople.

Which of the following health care frauds would BEST be described as a fictitious services scheme? A. A patient fraudulently reports symptoms they do not actually have to receive a prescription. B. A patient who is not covered under a health care program pretends to be a covered party to receive medical services. C. A doctor uses the identifying information of patients the doctor has never serviced to bill an insurer or health care program. D. A doctor intentionally submits a bill to an insurer or health care program using improper codes for the services provided.

C. A doctor uses the identifying information of patients the doctor has never serviced to bill an insurer or health care program.

Which of the following BEST describes phishing? A. A method for acquiring sensitive information in which an attacker hides near the target to gain unauthorized access to a computer system B. A method for acquiring sensitive information needed to facilitate a specific scheme by searching through large quantities of available data C. A method for acquiring sensitive information by falsely claiming through electronic communication to be from an entity with which the target does business D. A method for acquiring sensitive information by bypassing a computer system's security through the use of an undocumented operating system and network functions

C. A method for acquiring sensitive information by falsely claiming through electronic communication to be from an entity with which the target does business

Rowena, a Certified Fraud Examiner (CFE), is an auditor for the government's Office of Audit and Evaluation. While conducting a routine audit of ten construction contracts from the Public Works Department, Rowena notices some unusual characteristics in the contracts' bidding documents. The contracts were all awarded to the same contractor, and the specifications in all ten contracts had unreasonably narrow specifications for the types of goods being procured. Which of the following types of procurement fraud schemes is MOST LIKELY at issue here? A. A procurement employee has intentionally included unallowable costs in the projects' contracts and budgets. B. A procurement employee divided a large project into several small projects that fall below the mandatory bidding level. C. A procurement employee has drafted bid specifications in a way that gives an unfair advantage to a certain contractor. D. A procurement employee convinced their employer that it needs excessive or unnecessary products or services.

C. A procurement employee has drafted bid specifications in a way that gives an unfair advantage to a certain contractor.

Which of the following is the MOST ACCURATE definition of spyware? A. Any software application in which advertising banners are displayed while a program is running B. A program or command procedure that gives the appearance that it is useful but actually contains hidden malicious code that causes damage C. A type of software that collects and reports information about a computer user without the user's knowledge or consent D. A self-replicating computer program that penetrates operating systems to spread malicious code to other systems

C. A type of software that collects and reports information about a computer user without the user's knowledge or consent

A confidence scheme designed to part victims from their money by falsely promising the future delivery of a product or service in exchange for an up-front payment is called a(n): A. Scavenger scheme B. Home-based business scheme C. Advance-fee scheme D. Bait and switch scheme

C. Advance-fee scheme

Which of the following situations would be MOST INDICATIVE of a customer committing new account fraud at a bank? A. A customer deposits a substantial amount of funds in a new personal account and does not spend or withdraw them for several months. B. A customer opens a business account and soon after has payroll transactions on the account. C. An invalid address or phone number is listed in the customer's account information. D. A customer opens a new personal account and immediately requests two ATM cards.

C. An invalid address or phone number is listed in the customer's account information.

Which of the following is NOT one of the recommended steps for responding to a cybersecurity incident? A. Containment and eradication B. Preparation C. Authorization D. Detection and analysis

C. Authorization

Which of the following statements regarding new account fraud schemes is LEAST ACCURATE? A. New account criminals often use false identification to open new bank accounts and steal money before funds are collected by the financial institution. B. New account fraud sometimes involves withdrawing funds after opening a new business account using checks stolen from another business. C. Automated teller machines (ATMs) are rarely targets of new account fraud because most have cameras installed. D. Mobile deposits are at high risk for new account fraud because face-to-face, in-person transactions are not required.

C. Automated teller machines (ATMs) are rarely targets of new account fraud because most have cameras installed.

ABC Paving and XYZ Asphalt are the only two companies in Greenwood County that lay asphalt. An audit reveals that the government is paying more for asphalt work in Greenwood County than in other counties in the region. A review of the records reveals that of the last ten asphalt contracts awarded in Greenwood County, five have gone to ABC and five have gone to XYZ. Which of the following procurement fraud schemes is MOST LIKELY occurring? A. Need recognition B. Defective pricing C. Bid rotation D. Product substitution

C. Bid rotation

Which of the following is NOT a common red flag of a bid tailoring scheme? A. A contract is not rebid even though fewer than the minimum number of bids are received. B. There are unusually broad specifications for the type of goods or services being procured. C. Competitive awards vary among several suppliers. D. Only a few bidders respond to bid requests.

C. Competitive awards vary among several suppliers.

Which of the following terms describes the use of illegal, clandestine means to acquire information for commercial purposes? A. Technical surveillance B. Traditional espionage C. Corporate espionage D. Competitive intelligence

C. Corporate espionage

Which of the following is an administrative security control that an organization's management can implement? A. Backing up system files regularly B. Issuing smart access cards to employees C. Creating an incident response plan D. Installing a firewall for the network

C. Creating an incident response plan

Which of the following is NOT a recommended method for safeguarding an organization's proprietary information? A. Classifying data into categories according to value and sensitivity levels B. Constructing a quiet room to prevent eavesdropping C. Creating an incident response plan after a data breach occurs D. Changing locks and reprogramming door access codes regularly

C. Creating an incident response plan after a data breach occurs

Susanna was arrested for committing a fraud scheme. During her arrest, she falsely identified herself as her cousin, Laura, so that the crime would be attributed to Laura instead of Susanna. This scheme is an example of which of the following? A. Business identity theft B. True name fraud C. Criminal identity theft D. Account takeover

C. Criminal identity theft

Management at Blue Oak, Inc., has established a task force and charged it with developing a program for safeguarding proprietary information (SPI). Which of the following should be the first step that the task force takes? A. Shred sensitive documents. B. Institute an encryption policy. C. Determine what information should be protected. D. Develop an employee awareness program.

C. Determine what information should be protected.

The purpose of draw requests in construction lending is to provide: A. Documentation that the construction project cannot continue without additional funding B. Documentation that all architectural and engineering designs and quotes have been completed C. Documentation that costs have been incurred and reimbursement is sought D. Documentation that the design is approved by the International Union of Architects

C. Documentation that costs have been incurred and reimbursement is sought

Workers' compensation schemes are generally broken into four categories. Which of the following is NOT one of these categories? A. Claimant fraud B. Agent fraud C. Double duty fraud D. Premium fraud

C. Double duty fraud

Zane obtained a loan from Bank A, agreeing to give the bank a security interest in his commercial property. Before Bank A's lien was filed, Zane managed to get another loan from Bank B using the same commercial property as collateral (unbeknownst to Bank B). In which of the following schemes did Zane engage? A. Sham loan B. Daisy chain C. Double-pledging collateral D. Linked financing

C. Double-pledging collateral

Which of the following is NOT an example of a business email compromise (BEC) scheme? A. Fraudsters use the compromised email account of an executive to request employees' personally identifiable information from the person who maintains such information. B. Fraudsters posing as a company's foreign supplier send an email to the company and request that funds be transferred to an alternate account controlled by the fraudsters. C. Fraudsters use botnets to send massive amounts of emails for the purpose of enticing the recipients to click on a fraudulent URL. D. Fraudsters use the compromised email account of a high-level executive to pose as the executive and ask an employee to transfer funds to the fraudsters' account.

C. Fraudsters use botnets to send massive amounts of emails for the purpose of enticing the recipients to click on a fraudulent URL.

Shredding sensitive documents with a cross-cut shredder, sending and receiving mail at a secure site such as a post office box, and employing a perimeter security system at the office are all measures aimed to do which of the following? A. Protect digital documentation. B. Catch a fraudster in the act. C. Guard manual file systems. D. Prevent misappropriation of office supplies.

C. Guard manual file systems.

Which of the following activities does NOT typically occur during the containment and eradication step of the recommended methodology for responding to cybersecurity incidents? A. Notifying the appropriate internal personnel B. Limiting the damage caused by the attack C. Identifying all incidents of breach that occurred D. Restoring control of the affected systems

C. Identifying all incidents of breach that occurred

Which of the following types of procurement fraud schemes involves procurement employees who convince their employer, the procuring entity, that it needs excessive or unnecessary products or services? A. Bid manipulation schemes B. Bid tailoring schemes C. Need recognition schemes D. Nonconforming goods schemes

C. Need recognition schemes

In a construction loan, the budget line item designated for developer overhead creates an opportunity for the developer to use it to their advantage. The purpose of developer overhead is to provide: A. Labor reimbursements B. Profit margin C. Operating capital D. Budget shortfall

C. Operating capital

Jeremy is involved in an automobile accident but does not have insurance. To be reimbursed for the damages, he gets insurance, waits a short time, and then reports the vehicle as having been in an accident. He has committed an insurance scam known as _____________. A. Ditching B. Churning C. Past posting D. None of the above

C. Past posting

In most construction contracts, a certain amount will be withheld from each draw request by the contractor. This amount is not paid until the contract has been finished and approved by the owner. The withheld amount is referred to as which of the following? A. Good faith deposit B. Withholding C. Retainage D. None of the above

C. Retainage

Jason, a server at a popular restaurant, takes a customer's credit card to process a payment. While he is on the other side of the dining area with his back facing the customer, Jason swipes the card through a small device that he regularly uses to steal his customers' card information. Jason is engaging in a scheme known as card ________. A. Counterfeiting or duplicating B. Scanning C. Skimming or shimming D. Probing

C. Skimming or shimming

Unscrupulous debt consolidation schemes include each of the following EXCEPT: A. The debt consolidation company collects payments but does not appropriately forward them. B. The debt consolidation company guarantees the debtor will receive a loan or credit card regardless of the debtor's credit ratings. C. The debt consolidation company writes a letter to the debtor's creditors and arranges a payment plan. D. The debt consolidation company charges an up-front processing fee and then disappears.

C. The debt consolidation company writes a letter to the debtor's creditors and arranges a payment plan.

When fabricating a counterfeit payment card, which of the following is the MOST DIFFICULT facet to reproduce? A. The magnetic strip B. The card thickness C. The hologram D. The embossed numbers

C. The hologram

Which of the following statements about vendor management best practices is INCORRECT? A. Vendor master files should be kept current to reduce the risk of duplicate payments. B. Vendors should be subject to a background check before they are added to the vendor master file. C. The person who maintains the vendor master file should have the authority to approve invoices for payment. D. The procedures used to monitor vendors should be based on the red flags of vendor schemes that pose the greatest risk.

C. The person who maintains the vendor master file should have the authority to approve invoices for payment.

Which of the following activities is included in the bid evaluation and award phase of procurements involving open and free competition? A. The procuring employees perform their contractual obligations. B. The procuring employees issue the solicitation document. C. The procuring employees assess the bids or proposals. D. The procuring employees develop the bid specifications.

C. The procuring employees assess the bids or proposals.

All of the following are correct statements about identity theft EXCEPT: A. Identity thieves often engage in pretexting by impersonating the victim's bank. B. One way to conceal identity theft is to change the victim's mailing address. C. The type of malware that is most commonly associated with identity theft is ransomware. D. Solicitations for pre-approved credit cards are especially valuable to identity thieves.

C. The type of malware that is most commonly associated with identity theft is ransomware.

A medical provider billed a health care program for an electric wheelchair, while providing the patient with a less expensive manual wheelchair. This inflated billing scheme is known as which of the following? A. Unbundling B. Replacement fraud C. Upcoding D. Undercharging

C. Upcoding

All of the following are methods of identity theft prevention recommended for individuals EXCEPT: A. Instructing the post office to suspend mail during vacations B. Avoiding the use of unsecured, public Wi-Fi networks C. Using the same password or passphrase for all accounts D. Using biometric authentication when available

C. Using the same password or passphrase for all accounts

Which of the following lists the information security goals that an e-commerce system should achieve for its users and asset holders? A. Penetrability, accuracy, exactness, materiality, and systems reliability B. Confidentiality, integrity, availability, authentication, and non-repudiation C. Penetrability, accuracy, availability, authentication, and systems reliability D. Exactness, invulnerability, accuracy, materiality, and data/systems response

Confidentiality, integrity, availability, authentication, and non-repudiation

What is the primary difference between a Ponzi scheme and a pyramid scheme? A. A Ponzi scheme is promoted by encouraging victim members to recruit new members. B. In a pyramid scheme, old investors are paid with money from new investors. C. All pyramid schemes are legal, whereas all Ponzi schemes are illegal. D. A pyramid scheme promotes itself as a pyramid, whereas a Ponzi scheme promotes itself as an investment opportunity.

D. A pyramid scheme promotes itself as a pyramid, whereas a Ponzi scheme promotes itself as an investment opportunity.

Which of the following is the MOST ACCURATE definition of a computer worm? A. A type of software that, while not definitely malicious, has a suspicious or potentially unwanted aspect to it B. A program or command procedure that gives the appearance that it is useful but actually contains hidden malicious code that causes damage C. Any software application in which advertising banners are displayed while a program is running D. A self-replicating computer program that penetrates operating systems to spread malicious code to other systems

D. A self-replicating computer program that penetrates operating systems to spread malicious code to other systems

Which of the following health care frauds would BEST be described as a fictitious provider scheme? A. A provider operates a mobile lab that bills a health care program for unnecessary tests and then relocates. B. A group of people posing as medical professionals provide services without proper licenses. C. A doctor at a hospital inflates the cost of services by coding them as being more complex than they should be. D. A thief steals a health care provider's identification information and bills a government health care program under the name of a fake clinic.

D. A thief steals a health care provider's identification information and bills a government health care program under the name of a fake clinic.

An address similarity report can help detect insurance fraud by showing a payment defalcation or funds that might have been fraudulently sent to which of the following parties? A. A fictitious payee B. A broker C. Another insurance company D. All of the above

D. All of the above

Glenn has just inherited a large amount of money from a deceased relative. Several weeks later, a colleague of Glenn's suggests an investment in a security that is sure to generate returns of 20% every six months. Glenn is intrigued, but he is also worried that it might be a Ponzi scheme. Which of the following actions should Glenn take before investing? A. Find out if the financial manager is licensed and if the security is registered B. Ensure that he can comprehend the details and strategy of the investment C. Determine if the investment's returns have been abnormally consistent D. All of the above

D. All of the above

In which of the following scenarios might a card skimming or shimming scheme be conducted? A. An employee processes a payment outside of the customer's view B. A server walks away from a customer's table to process a card payment C. A customer is pumping gasoline and notices a strange device attached to the self-payment apparatus D. All of the above

D. All of the above

Insurance agent/broker fraud includes which of the following? A. Fictitious payees B. Premium theft C. Fictitious death claims D. All of the above

D. All of the above

Janice, a Certified Fraud Examiner (CFE) for a major insurance company, has received an anonymous tip that an employee in the claims department is processing claims for their own benefit during nonworking hours. To gather information about the validity of this tip, Janice should look at which of the following reports? A. Exception report B. Manual override report C. Address similarity report D. All of the above

D. All of the above

Liam is the manager of a small bank that has recently experienced an increase in the amount of fraud related to electronic funds transfers (EFTs). Which of the following methods can Liam implement to reduce his bank's exposure to EFT fraud? A. Ensure that PINs are mailed to the customer separately from other associated account information B. Send a welcome letter to new customers to determine if the address submitted on the account application is valid C. Separate the duties of bank employees so that responsibilities for the issuance of access devices are separate from the issuance of PINs D. All of the above

D. All of the above

Payment card counterfeiting operations might include the use of which of the following? A. Embossed blank plastic cards B. High-speed printing facilities C. Desktop computers, embossers, tipping foil, and laminators D. All of the above

D. All of the above

Research and development (R&D) personnel often inadvertently divulge confidential information through which of the following? A. Discussions with colleagues at conferences B. Articles written for industry journals C. Hiring outside academic professionals D. All of the above

D. All of the above

When should an employee be made aware of the need to maintain the confidentiality of an organization's proprietary information, as well as which information is considered confidential? A. During an exit interview B. Upon being hired C. When signing a nondisclosure agreement D. All of the above

D. All of the above

Which of the following is TRUE concerning the different types of workers' compensation fraud schemes? A. In an organized fraud scheme, a lawyer, a capper, a doctor, and the claimant often collude to defraud the insurance company B. In an agent fraud scheme, agents sometimes issue certificates of coverage to the insured customer while pilfering the premium C. In premium fraud, an employer might understate the amount of the payroll for higher-risk classifications to get a lower-cost premium D. All of the above

D. All of the above

Which of the following is a common area for construction loan fraud schemes? A. Developer overhead B. Retainage C. Estimates of costs to complete D. All of the above

D. All of the above

Which of the following is a common avenue through which proprietary company information is compromised? A. Publications B. Company website C. Speeches by executives D. All of the above

D. All of the above

Which of the following is a common method used by fraudsters to physically infiltrate and spy on organizations? A. Pose as a contractor B. Fabricate or steal an employee badge C. Secure a position as an employee D. All of the above

D. All of the above

Which of the following is a common red flag of elder fraud schemes? A. Large bank account withdrawals with no explanation B. The discovery of signed or forged legal documents C. New friends who appear suddenly and without prior mention D. All of the above

D. All of the above

Which of the following is a common scheme perpetrated by suppliers of durable medical equipment (DME)? A. Billing for equipment rental after it is returned B. Intentionally providing excessive equipment C. Falsifying prescriptions for medical equipment D. All of the above

D. All of the above

Which of the following is a common way a procuring employee might engage in a bid manipulation scheme? A. Altering bids B. Opening bids prematurely C. Extending bid opening dates without justification D. All of the above

D. All of the above

Which of the following is a poor information security procedure that contributes to loss of proprietary information? A. Failure to implement data retention and destruction policies B. Failure to guard documents maintained in manual file systems C. Failure to practice data minimization D. All of the above

D. All of the above

Which of the following is a reason why prepaid debit and gift card fraud schemes are attractive to fraudsters? A. Prepaid cards can be purchased at countless retailers B. Prepaid cards are relatively anonymous payment methods C. Prepaid cards are difficult to track after they have been purchased and activated D. All of the above

D. All of the above

Which of the following is a recommended step that businesses should take to protect their customers and employees from identity theft? A. Require employees to use complex passwords or passphrases B. Conduct regular employee training on information-handling best practices C. Only retain personal information for as long as it is necessary D. All of the above

D. All of the above

Which of the following is a recommended step that individuals should take to protect themselves from identity theft? A. Create unique answers for security questions B. Limit personal information shared on social media C. Use passwords that are at least eight characters long D. All of the above

D. All of the above

Which of the following is a red flag for new bank account fraud? A. A customer leaves out requested information on the account application B. A customer lists a mail drop as the account's mailing address C. A customer requests a large cash withdrawal immediately after opening the account D. All of the above

D. All of the above

Which of the following is a red flag of a procurement fraud scheme in which vendors are colluding to circumvent the competitive bidding process? A. The winning bidder subcontracts work to losing bidders B. There is a pattern where the last party to bid wins the contract C. Qualified contractors do not submit bids D. All of the above

D. All of the above

Which of the following is a type of physical access control device that can be used to control access to physical objects? A. Locks and keys B. Biometric systems C. Electronic access cards D. All of the above

D. All of the above

Which of the following is a way that dishonest contractors collude to circumvent the competitive bidding process? A. Refrain from submitting bids on certain contracts B. Alternate business among themselves on a rotating basis C. Agree to stay out of each other's designated markets D. All of the above

D. All of the above

Which of the following is an appropriate technique for detecting change order abuse? A. Interviewing complaining contractors and unsuccessful bidders about the presence of red flags B. Examining contract change orders that increase the scope or price of the existing contract C. Reviewing any change orders submitted by the contractor that add new items D. All of the above

D. All of the above

Which of the following is an example of a way in which an electronic funds transfer (EFT) fraud scheme can be committed? A. An employee of a person-to-person (P2P) provider misappropriates a customer's account and password information B. A person who has stolen information about another person's bank account instructs a biller to obtain payment from that account C. A hacker obtains consumer account and password information to direct funds from consumers' accounts D. All of the above

D. All of the above

Which of the following is an example of an effective administrative security control? A. Security policies and awareness training B. Security audits and tests C. Separation of duties D. All of the above

D. All of the above

Which of the following is an example of an indicator of intrusion that an employee might encounter when working on their company's network? A. The user's web searches are automatically redirected to other websites B. The user's contacts are receiving strange email messages from the user's account C. The user's computer is sending an abnormal amount of data to other countries D. All of the above

D. All of the above

Which of the following steps is/are often taken during an account takeover scheme? A. Stealing account log-in information using phishing emails B. Changing customer contact information on the overtaken account C. Placing orders using funds from the overtaken account D. All of the above

D. All of the above

Which of the following is a potential indicator of a loan fraud scheme? A. No change orders have been received for a large project. B. Only two change orders have been requested for a long, complex project. C. There is an increasing trend in the number of change orders for a small project. D. All of the above are potential indicators of a loan fraud scheme.

D. All of the above are potential indicators of a loan fraud scheme.

Which of the following is NOT a potential indicator of insurance fraud? A. A claim for a burglary loss includes large, bulky property. B. An insured previously asked an insurance agent hypothetical questions about details similar to those involved in the claim. C. A claim is made shortly after a change in policy coverage. D. An insured can provide the insurance company with documentation for claims involving expensive property.

D. An insured can provide the insurance company with documentation for claims involving expensive property.

Which of the following is NOT considered to be a red flag of a Ponzi scheme? A. A financial manager who manages, administers, and retains custody of the investment funds B. A financial manager who puts an unusual amount of pressure on investors to act immediately C. An investment that promises extremely high or short-term returns with little risk involved D. An investment that has a history of inconsistent returns coinciding with fluctuations in financial markets

D. An investment that has a history of inconsistent returns coinciding with fluctuations in financial markets

All of the following are red flags of health care provider fraud EXCEPT: A. Unusually high profits compared to similar businesses in the same region B. Medical records that have been altered C. Pressure for rapid processing of bills or claims D. An unusually small number of claims for reimbursement

D. An unusually small number of claims for reimbursement

Which of the following factors enables or enhances fraudsters' abilities to conduct account takeover schemes? A. The increased use of multifactor authentication B. Customers regularly checking their online accounts for changes C. Payment accounts offering the ability to be notified when they are accessed or changed D. Consumers using the same log-in and password information on multiple accounts

D. Consumers using the same log-in and password information on multiple accounts

Which of the following is NOT a problem situation regarding a construction loan that might be concealed using change orders? A. Shortcuts are uncovering other problems. B. The original project is not feasible. C. Collusive bidding is occurring. D. Design changes were requested.

D. Design changes were requested.

Which of the following objectives MOST ACCURATELY describes administrative security controls? A. Keeping unauthorized personnel from entering physical facilities and warning personnel when physical security measures are being violated B. Securing all organizational systems and data to the fullest possible extent, without considering budget implications C. Providing connectivity with acceptable response times, user-friendly access, and a secure mode at an acceptable cost to the organization D. Ensuring that all personnel who have access to computing resources have the required authorizations and appropriate security clearances

D. Ensuring that all personnel who have access to computing resources have the required authorizations and appropriate security clearances

Shimming devices differ from skimming devices in that shimmers are designed to read a smart card's _________. A. Magnetic strip B. Expiration date C. Signature panel D. Microchip

D. Microchip

Which of the following statements regarding new account fraud is LEAST ACCURATE? A. Automated teller machines (ATMs) are often enticing targets for new account fraud because they do not require in-person transactions with bank tellers. B. New account fraud can be defined as any fraud that occurs on an account within the first ninety days that it is open. C. Fraud is more likely to occur in accounts that have been newly opened than in established accounts. D. Mobile deposits are at low risk for new account fraud because they involve sending digital images of payment orders to financial institutions rather than providing physical copies.

D. Mobile deposits are at low risk for new account fraud because they involve sending digital images of payment orders to financial institutions rather than providing physical copies.

Which of the following is an information security goal that an e-commerce system should endeavor to meet for its users and asset holders? A. Access authority B. Exactness C. Systems reliability D. Non-repudiation

D. Non-repudiation

When a construction developer submits a draw request to a lender, all of the following would be red flags for loan fraud EXCEPT: A. Failure to include lien releases from each subcontractor B. Missing inspection reports C. Invoice documentation that appears altered D. Omission of developer's personal account statements

D. Omission of developer's personal account statements

All of the following are best practices for ensuring separation of duties within the information systems department and between IT and business unit personnel EXCEPT: A. End users should not have access to production data outside the scope of their normal job duties. B. Program developers should not be responsible for testing programs. C. IT departments should not overlap with information user departments. D. Only programmers should be server administrators.

D. Only programmers should be server administrators.

Publicly available information that anyone can lawfully obtain by request, purchase, or observation is known as which of the following? A. Wide-source information B. Confidential-source information C. Free-source information D. Open-source information

D. Open-source information

All of the following are methods of identity theft prevention recommended for businesses EXCEPT: A. Restricting the use of laptops to those employees who need them to do their jobs B. Conducting background checks on prospective employees when permitted by law to do so C. Limiting employees' access to customers' personal information D. Performing audits of information-handling practices only when required to do so by regulators

D. Performing audits of information-handling practices only when required to do so by regulators

Which of the following is a measure that management can take to prevent an organization's computers from being infected by malicious software? A. Require that users reuse passwords for important accounts. B. Only allow systems to boot with removable storage devices. C. Prevent employees from opening any emails with attachments. D. Regularly update the organization's operating systems.

D. Regularly update the organization's operating systems.

In a ____________ scheme, unqualified borrowers misrepresent personal creditworthiness, overstate their ability to pay, and misrepresent characteristics of the housing unit to qualify for a loan. A. Reciprocal loan arrangements B. Credit data blocking C. Double-pledging collateral D. Residential loan fraud

D. Residential loan fraud

In a(n) _____________ scheme, the company that initially conned a consumer contacts that consumer and offers to help retrieve the lost money. However, the investigation requires an up-front fee and the consumer is swindled again. A. Retrieval B. Advance-fee C. Double-hustle D. Scavenger

D. Scavenger

Favorite targets for intelligence-gathering purposes include employees in all of the following departments EXCEPT: A. Marketing B. Purchasing C. Research and development D. Shipping and receiving

D. Shipping and receiving

How do smart cards differ from ordinary credit cards? A. Smart cards contain special holograms that identify the cardholder. B. Smart cards are designed to prevent fraudulent online card-not-present (CNP) transactions. C. Smart cards are immune from physical, side-channel, and environmental attacks. D. Smart cards are embedded with a microchip that is not easily replicated.

D. Smart cards are embedded with a microchip that is not easily replicated.

All of the following are types of medical provider fraud EXCEPT: A. Fictitious services B. Fictitious providers C. Clinical lab schemes D. Smurfing

D. Smurfing

Pharming differs from phishing in that in a pharming scheme: A. The attacker has to rely on having users click on a link in an email or other message to direct them to the malicious website that is imitating a legitimate website. B. The attacker delivers the solicitation message via telephones using Voice over Internet Protocol (VoIP) instead of email. C. The attacker delivers the solicitation message via short message service (also known as SMS or text messaging) instead of email. D. The attacker does not have to rely on having users click on a link in an email or other message to direct them to the malicious website that is imitating a legitimate website.

D. The attacker does not have to rely on having users click on a link in an email or other message to direct them to the malicious website that is imitating a legitimate website.

All of the following activities are included in the presolicitation phase of procurements involving open and free competition EXCEPT: A. The procuring entity identifies its needs. B. The procuring entity determines the method for acquiring the goods or services. C. The procuring entity develops the bid specifications. D. The procuring entity issues the solicitation document.

D. The procuring entity issues the solicitation document.

Which of the following is NOT one of the key phases of procurement processes that employ competitive bidding mechanisms? A. The solicitation phase B. The post-award and administration phase C. The presolicitation phase D. The purchase and procurement phase

D. The purchase and procurement phase

Which of the following is NOT an indicator that a computer or network might have been accessed or compromised by an unauthorized user or entity? A. An authorized user is denied access to an area in the network that is part of their role. B. A user in the IT department detects geographical irregularities in network traffic. C. Users are prompted to install unusual software or patches onto their computers. D. Users receive a notification to update their system passwords before they expire.

D. Users receive a notification to update their system passwords before they expire.

Which of the following types of elder fraud schemes often involves property that does not exist or is significantly different than promised? A. Grandparent scheme B. Tech-support scheme C. Home improvement scheme D. Vacation scheme

D. Vacation scheme

Matthew receives a voice mail message telling him that his credit card might have been used fraudulently. He is asked to call a phone number. When he calls the number, he hears a menu and a list of choices that closely resembles those used by his credit card company. The phone number even appears to be similar to that of his card issuer. Of which of the following types of schemes has Matthew become the target? A. Spear phishing B. Pharming C. SMiShing D. Vishing

D. Vishing

A Ponzi scheme can BEST be described as an illegal business structure that might offer merchandise or services but generates almost all of its revenues from the relentless recruitment of new members (T/F?)

False

After paying the ransom demanded by the fraudster, a ransomware victim is always granted access to all locked files on the compromised computer (T/F?)

False

After purchasing an insured's government identification number on the dark web, a fraudster pretends to be the insured and obtains medical care under the insured's health insurance policy. This patient-perpetrated health care fraud scheme can BEST be described as misrepresentations fraud (T/F?)

False

All organizations with a pyramid structure are illegal (T/F?)

False

An incident response plan should be created and implemented during the breach notification step of the recommended methodology for responding to cybersecurity incidents (T/F?)

False

An unauthorized withdrawal is a type of embezzlement scheme in which financial institution employees debit the general ledger to credit their own accounts or to cover up a theft from a customer account (T/F?)

False

Because it is a common occurrence, the fact that documents are missing from a loan file is generally NOT a red flag for loan fraud (T/F?)

False

Both corporate espionage and competitive intelligence are legitimate forms of information gathering that businesses engage in to anticipate competitors' research and development (R&D) strategies (T/F?)

False

Due to the paper trail involved and the emphasis placed on the problem by law enforcement, the majority of check fraud offenders are pursued and prosecuted (T/F?)

False

Employment identity theft occurs when a fraudster impersonates a business to commit financial fraud (T/F?)

False

For corporate espionage purposes, technical surveillance generally consists of gathering documentary evidence or information that can be found via open sources (T/F?)

False

In a third-party health care fraud scheme perpetrated by a patient, the patient makes misrepresentations on an insurance application to circumvent coverage restrictions (T/F?)

False

In the process of data maximization, organizations protect against theft of proprietary information by collecting and storing only the amount of information necessary for employees to perform a given task (T/F?)

False

One method that competitive intelligence professionals commonly use to gather data about a competitor involves posing as a job applicant and interviewing with key employees at the competing company. This practice is BEST described as conducting surveillance (T/F?)

False

Second-hand computers, media drives, and mobile phones are safe from identity thieves if the former owner has manually deleted all personal information from such devices (T/F?)

False

Special care facilities generally have the capability to fulfill all of their patients' needs without the services of outside providers, leading to a lower likelihood of fraud involving such institutions (T/F?)

False

Telemarketing schemes target individuals, not businesses (T/F?)

False

The chances of being arrested and prosecuted for check fraud are high, and the penalties are relatively severe in most jurisdictions (T/F?)

False

The equipment needed to run a check fraud ring is very expensive and difficult to obtain (T/F?)

False

The primary purpose of physical access controls is to prevent unauthorized access to computer software (T/F?)

False

The primary reason for a company's management to construct an electronically and acoustically shielded quiet room is to protect data hosted on the company's computer servers and other sensitive electronic devices (T/F?)

False

To conduct an electronic payment using a person-to-person (P2P) system, the two individuals must meet in person at a financial institution to sign an order requesting the transfer of money from one person's account to the other (T/F?)

False

To ensure separation of duties within the information systems department and between IT and business unit personnel, computer operators should be responsible for performing computer programming (T/F?)

False

To help safeguard an organization's proprietary information, management should require all employees throughout the organization to sign noncompetition agreements (T/F?)

False

Traditional identity theft involves the use of entirely fabricated personal information or a combination of real and fabricated information to create a new identity (T/F?)

False

Victims of consumer fraud are more likely to be organizations or businesses rather than individuals (T/F?)

False

Vishing is a type of phishing scheme that uses text messages or other short message systems to dupe an individual or business into providing sensitive data by falsely claiming to be from an actual business, bank, internet service provider (ISP), or other entity (T/F?)

False

Visitors to a company's facilities should be allowed unrestricted access as long as they have signed in as a visitor in the company's logbook and have been issued a visitor's badge (T/F?)

False

A Ponzi scheme can be characterized as an ostensibly legitimate, yet ultimately fraudulent, investment opportunity wherein the promoter pays previous investors with money gained from new victims (T/F?)

True

A double-pledging collateral scheme is a type of loan fraud in which a borrower uses the same property as collateral with different lenders before liens are recorded and without telling the lenders (T/F?)

True

A favored device of phony charities is to send school-age children to different homes in a neighborhood to say that they are raising money for antidrug programs or for a group that takes underprivileged kids on trips (T/F?)

True

A financial fund operator who insists that investors continually reinvest their profits, rather than take payouts, is a red flag of a Ponzi scheme (T/F?)

True

A higher-than-normal level of employee turnover associated with a real estate developer is often a red flag of loan fraud (T/F?)

True

A property flipping scheme occurs when someone purchases a piece of real estate and sells it shortly thereafter at an unjustly inflated value (T/F?)

True

A pyramid scheme is designed to pay off its earliest investors (T/F?)

True

A pyramid scheme is promoted by encouraging victim investors to recruit new members. The more members recruited, the higher the investor rises in the ranks of the enterprise, and the more money the investor is supposed to make (T/F?)

True

Advance-fee schemes, debt consolidation schemes, and diploma mills are all examples of consumer fraud schemes (T/F?)

True

An address similarity report is an electronic insurance fraud detection tool that compares multiple payments going to the same address (T/F?)

True

An inaccurate vendor master file can result in greater risks of duplicate payments, unfavorable payment terms, and noncompliance with regulations (T/F?)

True

An insurance company might be guilty of fraud if it negotiates discounts with its medical providers and fails to apply those discounts to its consumers (T/F?)

True

Automatic debit program schemes occur when fraudsters obtain a consumer's bank account information and then use this information to draft money from the consumer's bank account without that person's consent (T/F?)

True

Billing for experiments with new medical devices that have not yet been approved by a jurisdiction's health care authority is one form of medical fraud (T/F?)

True

Calendars and schedules displayed at an employee's workstation can inadvertently provide a company's competitors with valuable proprietary information (T/F?)

True

Competitive intelligence is a legitimate business function that involves assembling competitor data into relevant, accurate, and usable knowledge about competitors' positions, performance, capabilities, and intentions (T/F?)

True

Credit card receipts, bank statements, and birthday cards can all provide dumpster divers with useful information for committing an identity theft scheme (T/F?)

True

DRG creep occurs when staff members at hospitals or other medical institutions intentionally manipulate diagnostic and procedural codes in a pattern to increase claim reimbursement amounts (T/F?)

True

Employees are often willing to abide by nondisclosure agreements, but they sometimes do not understand that the information they are communicating might be confidential (T/F?)

True

Fraudsters often use stolen credit or debit cards to purchase prepaid gift or debit cards to quickly convert illicit card funds into a legitimate cash equivalent (T/F?)

True

Frequent check deposits in round numbers or for the same amount and checks written to individuals for large, even amounts might be indicators of check fraud (T/F?)

True

If a customer reports the loss or theft of an access device, the financial institution should attempt to prevent fraud related to electronic funds transfers (EFTs) by canceling the existing card, personal identification number (PIN), or other form of access and issuing a new one (T/F?)

True

If an insurance company fails to follow procedures to detect fraudulent claims when acting as an intermediary for a government health care program, it can be found guilty of fraud in some jurisdictions (T/F?)

True

In credit repair scams, the fraudster promises to "erase" or "doctor" an applicant's credit history, but in reality there is no way to erase bad credit (T/F?)

True

Latoya, a loan officer, and other real estate insiders colluded to steal a homeowner's identity, take out a second mortgage on the individual's property, and split the proceeds. Latoya and her co-conspirators' actions would BEST be described as a fraudulent second lien scheme (T/F?)

True

Logical access controls, encryption, and application security are all technical security controls used to safeguard computer systems and communication networks (T/F?)

True

Mobile payments that require biometric authentication, such as a partial fingerprint or three-dimensional facial scan, are usually less vulnerable to cyberattacks (T/F?)

True

Not every company that runs its business using a pyramid structure is operating an illegal pyramid scheme (T/F?)

True

Pharming is a type of attack in which users are fooled into entering sensitive data into a malicious website that imitates a legitimate website (T/F?)

True

Real estate scams are easily recognized, as the perpetrator's pitch almost always includes an element of time pressure or an emphasis that the victim is missing out on a rare opportunity (T/F?)

True

Shareholders' reports, company newsletters, and staff biographies on the company website might give a competitor valuable information about a company's product secrets (T/F?)

True

Smart cards include a wide variety of hardware and software features capable of detecting and reacting to tampering attempts and countering possible attacks (T/F?)

True

To help prevent identity theft, businesses should strive to limit the personal information they collect from customers (T/F?)

True

To prevent contract and procurement fraud, companies should implement a continuous monitoring program to monitor their procurement activities (T/F?)

True

When a medical provider performs a service for a patient but bills the patient's health care program for a more complex and more expensive service, this practice is called upcoding (T/F?)

True

When developing a program for safeguarding proprietary information (SPI), an organization should form a company task force to develop the program, and the task force should include representatives from relevant departments across the company, such as research and development (R&D), corporate security, and records management (T/F?)

True