Case Studies

The Situation:

In early 2008, the Attorney General for the State of Florida impaneled the Eighteenth Statewide Grand Jury to tackle the issue of workers compensation insurance premium fraud, which was costing the state, an estimated, $1 billion annually. One of the most common and organized types of fraud, often found in the construction industry, involved using check cashing businesses to cash large corporate checks in order to make payments to workers of uninsured subcontractors. Fake shell companies were frequently used to rent workers compensation certificates to uninsured contractors enabling them to bid projects significantly cheaper than their law-abiding competitors. Oftentimes, shell companies would be long discarded before regulators ever caught up with them, enabling criminals to continue to operate freely. The Grand Jury made many excellent recommendations on how to reduce workers compensation insurance premium fraud, but they were unable to solve the problems associated with the organized shell company schemes. In 2011, Florida CFO, Jeff Atwater, convened another work group to study the issue and provide additional recommendations. This second work group concluded that a statewide database was needed to monitor check-cashing transactions exceeding $1,000. The goal would be to create an increased flow of information between check-cashers, the Office of Financial Regulation, the Division of Workers’ Compensation and the Division of Insurance Fraud regarding commercial/third-party checks, allowing for the efficient and timely detection of fraud schemes.

Veritec Solution:

Veritec responded to the need for a statewide database by developing and implementing a proprietary check cashing database system. The CCDB facilitates the needs of Licensees and their customers, while maintaining compliance with all state laws and with minimal interruption to their business. Additionally, the CCDB allows regulators to efficiently and effectively oversee regulatory compliance and maintain administrative and managerial control over their statewide programs. Like all other Veritec regulatory systems, the CCDB provides 24/7/365 availability and reporting for all of its transactions. The CCDB can also be configured to adhere to, and enforce, the exact specifications of individual state laws. Veritec’s CCDB System is successfully regulating transactions for Florida, and could be part of the answer in helping your state curb its workers compensation insurance premium fraud. The CCDB technology can also be applied to identify tax evasion and other structured transactions designed to evade regulators and law enforcement.

The Situation:

In 2007, the State of Illinois found itself dealing with more and more predatory mortgage targeting. Something had to be done. Members of the Illinois legislature banded together to implement Illinois House Bill 1167. This first-of-its kind mortgage bill targeted certain lending activities and made it mandatory for every loan offered to consumers in certain zip codes to be entered into a database. At the time, the legislation was intended to establish a pilot program to determine if the mortgage lending industry could utilize a platform similar to technology that was already in place to regulate short-term “payday” lending.

Following the success of the pilot program, House Bill 4050 made the program permanent. Encompassing four counties which make up more than 65 percent of the Illinois mortgage market, this new bill made it mandatory for licensed mortgage brokers or originators to submit information for every mortgage they generate to the Anti-Predatory Mortgage Database (www.ILAPLD.com) prior to closing on the property.

Veritec Solution:

Since 2007, Veritec has provided the State of Illinois with the Anti-Predatory Mortgage Database. Veritec’s database and program solution analyzes every loan upon submission. Certain loan characteristics are flagged by the system, and the regulatory framework then determines if the consumer is required to undergo HUD-certified credit counseling in order to complete and close the loan. The technology has brought complete transparency to the mortgage marketplace in this jurisdiction. In fact, in a 2009 study of the pilot program, the Chicago Federal Reserve concluded that overall, there was a correlation between the Illinois program and lowered foreclosure rates.

Through this program, Illinois borrowers have saved hundreds of millions of dollars in mortgage principal and interest thanks to the implementation of this database.

The Situation:

In 2001, the Florida Legislature was faced with mounting calls to regulate short-term, high cost consumer lending, commonly referred to as ‘payday lending.’ At the time, Florida consumers were caught in a dangerous situation. While consumer lending on a national scale had general regulatory oversight from the Federal Trade Commission, gaps in the regulation of these entities at the state level made it possible for consumers to take out multiple short-term loans from various lenders at the same time. Many consumers found themselves with thousands of dollars in loans from several different lenders, all with the same due date. Loan extensions were available, but came with staggering fees.
Additionally, states like Florida did not have specific statutes dealing with short term lending.

The Florida Legislature passed Senate Bill 561 in 2001 to establish a unique statutory code to regulate short-term, high cost consumer lending by limiting consumers to a single outstanding loan statewide. The law also prevents a lender from extending any loan for an additional fee.

Florida needed a complex, real-time database management solution.

Veritec Solution:

Veritec stepped in to provide the State of Florida with the Deferred Presentment Database and Program Solution (www.FLADPP.com). This real-time database connects to more than 1,500 stores and lenders in the State of Florida, with integration across dozens of industry point-of-sale systems.

The comprehensive network of information gives lenders an immediate and up-to-the-second snapshot of a consumer’s eligibility to obtain a deferred presentment loan in the State of Florida. With more than seven million loans authorized per year, totaling more than three billion dollars in credit, every single Florida loan authorized is in compliance with State law. Veritec now operates these programs in more than a dozen states, with more and more jurisdictions following suit in the United States and abroad.

The Situation:

In 2016, the Florida Medical Marijuana Legalization initiative, known as Amendment 2, was legalized by voters. The Florida Legislature passed the pertinent Senate Bill 8A (SB 8A) in 2017 to establish regulations for the implementation of Amendment 2. The Florida Department of Health was mandated to begin issuing licenses to new Medical Marijuana Treatment Centers (MMTC), as well as identification cards to qualified patients and legal representatives.

With over 200,000 anticipated patients, Florida would be the third largest Medical Marijuana state in the country. Implementing a compliant program would require innovative software and a robust customer service program.

Veritec Solution:

Since 2017 our software and operations have kept Florida patients in compliance with state regulations while providing simple and user-friendly solutions to access their patient cards, process their payments and track the status of their patient card.

The Veritec support services have yielded a high-quality customer service program, seamlessly processing patient applications, payments and refunds as needed. This enterprise solution has resulted in streamlined processing of thousands of applications per week, all while reducing call volume into the center.

Today, our solution continues to evolve and adapt to ever-changing regulations, including the inclusion of smokables most recently signed into law by Governor DeSantis.