Fraud Detection in Legal Metrology

Cheating at the weighbridge can be a big business. In a recent case, cheaters defrauded a major international agribusiness company of $2 million. The scheme involved a scale operator working with suppliers to create bogus tickets for grain shipments that were never made.

In other scenario scales are tampered with so as to defraud tea growers with non-tea farmers getting bonuses that were not intended for them. Tea collection clerks have been prosecuted and sentenced in the tea growing zones of Kisii, kericho and Kirinyaga. Inspections carried out in Dar es Salaam, Tanzania on butcheries revealed that five out of thirty two scales had been tampered with.

Measurements have been used from time immemorial as an everyday way of life in determining distances between a person and his/her neighbor’s homestead, while trading goods, in estimating how much food a family will live on before the next harvest and in calculating the speed of light.

In trade measurements are used in determination of quantity of goods in transactions that transfer value for money. These measurements will be in the form of a weight or measure of capacity. The transactions include sale of meat, petrol for your car and the heap of potatoes at a wholesale market. Today utility meters are also used as measurement equipment for sale of electricity and water.

Measurement equipment when not used properly lead to dispensing goods of short measure to the buyer. The unscrupulous practices seem to have existed even in the early days that the bible prohibits use of unjust measures in the Law of Moses. The use of unjust weights and measures leads to a lot of conflict in trade at all levels of business. The Lord detests dishonest scales, but accurate weights find favor with Him.

Regulations are in place to assure users of the credibility of measurement results, but that notwithstanding losses continue to be recorded. Kenya established laws that control the use of measurements in trade and how they are required to be accurate to within tolerance limits to assure credible measurements results. Activities involved include pattern approval, initial verification and subsquent survillence.

Weights and measures department internationally, is known as legal metrology which is a field of measurement subject to requirements of a legislation. The other fields of metrology are industrial and scientific metrology.

Use of inaccurate measurement equipment has continued to bedevil the Kenyan market without an avenue to have it addressed. Weighing scales that are not approved are used to determine quantity delivered to the buyer and the buyer has no way for redress.

In production sector weighbridges are the most commonly used measurement equipment for quantity determination of goods and other raw materials supplied by commercial trucks to factories and warehouses. The weighbridges are verified by statutory bodies like weights and measures who test for their accuracy by placing standard masses onto the platform and comparing with figures generated at the indicating headwork. After confirming that the scale in accurate, an inspector then stamps it and issues a certificate of verification as proof of its accuracy.

Unfortunately during use dubious records are generated which create a perception that the scales are not accurate. This calls for other interventions to compel perpetrators of this atrocities that allow this unfair gain to leave their wayward behavior.

Consumers have the right to goods and services of reasonable quality. They also have to the protection of their health, safety, and economic interests.

Governments are obligated to assure citizens credible measurement results by defining units of measurements, providing mechanism of traceability and associated uncertainty of the results.

Weight and measures is one such department responsible for legal metrology and performs functions as internationally recommended by OIML such as pattern approval, initial verification, subsequent verification which is mandatory and after repair verification.

Verification of trade measurement equipment is done annually in a process requiring persons with these equipment to submit them to an inspector of weights and measures for testing and comparing them against working standards, and if found to be accurate to within prescribed tolerances, the equipments are stamped and a certificate of verification issued as proof of their accuracy(weights and measures Act cap 513, section 27,2012)

When measrement equipment are accurate, then the rights of consumers to goods that give value to their money is upheld. Unfortunately other factors come in play to deny them this right. Such factors are fraud, overcharging and scarcity of the goods.

Fraud is defined as wrongful or criminal deception intended to result in financial or personal gain. It takes place when a person wants to gain unfairly by deceiving another person or making a statement he knows to be false so as to defraud that other person. Examples of fraud include attaching of a magnet on the goods side of an equal armed beam of a counter scale by a butcher so as to deliver less meat to a buyer by an amount equal to the weight of the magnet.

Fraud in the trade has been a common phenomenon where the seller as well as the buyer is naturally inclined trade to have the best bargain in order to undercut each other. Measurements take a center-stage as the media for transactions. Weight of meats bought by non-measurement scales were less than those sold by measurement scales in Abakiliki and Calabar meat markets in Nigeria. Cheat is conceived as a product of individual, structural variables and process that interact at different levels to produce negative consequences.

Tele Track Africa Director Mr. Joshua Mwangangi during an interview at Nation Centre Nairobi revealed that he invented a security gadget, a Remote Weights System that displays a vehicle’s weight, location and speed to an end-user’s phone or computer. Trucks fitted with this gadget need not worry about the malpractices at the weighbridges and cannot be manipulated except that it’s the operators equipment is the one at play.

Weights and measures legislation require that weighing in the presence of a person involves conducting the operation of weighing by permitting a clear and unobstructed view of the weighing instrument and of any indication given by such instrument in respect of the weighing operation. The weighbridges are installed with an operator’s office designed to allow the operator have a clear view of the platform. Two types of weighbridges are available for use and include one constructed in a pit and the other above the ground. The in-pit type, has to have a guardrail to confine a truck onto the platform, the absence of which a truck can have some of the wheels off the platform without the operator noticing.

After calibration and verification of the weighbridge, an inspector of weights and measures seal the indicator with a seal wire and stamps onto a lead pellet with a stamp of verification pliers as proof that the instrument is accurate to within the prescribed limits of error. The seal prevents tampering of the instrument. It is a criminal offence to break such a seal.

Fraud detection is a topic applicable to many industries including banking and financial sectors, insurance, government agencies and law enforcement, and more. Fraud attempts have seen a drastic increase in recent years, making fraud detection more important than ever. Despite efforts on the part of the affected institutions, hundreds of millions of dollars are lost to fraud every year. Since relatively few cases show fraud in a large population, finding these can be tricky.

Fraud detection protects customer and enterprise information, assets, accounts and transactions through the real-time, near-real-time or batch analysis of activities by users and other defined entities (such as kiosks). It uses background server-based processes that examine users’ and other defined entities’ access and behavior patterns, and typically compares this information to a profile of what’s expected. Fraud detection is not intrusive to a user unless the user’s activity is suspect.

Data mining and statistics can be used to detect fraud by searching to spot patterns that show possibilities of fraud. Factors that identify with fraud are fed into the system and will then be pinpointed when predicting and detecting fraud when it occurs. Using sophisticated data mining tools such as machine learning algorithms, predictive models can be generated to estimate the probability of fraudulent behavior.

Predictive modeling is the general concept of building a model that is capable of making predictions. Typically, such a model includes a machine learning algorithm that learns certain properties from a training dataset in order to make those predictions.

Predictive modeling can be divided further into two sub areas: Regression and pattern classification. Regression models are based on the analysis of relationships between variables and trends in order to make predictions about continuous variables, e.g., the prediction of the maximum temperature for the upcoming days in weather forecasting.

Conceptual framework is an analytical tool with several variations and contexts. It offers a high level processing of data using machine learning algorithms for model building and evaluation, prediction and how the predictions can be used.

Machine learning models require significant amount of data in order to produce accurate results. With little data wrong inferences will lead to irrelevant and erroneous fraud assessments.

The algorithm has a probability of having false alarm. This generates lack of trust in the outcome, so a level of confidence must be established for true fraud to occur.