The OEM aftermarket industry faces huge losses because of warranty fraud. Every year, OEMs have to spend 3%-10% of their total warranty cost on fraudulent claims, which may look small in percentage but amounts to $25 billion in figures.
Moreover, fraudsters are improving their methods to defraud OEMs. They are finding tactics to commit fraud, which makes it difficult for OEMs to identify them. Some warranty frauds that OEMs have already reported include fraudsters using false invoices, tampered spare parts, and even persuading technicians to double-charge OEMs.
In the past few years, OEMs have seen the number of phantom claims increase exponentially. These claims include dealers charging for labour and parts that were never utilised in the equipment.
With the increase of warranty fraud in the aftermarket, it only makes sense for OEMs to take strict measures against it. While traditional approaches may have been efficient to some levels, automating the entire claims processing operation with AI remains the most effective and feasible option in 2026 and beyond.
AI-led automation is already helping organisations all around the globe and across multiple sectors to prevent fraud. According to statistics, 90% of financial institutions are now AI-protected to detect new fraud tactics in real-time. The OEM industry still needs to catch up on AI-led automation.
Another reason why AI automation is imperative for OEMs is that...
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