“Subcommittee Chairwoman Greene: “Mr. Talcove, do private sector companies have a lower rate of improper payments than the federal government?”
Mr. Talcove: “Yes. The fraud rate, that the criminals are taking advantage of the public sector is around 20%. In the private sector, it’s around 3%. And it’s really because the tools that are used in the private sector, aren’t used in the public sector. Front end identity verification, self-certification, and then finally, making sure that individuals are who they say they are. If we start using these tools, you will see the fraud rate go down dramatically because for the most part, this fraud isn’t taking place by individuals. It’s individuals whose identities have been stolen on the dark web.”
Subcommittee Chairwoman Greene: “We would say the private companies that pretty much have to exist on a 20% profit rate. They can’t continue to be successful if they were to allow their customers data to be something like that and used by criminals. However, the federal government, who can continue printing checks and continue an operation, never fixes its problems because it can’t be forced to go out of business. Would you agree with that, Yes or no?”
Mr. Talcove: “Yes.”