Update: Verisk Analyst, Timothy Young, Released on $100K Unsecured bail
DOJ Charges Verisk Analyst Selling Access to Verisk Internal Databases for
$2.5M Cryptocurrencies
Timothy Young, 49, Morefield, NE, was released on a $100k unsecured bond this week pending federal court date assignment. U.S. Attorney Matthew Riley on New Jersey District.

Young posted his access to Verisk's databases for sale for $2.5M in cryptocurrency. With the FBI using a confidential informant to contact him and offer to buy the access for $100k and a $50k monthly usage fee.

With millions of buildings, nationwide emergency centers, nationwide fire departments, insurance documents, and PI information from all Verisk clients this could have been a monumental breach of national magnitude that could in theory have led to a number of outcomes of catastrophic proportion nationwide.

Interestingly a second username and logon was offered for use by Young which was mentioned in the original complaint.

Today NBC will be releasing the story at 6 pm.

Stay tuned as we follow the case through the courts and in unison with NBC.


RC Willey keeps an eye on shrink with Axis Communications
Home furnishings retailer secures inventory with advanced network camera technology. Operating 15 stores across Utah, Nevada, Idaho, and California, as well as an e-commerce business, Salt Lake City-based RC Willey manages $500 million of inventory in warehouses and stores throughout the western US. Facing challenges in tracking inventory discrepancies and investigating shrink, RC Willey decided to install surveillance cameras in its supply chain.

The company installed analog cameras to document the inventory flow, but when that system reached the end of its life, RC Willey began searching for a high-resolution internet protocol (IP) digital video surveillance system that could deliver better video with greater forensic value.

After lengthy on-site testing of 15 different IP video camera vendors, RC Willey selected network cameras from Axis Communications to track inventory in transit from its distribution centers, retail stores, and delivery trucks. RC Willey also selected systems integrator and Axis partner Alphacorp to undertake the installations. chainstoreage.com

S-TRON Announces Strategic Partnership with ZKTeco USA
Need Biometric & RFID-based Access Control? S-TRON Has You Covered.

S-TRON, A Veteran Owned National Electronic Security Solution Provider, is proud to announce a strategic partnership with ZKTeco USA, a leading global provider of advanced Biometric & RFID-based Access Control systems comprised of a variety of Panels, Readers, Walkthrough Metal Detectors, Turnstiles, X-Ray Baggage Scanners and Visitor Authentication & Management software.

With the ever-increasing need for people and asset protection within our current and prospective customer base, S-TRON has chosen ZKTeco USA above all other vendors based on their advanced security technology, reliable support and the seamless integration within their comprehensive product line. s-tron.com

JCP Shrink Improving - Down 16% Q1
JCP CEO Jill Soltau: 'There's no silver bullet,' & turnaround will take time
Puts Shrink Reduction in Top 6 Priorities
It's been her experience in turnarounds, she said, that "things can get worse before they get better."

We're focused on sustainable profitable growth and sustainable takes time," said Soltau, who joined Penney in October. She's been putting her management team together and working to improve Penney's processes, slashing inventories, working on integrating the online and store businesses, cutting down on shrink and revamping merchandise assortments and strategies.

Penney reduced its inventory by 13% last year and by 16% at the end of the first quarter. New processes have also cut down "shrink," or the loss or theft of merchandise, the company said. dallasnews.com

LP's Use of Facial Recog. - A "Practical Application"
Acceptance Trend in Retail Industry Media Continues
"Do the benefits of using facial recognition in retail outweigh the risks?
Facial recognition technology has many practical applications, including law enforcement, airport security and retail loss prevention to name a few. And while these use cases seem reasonable to most people, not everyone is enamored with facial recognition technology or how it’s being used,

The recent legislative actions along with the heightened sensitivity to privacy resulting from the introduction of the General Data Protection Regulation in Europe may prove to be problematic for retailers, including Walmart and Walgreens, that are actively experimenting with facial recognition technologies.

Walmart has been testing facial recognition to improve customer service by trying to recognize if a shopper is “unhappy”. If that determination is made, then customer service can intervene and turn a bad customer experience into a good one — so the theory goes.

Walgreens is testing sensors that detect shoppers and cameras that scan their faces to estimate their gender and approximate age for delivering targeted messages on their experimental soft drink coolers outfitted with digital displays.

While many retailers experimenting with facial recognition insist they are not storing facial images or using them for any purpose except to help deliver a better shopping experience, many questions remain. How are facial images stored? Who has access to them? Are shoppers notified in advance? Can shoppers opt out? retailwire.com

Editor's Note: We would have never seen this just two years ago. But with the increased violence, mass shooters, and robberies continuing and the customer surveys all showing their prioritizing safety and security, coupled with the customer experience being such a critical element in the path to purchase, retailers and even the media are on the verge of doing an about face on LP's use of facial recognition's in retail. Just my thoughts

Retail Tops All Industries in Compliance
KPMG: 2019 Chief Compliance Officer Survey
Across all industries, an intensely heightened awareness of ethical behavior has elevated the need for executive leadership in the areas of ethics and compliance, and it is prompting change. 

KPMG’s 2019 CCO Survey: Insights for the future of ethics and compliance explores how most organizations, independent of industry, are taking ethics and compliance risks seriously. Based on a survey of 220 chief ethics and compliance officers (CCOs) representing the largest organizations across multiple industries, the report identifies mature ethics and compliance areas and offers guidance for improvement where programs still need to advance. 

The survey found a consensus across all industries on top compliance activities to enhance, refine, and integrate.

Recent high profile ethics failures illustrate the real impact of reputation risk and firms are seeking to avoid these costs by strengthening their abilities to mitigate the risk of misconduct. Organizations’ focus on investigations, ethics, and training supports this goal: Investigations to identify trends and root causes; ethics to clarify what is the “right thing to do” and to reinforce accountability for failure to do so; and training to reinforce the firm’s values and controls through meaningful example.

Chief Compliance Officers reported evolving program maturation due to heightened public, investor, and board awareness of ethics-related issues, as well as converging business models.

Retail tops all industries in "strongly agreeing" across all survey questions indicate increasing program maturation. advisory.kpmg.us

Read full report here

CEO of Merchant Payment Processor "CPS" Guilty Overbilling Fraud
Southern District of New York: MICHAEL MENDLOWITZ, 44, of Woodmere, NY, the former CEO and part owner of a payment-processing company that operated under various names, including Commerce Payment Systems (“CPS”), for defrauding its merchant customers.

“Michael Mendlowitz preyed on small business owners, defrauding thousands of them. Mendlowitz’s victims got sold a bill of goods and were duped into overpaying.”

Thousands of small businesses located throughout the country, were charged all manner of hidden and increased rates and fees. In furtherance of the fraud, MENDLOWITZ directed senior employees of CPS to significantly increase rates on customer accounts with no disclosure to customers that they would in fact be charged those increased rates. In addition, MENDLOWITZ deleted three pages from the customers’ contracts that contained terms and conditions that directly contradicted representations made to customers during the sales process. As part of the fraud scheme, MENDLOWITZ falsely told representatives of CPS’s parent company that those terms and conditions had been provided to customers. Facing a maximum term of 20 years in prison.

Richard Hart, 39, of East Meadow, New York, a CPS sales manager, previously pled guilty before Judge Broderick to one count of conspiracy to commit an offense against the United States. justice.gov

Fighting counterfeit products through microscopic imagery
An effective product authentication system, then, has great potential to help retailers. It can significantly reduce the possibility of buying and selling fraudulent products, everything from batteries to high-end luxury goods, and can lead to increased sales as consumers become more confident about the authenticity of products. Employees spend less time authenticating goods, which reduces operating costs; above all else, the brand’s integrity is protected.

Ryan Smith, senior director of online operations for Goodwill of Orange County, Calif., has been using such a system for several months and says it has “really increased the efficiencies and the accuracy of our authentications.” stores.org

The Rise of Return Fraud and How Retailers Are Fighting Back
Sophisticated counterfeits and a culture of hassle-free returns have created an expensive problem for retailers.

UK luxury department store Selfridges adds step to stop counterfeit returns. Starting last year, they began taking photos of minute details of certain products, such as a button on a coat or a bag’s embossed leather. When a customer returns an item, a warehouse employee or store assistant can take a similar image, then use software to compare it against the original for tiny discrepancies that might point to a forgery.

The system was designed by Entrupy, a software firm started in 2012, which began testing its approach with Selfridges last year. The idea is that every item has unique physical characteristics, often invisible to the naked eye, that can be used to determine whether it is real or counterfeit. “Think of it just like a fingerprint system.”

So far in 2019, out of the 18,000 items Selfridges ran through Entrupy’s software, 30 were flagged as potential fakes. Those items, which included a bag retailing for over $2,100, were then sent for additional testing (some turned out to be genuine). businessoffashion.com



The D&D Daily Launches New Transparency Program

Given the current emphasis on organizations providing greater transparency - especially news outlets, in this era of fake news and false claims - the D&D Daily will begin providing independently audited and verified readership operating statistics, which may include a review by an independent senior retail Loss Prevention executive, and distributed to all D&D Daily business partners on a semi-annual and annual basis. In keeping with standard industry practices, this generic statistical information will not include any personally identifiable or email information of any subscriber. The audit review and results will be published on D-Ddaily.net and available to all business partners.

We at the Daily are committed to driving industry best practices and ensuring the quality of information we deliver for both our readers and our business partners. As our business partners provide us the opportunity to deliver the Daily each day to the industry.

We invite our readers to please take the time to thank our sponsors while we work hard to deliver the news and trends to you, our readers in the retail industry.

   Thanks, Gus Downing

  
 

D&D Daily Special Announcement: We’d like to congratulate Mike Crissman, our Managing Editor, on his recent successful completion of the LP Foundation’s LP Qualified program. The Daily continues to drive towards ensuring the absolute credibility of the news and trends we report and how they impact our industry. Congratulations Mike!

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