1. Insurance Fraud

2. Objectives Definition of Fraud Types of Fraud
How does fraud affect you?
What you can do to protect yourself

3. What is “Fraud”? Fraud is deceit; it’s trickery; it’s cheating;
it’s committed to cause a person or organization like an insurance company to give up property or some lawful right.
MN IASIU

4. Basically, fraud is INTENTIONAL DECEPTION for the purpose of financial gain.

5. How Big Is the Problem of Fraud?
Coalition Against Insurance Fraud
Insurance Fraud Costs Americans an Estimated;
$80 Billion Dollars a Year
Cost to you; an estimated $1000 a year per family
POINTS TO MAKE:
(1) HOW SERIOUS A PROBLEM (FRAUD) HAS BECOME.
(2) AS MANY AS THREE OUT EVERY TEN CLAIMS
THAT ARE PRESENTED, COULD BE FRAUD.
(2) TO UNDERSTAND HOW MUCH MONEY IS INVOLVED

6. What could your family do with $1000 a year?
Insurance Fraud
What could your family do with $1000 a year?
The Reality of Insurance Fraud
Reasons people commit insurance fraud
56% feel they can get away with it
32% feel they are paying too much for insurance
24% are making up for their deductible
(Accenture Survey – 2004)

7. According to NICB:
An estimated 3 out of every 10 insurance claims may involve fraud.
Fraudulent claims account for 10 to 30 cents out of every claim dollar.

9. The Reality of Insurance Fraud
Reasons people commit insurance fraud:
56% feel they can get away with it
32% feel they are paying too much for insurance
24% are making up for their deductible
(Accenture Survey – 2004)
The Reality of Insurance Fraud
Reasons people commit insurance fraud
56% feel they can get away with it
32% feel they are paying too much for insurance
24% are making up for their deductible
(Accenture Survey – 2004)

10. The Cost The extent of Insurance Fraud is difficult to quantify:
Much of it goes undetected
Health is endangered
Innocent people are killed or maimed
Employees lose jobs
The Cost
The Coalition Against Insurance Fraud
The amount is a hidden tax of more than $900 per family each year on the costs of goods and services
National Insurance Crime Bureau
$30 billion/year
10 percent of claims
The extent of insurance fraud is difficult to quantify because much of it goes undetected.

11. Insurance Fraud
How else are you affected? Increase in cost of goods & services Increase in insurance premiums Increase in cost of medical care
The Reality of Insurance Fraud
Reasons people commit insurance fraud
56% feel they can get away with it
32% feel they are paying too much for insurance
24% are making up for their deductible
(Accenture Survey – 2004)

12. Characteristics of people who are involved in insurance fraud:

13. Types of Fraud No-Fault Insurance Fraud
Billing for services not provided
Performing unnecessary and potentially harmful tests and procedures
Worker’s Compensation Fraud
Knowingly lie about work related injury or illness to receive benefits
Altered Documents
Knowingly lie about work related injury or illness to receive benefits

14. Types of Fraud Slip and Falls Premium Fraud Vehicle Thefts
Property Claims
Staged Accidents/Passenger Stuffing
Caused Accidents
Identity Theft Fraud
Paper Cars and Vin Transfers
Multiple Claims

15. Fraud Comes in Many Forms
Life Insurance Fraud
Faked death
Murder for Insurance
Health Care Provider Fraud

16. ARSON

17. Owner Give Ups

18. Organized Fraud Activity
Auto Accident Fraud/Organized Ring Activity:
Padding claims
Caused or Staged Accidents
Jump-ins/Passenger Stuffing
Fake helpers/Accomplice witnesses

19. Organized Fraud Activity
Cappers/Runners
Professionals
Medical Providers
Lawyers
Interpreters
Staged Accidents
All parties knowingly involved
Passenger Stuffing
Caused Accidents
Targets-Innocent Parties
Female drivers
Expensive cars
Buses, delivery trucks
18 wheelers
CAPPERS OR RUNNERS - THE PEOPLE THAT MAKE THE FIRST CONTACT WITH THE POTENTIAL PARTICIPANTS.
PROFESSIONALS - THE DOCTORS, LAWYERS, CLINICS, BODY SHOPS WHO ARE INVOLVED IN THE ORGANIZED ACTIVITY.
SQUAT & SQUASH - THE CALIF. 18 WHEELER ACCIDENT, WHERE A PERSON WAS KILLED IN THE SQUAT CAR.
ATTY. INVOLVED WAS TRIED AND CONVICTED OF MURDER.
TARGETS - THEY GO WHERE THEY KNOW THERE IS MONEY.

20. Staged Accident Scenarios
The Investigators: Counterfeit crashes
By Andy Wise - bio |
MEMPHIS, TN (WMC TV) - One person's fender-bender might be a scam artist's fraud.
Copyright 2010 WMC-TV. All rights reserved.

21. The Drive Down

22. The Freeway Swoop & Squat

23. The Panic Stop

24. The Swoop & Squat

25. Caught On Tape: Staged Accidents

27. What could happen if you are in an accident?
Someone may come to your door
You may receive mailings from doctors and lawyers
You may receive phone calls

28. Organized Fraud Activity
How to Protect Yourself:
Health Care Provider Fraud
Ask Questions about Treatment
Review your doctor bills and explanation of benefits (EOB) form from your insurance company
Be wary if doctor recommends any new, unusual or experimental treatment
Be wary if doctor recommends specific attorney or if attorney recommends specific doctor

29. Organized Fraud Activity
How to Protect Yourself:
Auto Accident Fraud
To avoid caused accidents, such as a “Swoop & Squat, don’t follow other cars too closely
Look beyond the car in front of you while driving. Avoid distractions; cell phone, etc.
If you are in accident you believe is staged, insist on calling the police and tell your insurance company

30. What Can You do to fight Insurance Fraud?
Call Police
Call your Insurance Agent-even if the accident is minor
Take photos of damage and people
Note plate #
Note number of people in the car
Do not leave the scene

31. Who Should Fight Insurance Fraud?
Law Enforcement?
The Government?
Individuals?
Insurance Industry?
Answer: 90% of the public feel the insurance industry should be responsible for fighting insurance fraud.

32. What can you do to fight Insurance Fraud?
1-888-FRAUDMN TEL-NICB

33. Fighting fraud is a team sport – we need everyone to win the game.
Final Thoughts. . .
Fighting fraud is a team sport – we need everyone to win the game.
Fraud fighting is a team sport – we need everyone to win the game.

34. Questions?
Thank you!
Information gathered for this presentation was obtained through the Minnesota Chapter of the International Association of Special Investigation Units (MN IASIU) and outside sources.