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 FraudInsurance Fraud Costs Americans an Estimated;$80 Billion Dollars a YearCost to you; an estimated $1000 a year per familyPOINTS TO MAKE:(1) HOW SERIOUS A PROBLEM (FRAUD) HAS BECOME.(2) AS MANY AS THREE OUT EVERY TEN CLAIMSTHAT ARE PRESENTED, COULD BE FRAUD.(2) TO UNDERSTAND HOW MUCH MONEY IS INVOLVED
6 What could your family do with $1000 a year? Insurance FraudWhat could your family do with $1000 a year?The Reality of Insurance FraudReasons people commit insurance fraud56% feel they can get away with it32% feel they are paying too much for insurance24% 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 it32% feel they are paying too much for insurance24% are making up for their deductible(Accenture Survey – 2004)The Reality of Insurance FraudReasons people commit insurance fraud56% feel they can get away with it32% feel they are paying too much for insurance24% 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 undetectedHealth is endangeredInnocent people are killed or maimedEmployees lose jobsThe CostThe Coalition Against Insurance FraudThe amount is a hidden tax of more than $900 per family each year on the costs of goods and servicesNational Insurance Crime Bureau$30 billion/year10 percent of claimsThe extent of insurance fraud is difficult to quantify because much of it goes undetected.
11 Insurance FraudHow else are you affected? Increase in cost of goods & services Increase in insurance premiums Increase in cost of medical careThe Reality of Insurance FraudReasons people commit insurance fraud56% feel they can get away with it32% feel they are paying too much for insurance24% 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 providedPerforming unnecessary and potentially harmful tests and proceduresWorker’s Compensation FraudKnowingly lie about work related injury or illness to receive benefitsAltered DocumentsKnowingly lie about work related injury or illness to receive benefits
14 Types of Fraud Slip and Falls Premium Fraud Vehicle Thefts Property ClaimsStaged Accidents/Passenger StuffingCaused AccidentsIdentity Theft FraudPaper Cars and Vin TransfersMultiple Claims
15 Fraud Comes in Many Forms Life Insurance FraudFaked deathMurder for InsuranceHealth Care Provider Fraud
18 Organized Fraud Activity Auto Accident Fraud/Organized Ring Activity:Padding claimsCaused or Staged AccidentsJump-ins/Passenger StuffingFake helpers/Accomplice witnesses
19 Organized Fraud Activity Cappers/RunnersProfessionalsMedical ProvidersLawyersInterpretersStaged AccidentsAll parties knowingly involvedPassenger StuffingCaused AccidentsTargets-Innocent PartiesFemale driversExpensive carsBuses, delivery trucks18 wheelersCAPPERS 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 crashesBy 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.
27 What could happen if you are in an accident? Someone may come to your doorYou may receive mailings from doctors and lawyersYou may receive phone calls
28 Organized Fraud Activity How to Protect Yourself:Health Care Provider FraudAsk Questions about TreatmentReview your doctor bills and explanation of benefits (EOB) form from your insurance companyBe wary if doctor recommends any new, unusual or experimental treatmentBe wary if doctor recommends specific attorney or if attorney recommends specific doctor
29 Organized Fraud Activity How to Protect Yourself:Auto Accident FraudTo avoid caused accidents, such as a “Swoop & Squat, don’t follow other cars too closelyLook 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 PoliceCall your Insurance Agent-even if the accident is minorTake photos of damage and peopleNote plate #Note number of people in the carDo 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.