False insurance claims

False insurance claims

Insurance fraud or false insurance claims are insurance claims filed with the intent to defraud an insurance provider.

In the United States insurance fraud is estimated to cost US$875 per person per year with The Coalition Against Insurance Fraud estimating the loss to be $80 billion per year and Medicare estimating fraud in its system costs the government $179 billion per year.

Types

Health insurance fraud

Health insurance fraud is described as an intentional act of deceiving, concealing, or misrepresenting information that results in health care benefits being paid to an individual or group.

Fraud can be committed by both a member and a provider. Member fraud consists of ineligible members and/or dependents, alterations on enrollment forms, concealing pre-existing conditions, failure to report other coverage, prescription drug fraud, and failure to disclose claims that were a result of a work related injury. Provider fraud consists of claims submitted by bogus physicians, billing for services not rendered, billing for higher level of services, diagnosis or treatments that are outside the scope of practice, alterations on claims submissions, and providing services while under suspension or when license have been revoked. Independent medical examinations are used to debunk false insurance claims and allow the insurance company or claimant to seek a non-partial medical view for injury related cases.

In response to the increased amount of health care fraud in the United States, Congress, through the Health Insurance Portability and Accountability Act of 1996 (HIPAA), has specifically established health care fraud as a federal criminal offense with punishment of up to ten years of prison in addition to significant financial penalties.

Auto (or Motor) insurance fraud

Globally, one of the largest categories of insurance claims fraud revolves around the insurance of vehicles. There are a number of modus operandi:

taged collisions

This rapidly growing category involves staging a collision where the fraudsters will use a vehicle to stage an accident with the innocent party. Typically, there would be 4 or 5 fraudsters in the vehicle which makes an unexpected manoeuvre causing the innocent party to collide with the fraudsters vehicle. Each of the fraudsters then claim for injuries sustained in the vehicle. Working with a “recruited” doctor, the injuries are typically whiplash or other soft tissue injuries which are hard to dispute later.

Exaggerated claims

A real accident may occur, but the dishonest owner may take the opportunity to incorporate a whole range of previous minor damage to the vehicle into the garage bill associated with the real accident.

Examples

Some memorable examples of insurance fraud include the following:
* Former British Government minister John Stonehouse went missing in 1974 from a beach in Miami. He was discovered living under an assumed name in Australia, extradited to Britain and jailed for seven years for fraud, theft and forgery.
* Derek Nicholson and Jottie Nagle were accused of attempting to defraud a life insurance company for $1 million after Mr Nicholson apparently went missing in New Jersey in July 2003 and Ms Nagle reported him missing and made a claim on the policy.
* Gaylan Sweet of San Diego, California, who was a claims adjuster for Allstate Insurance set up a scheme in 2002 that included non-existent children who were killed in hit-and-run auto accidents at non-existent intersections by phantom drunk drivers. Sweet and two others (who posed as the parents of the non-existent children) pocketed $710,000 before being caught by Allstate and later jailed for five years.
* John Magno, a Toronto businessman, allegedly hired accomplices to set fire to his Woodbine building supply hardware store so he could collect insurance money. This was one of the biggest fires in the city's history as more than 170 firefighters were required to bring the six-alarm blaze under control. One accomplice was burned to death, and another was in a coma for several months. Not only did investigators immediately suspect arson, Magno and his accomplices were later charged with second-degree murder.

External links

* [http://www.insurancefraudbureau.org/ The Insurance Fraud Bureau]
* [http://news.bbc.co.uk/1/hi/programmes/moneybox/6186027.stm BBC article on insurance staged accident scams]
* [http://news.bbc.co.uk/2/hi/americas/3734274.stm BBC article]
* http://www.insurancefraud.org
* http://www.insurancejournal.com/news/west/2002/12/20/25075.htm
* [http://www.nhcaa.org http://www.nhcaa.org]
* [http://www.carsnaps.com/articles.php?id=38 What is Auto Insurance Fraud and How to Prevent it?] by CarSnaps (2006)
* [http://www.computerweekly.com/Articles/2007/08/09/226116/insurance-fraud-bureaus-data-mining-initiatives-net.htm Computer Weekly Article on detecting staged accidents]
* [http://www.johncooke.com John Cooke Fraud Report]
* [http://www.fightfraudamerica.com www.fightfraudamerica.com]
* [http://www.zalma.com/webdoc8.htm Zalma's Insurance Fraud Letter]


Wikimedia Foundation. 2010.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • Insurance fraud — Criminal law Part …   Wikipedia

  • Claims adjuster — Claims adjusters investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company’s liability.[1] In the United Kingdom, Ireland …   Wikipedia

  • False advertising — or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use… …   Wikipedia

  • insurance — /in shoor euhns, sherr /, n. 1. the act, system, or business of insuring property, life, one s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a… …   Universalium

  • Insurance — This article is about risk management. For Insurance (blackjack), see Blackjack. For Insurance run (baseball), see Insurance run. In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a… …   Wikipedia

  • Life insurance — The foundation of life insurance is the recognition of the value of a human life and the possibility of indemnification for the loss of that value. F. C. Oviatt, Economic place of insurance and its relation to society[1] Life insurance is a… …   Wikipedia

  • HIH Insurance — was Australia s second largest insurance company, which was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered to be the largest corporate collapse in Australia s history, with liquidators estimating that HIH s… …   Wikipedia

  • Fake Claims — The term fake claims refers to insurance claims that are made fraudulently. These claims are made in an attempt for the policy holder to benefit financially from making claims that are false or exaggerated. While such practices are a fairly… …   Investment dictionary

  • Disability insurance — Disability Insurance, often called DI or disability income insurance, is a form of insurance that insures the beneficiary s earned income against the risk that a disability will make working (and therefore earning) impossible. It includes paid… …   Wikipedia

  • State Children's Health Insurance Program — The State Children s Health Insurance Program (SCHIP) – later known more simply as the Children s Health Insurance Program (CHIP)[1] – is a program administered by the United States Department of Health and Human Services that provides matching… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”