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Fraud Prevention
Introduction
Insurance Fraud is a 'Hidden' Crime
Few people talk about it & strongly disapprove of arson for profit and bogus claims. Less aggressive fraud, such as inflating a claim gets mixed reactions. To qualify as a fraud, a claim usually must be grossly exaggerated.
Extent of Fraud
10-15% of insurance claims in Canada are fraudulent. Insurers pay more than $1B a year in fraudulent claims. 85% of consumers pay extra premiums to cover fraudulent claims. This does not include other possibly fraudulent transactions that cannot be quantified. e.g., cost of improper rating because underwriting information has been withheld. True costs can never be precisely determined. Insurance fraud has attracted professional criminals & opportunists.
Effects of Fraud
It is often said that insurance fraud is acceptable because there are no victims. The "victimless" crime is the wrong way top look at things. Fraud affects everyone, by:
- Economic loss through direct physical damage.
- Economic loss as fire departments, police and other public services are used.
- Indirect economic losses to enterprises because their clients have suffered damages.
- Death or physical injury to innocent victims, firefighters, police, etc.
- Indirect economic consequences from higher premiums.
- Emotional and psychological effects of fraud on victims.
Resources
- Abso.com - Develops and delivers integrated, customized, Web-enabled solutions designed to aid in the background verification, applicant management and human resource collaboration processes. The company serves large and small businesses with legal, factual, up-to-date, systems and information enabling intelligent decisions and reduced costs via automation.
- Barry Zalma - U.S. claims and insurance fraud specialist.
- Card Cops - Credit Card Fraud.
- Financial Action Task Force on Money Laundering
- Financial Crimes Enforcement Network
- Fraud Awareness and Prevention - Course C39
- Insurance Fraud Bureau - U.S. Numerous links.
- International Compliance Association - The International Compliance Association supports and educates compliance professionals in the fight against terrorist financing, corruption, money laundering and financial crime.
- Kessler International - Offer a full range of Forensic Accounting and Investigation Consulting services to protect companies against the dangers of fraud, counterfeiting, product diversion, trademark and copyright infringement, money laundering and the recent explosion in computer crime.
- RCMP
- RECOL.ca - Reporting Economic Crime Online (RECOL) is an initiative that involves an integrated partnership between International, Federal and Provincial Law Enforcement agencies, as well as, with regulators and private commercial organizations that have a legitimate investigative interest in receiving a copy of complaints of economic crime.
- Transparency International - Purpose - To curb corruption by mobilising a global coalition to promote and strengthen international and national Integrity Systems.
