The past year has demonstrated that when the economy sours, fraud surges. The Coalition Against Insurance Fraud reports that fraud bureaus are noticing a significant uptick in their caseloads. This increased incidence comes at a time when staff resources are scant.
"The troubled economic climate confronts many fraud bureaus with the severest challenge they've faced in years," said Dennis Jay, the Coalition's executive director. "But a positive outcome could be greater efficiency in combating schemes as fraud bureaus find better ways to fight crime with the resources they do have."
The Coalition conducted a survey to examine trends in the frequency and severity of insurance fraud and how economic conditions affect the bureaus themselves. It found, on average, the referrals received and cases opened swelled across all 15 categories of fraud included in the survey.
Staged auto accidents and workers' compensation fraud by employers represented small average increases. Meanwhile, drivers continue to ditch vehicles in search of securing a big payday from insurers for bogus claims. Seven of 10 fraud bureaus report more vehicle give-up cases, the Coalition said.
As evidenced by the survey stats, some homeowners continue to seek their own brand of insurance bailout through arson. Sixty-three percent of fraud bureaus report an increase in home arson-related referrals and cases. This trend appears to involve regional or local hotspots instead of an evenly spread national dilemma, as noted in the survey.
"Shakedowns of businesses also appear to be spreading, with 60 percent of fraud bureaus seeing spikes in suspected bogus liability claims," the Coalition said. "Reports of increases in slip-and-fall claims from insurers and self-insurers — especially grocers, department stores, and restaurants — began surfacing in early 2009 and seem to have continued."
As crime trends expand, 63 percent of bureaus reported working with lower budgets and less staff in 2009.
"This is somewhat surprising, given that a majority of the fraud bureaus were created with dedicated funding, specifically from assessments on insurers," the Coalition noted. "Nearly a quarter of the fraud bureaus also lost staff positions this year, and a third of these agencies were forced to leave vacant positions unfilled."
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