| Insurance fraud accounts for about 40 billion | | | | Government Accountability Office uncovered that |
| dollars in losses each year- sometimes ranging as | | | | approximately 85 billion dollars in insurance fraud |
| high as 80 billion, and as economic downturns and | | | | alone came from that sector. The Association of |
| unemployment worsens, so too does the | | | | Certified Fraud Examiners' 2008 Report to the |
| occurrence of what is commonly referred to as | | | | Nation on Occupational Fraud and Abuse has also |
| 'opportunistic fraud'. Basically, this is when the | | | | revealed that check tampering, skimming, |
| policy holder has a claim that is legitimate, but | | | | corruption and billing fraud were the most |
| pads their claim a bit to get a higher payment- | | | | common fraud schemes, with check tampering |
| and it is on the rise. You may be thinking that this | | | | much more common in the health care insurance |
| only impacts the insurance companies, however | | | | industry alone. Insurance industry check tampering |
| year after year as this continues to escalate, | | | | usually happens when legitimate checks are made |
| policy holders find that it gets more and more | | | | out to those who do actually have a valid claim |
| expensive to insure. Basically, insurance fraud cost | | | | are stolen, or just completely creating a check to |
| families roughly anywhere between four hundred | | | | people who really don't even exist. |
| and seven hundred dollars per year in increased | | | | The insurance industry itself, being such a broad |
| premiums the FBI website on insurance fraud | | | | range entity collects approximately 1 trillion dollars |
| shows. | | | | in premiums each year, making it a high stakes |
| There are two types of insurance fraud, the | | | | target for opportunists seeking to run a scam. |
| Insurance Information Institute says, and these | | | | Many who engage in the soft fraud imagine that it |
| are usually classified as hard and soft fraud. A | | | | is a victimless crime, but the statistics in premium |
| hard fraud is pretty much what it sounds like- the | | | | increases show them to be wrong. The economic |
| entire thing is made up, or fabricated. This can | | | | impact of this crime is not yet fully known, but it |
| either be a fake claim or even a staged accident. | | | | is clear that as the economy wobbles back and |
| The term soft fraud refers to the cases of | | | | forth more and more fraudsters are coming into |
| opportunistic fraud where claims are padded. This | | | | the fray with newer scams all the time. So while |
| can also encompass employers who misrepresent | | | | some may imagine that these crimes really aren't |
| the work employees do or list less employees | | | | hurting anyone- in all actuality they are furthering |
| than they actually have- so that they are paying | | | | a cycle of economic woe- the short term gain in |
| out lower worker's compensation premiums. | | | | most frauds tends to cycle back around into |
| Some forms of insurance see greater opportunity | | | | longer term losses as premium increases cause |
| for fraud to strike. In 2003, The Blue Cross and | | | | more families to feel the pinch. |
| Blue Shield Administration and the U.S. | | | | |