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Insurance Fraud

Must Know Facts About Insurance Fraud

Must Know Facts About Insurance Fraud

Insurance fraud is the act of illegitimately seeking payment from an insurance provider for a false claim on an insurance policy. It covers a wide spectrum of different possible acts and crimes, as each instance of insurance fraud could be slightly different from another. The many different types of insurance available to consumers ensure this, if nothing else. Insurance fraud has changed as time has passed, taking on different forms, with often times more complex strategies than the very basic lies that served the function in the past.
But with the advancement of insurance fraud’s own methods, investigations into insurance fraud have similarly become more complex, more focused, and more capable of rooting out the worst offenders. Many smaller instances of insurance fraud may pass unexamined, if only because there is such a tremendous quantity of insurance claims submitted every day, that for an insurance company to examine them all would take too much time. But the serious offenses of insurance fraud will often be caught out.
Insurance has been in existence, in one form or another, for centuries, and insurance fraud has been around for just as long. The option to take advantage of a system such as insurance for the sake of personal gain is often too tempting for fraudsters to ignore, so they perpetrate insurance fraud to earn money from the system which should be in existence to protect policy holders.
All forms of insurance fraud involve deception, and most often revolve around convincing insurance companies that the claim is actually legitimate, or at least is not worth investigating further. Insurance companies have to play a game of risk/reward in relation to fraud, a game in which they attempt to determine whether or not it is more worthwhile to let the claim go than it is to actually to investigate it and determine whether or not it is fraudulent.
But regardless of whether or not an insurance company decides to pursue a given individual case of insurance fraud, the act itself is perpetrated all throughout the world, and continues to be a major hindrance to the overall functioning of the insurance system. To find out more about insurance fraud’s history and its modern form, follow the link.
The methods for perpetrating insurance fraud will vary between each and every type of insurance. To perpetrate life insurance fraud, for example, will take an entirely different type of deception than it would take to perpetrate car accident insurance fraud, or health care insurance fraud. Even the motivations between each given form of fraud might vary, as life insurance fraud will be almost unquestionably performed for the sake of money, while health care insurance fraud might be performed by a doctor for the sake of his patient’s well-being.
Navigating the different possible methods for perpetrating insurance fraud is the objective of fraud investigators, who must somehow cut through the often elaborate deceptions of insurance fraud in order to find the truth of the matter. Sometimes, investigators will discover that what might seem to be an elaborate web of insurance fraud is actually legitimate, but other times, the a fraud investigation will cut straight through the lies and reach the kernel of truth underlying all. Understanding the methods of perpetrating insurance fraud, then, is an important component of preventing it. For more information on the methods behind insurance fraud, click the link.
Hard fraud is a kind of insurance fraud involving significantly more blatant activity than the other form of insurance fraud, soft fraud. Hard fraud most often involves a plan of some kind, with multiple perpetrators even, creating situations in which they might collect insurance money from insurance companies without suffering any kind of penalty. Those who would perpetrate hard fraud are most often those who would more readily perpetrate crime in general, as hard fraud comes significantly closer to pre-planned crime in its form.
Examples of hard fraud abound, from planning on a way to force a victim into a car accident, in order to collect insurance money from the victim’s insurance provider, to staging accidents in order to fake injuries, so as to collect insurance money from those claims. Most hard fraud involves such a pre-planned scheme of some form or another, and also involves close to outright deception in perpetrating the fraud; hard fraud attempts to obtain insurance money are not based on actual, legitimate claims, as they are entirely invented and fabricated through the hard fraud scheme. For more about hard fraud and its characteristics, follow the link.
Soft fraud is the other kind of insurance fraud, next to hard fraud. Where hard fraud refers to premeditated, near criminal schemes of deception, soft fraud is most often committed as a crime of opportunity, with no premeditation. Soft fraud is also a type of fraud based on legitimate claims. For example, an instance of soft fraud would be when someone gets into a car accident, and then files a claim for more money than the car repairs actually cost. There was a legitimate claim involved, but the amount of the claim was exaggerated by the fraudster in this case.
Many people do not see this particular kind of fraud to be as terrible as hard fraud, instead seeing soft fraud as “little white lies.” Nonetheless, however, soft fraud is fraud, still, and is just as much of a crime, though it might not have some of the criminal charges involved in perpetrating hard fraud associated with it. Soft fraud is significantly more common than hard fraud, seeing as soft fraud does not require the kind of premeditation and intent to commit a crime that hard fraud does.
Soft fraud cases are also more often settled out of court. But soft fraud in general poses a threat to any health care consumer, because the prevalence of soft fraud ensures that insurance companies will charge higher premiums, to recoup their losses from soft fraud cases. For more information about soft fraud, how it is perpetrated, and what its effects are, click the link.
Insurance fraud penalties are determined on a state by state basis. There are no definitive federal penalties for insurance fraud, but there are some characteristics that do carry between the states. In general, hard fraud will always be given higher penalties than will be soft fraud, because hard fraud involves significantly more premeditation and fraudulent deception.
Hard fraud is also most likely to incur criminal penalties above and beyond any penalties for insurance fraud. Penalties for insurance fraud can include fines, ranging from $1,200 to $50,000 depending on the state, and jail time, ranging from 5 to 15 years in jail, again depending on the state. The problem, of course, is that in order for any penalty to be levied against a perpetrator, that perpetrator must first be discovered, caught, and then prosecuted.
Thus, the primary hindrance to any kind of insurance fraud penalty being used to punish a perpetrator is that a large amount of insurance fraud goes either uncaught, or unprosecuted. For more information on the penalties for insurance fraud and how they vary from state to state, follow the link.
Reporting insurance fraud is critical for combating it in any substantive fashion. Insurance fraud is relatively difficult to detect using any kind of system, and a lot of the best information that can lead to successful prosecution of insurance fraudsters comes from tips and reports made by those with some information to share. If you have any such information, then there are a number of different ways you can go about reporting it.
State insurance fraud bureaus exist to help prosecute instances of insurance fraud, and reporting any information at all to such bureaus would be a good way to ensure that those instances be successfully prosecuted. The National Insurance Crime Bureau also exists to take any tips about cases of insurance fraud, in order to better police the insurance world.
Good tips to keep in mind when reporting insurance fraud include having as much information as possible, in order to give as complete a report as possible, and potentially getting in touch with a lawyer along with the organization you report to, in order to ensure that you are fully protected from any repercussions. To find out more about the process of reporting insurance fraud and those organizations that are best to report to, click the link.
Insurance fraud detection is a very difficult process, mostly because there are so many insurance claims placed every day that sorting through them to find the couple of fraudulent claims remains very, very difficult. Genuinely examining every claim thoroughly would require a tremendous number of employees, working constantly around the clock, and even then, many fraudulent claims would likely slip through the net. Instead, many insurance companies employ some kind of statistical analysis of claims, designed to look for some form of anomaly in any given claim.
But this is still a very fallible method of analysis, even though it can be applied to significantly more claims in a given day than can the analysis of a single individual, or even a group of individuals. The bottom line is that insurance fraud detection is hindered by the sheer volume of claims that must be examined. But there are numerous methods for sifting through that mass, and many new methods and techniques are approaching a much greater level of detection than any before. To find out more about these methods of detection, both old and new, follow the link.
There are numerous different types of insurance fraud, each of which has its own hallmarks and particular methods that define it, beyond simply being concerned with one particular type of insurance. Auto insurance fraud, for instance, comes in both soft and hard fraud forms, where soft fraud involves simply taking advantage of a momentary opportunity by exaggerating a claim, while hard fraud involves outright deception or staging of an accident.
Health insurance fraud, on the other hand, is most often not perpetrated by the insurance policy holder him or herself, but is instead perpetrated by the health care professional. Health care professionals will often perpetrate insurance fraud when they attempt to help patients by obtaining for them care which they could not otherwise afford, but they can also perpetrate insurance fraud when they use their positions of power over patients in order to squeeze more money out of insurance companies by recommending unnecessary procedures and the like.
Life insurance fraud generally can only take two possible forms, one in which the life insurance policy holder fakes his or her death, so that a beneficiary can illegitimately claim the insurance money, and the other in which a life insurance policy holder is murdered, generally by the beneficiary, so that the life insurance policy can be claimed. Property insurance fraud is yet another type of insurance fraud, involving the willful destruction of property, generally owned by the perpetrator him or herself, in order to collect on the policy for that property.

Understanding The Methods Insurance Fraud

Understanding The  Methods Insurance Fraud

An insurance fraud investigation must be focused on determining exactly how the fraud was perpetrated, as understanding the method of the insurance fraud will also likely prove that insurance fraud did take place. A fraud investigator, then, will often focus his attention on examining the potentially fraudulent ways that the claimant might have manipulated events such that he could make his insurance claim.
 
 
Depending on exactly what type of insurance the claim is being made on, there could be any number of different methods for perpetrating insurance fraud. It's up to the fraud investigator to narrow down those methods, to find the one that was employed, or else to find that no method fits the incident, and there is no fraud.
 
 
Life insurance is one of the most obvious in terms of methods for insurance fraud, and the fraud investigation will likely be focused on the sole available route. The only way that insurance fraud can be perpetrated with life insurance is if the individual protected under the life insurance did not actually die, but instead faked his death, so that someone close to him could collect on the claim, and then likely share the money.
 
 
The fraud investigator, then, will be focused on trying to prove either that the individual is genuinely dead, or that he has faked his death and perpetrated insurance fraud. Such a fraud investigation is often difficult in the search, but it has quite a clear goal: if the individual in question is every discovered to be alive, then insurance fraud was perpetrated almost without a doubt.
 
 
 
Health care insurance fraud is far less clear cut than life insurance fraud, and fraud investigation into it will likely need to be much more nuanced, and much more penetrating. Health care insurance fraud is most often perpetrated by health care providers because those doctors will lie in order to get the best possible service for their patients.
 
 
Doctors can lie on billing, telling insurance companies that they performed one service, while in actuality they performed an entirely different operation, most likely because the insurance company will cover the service actually listed, but not the service actually performed. It is up to fraud investigators to determine whether or not the actually performed operation was the one listed on the bill. Other types of insurance fraud for health care insurance often involve significantly more mercenary aims, as doctors can perpetrate fraud in an attempt to get more money.
 
 
Performing unnecessary medical procedures and billing for them is one key way that this kind of fraud takes shape; prescribing medical help without any actual need for it is a common way for doctors to earn more money, either for themselves or associates. The only way for a fraud investigation to successfully out such practices is for the fraud investigator to consult with other medical professionals, in the hopes of discovering whether or not any given procedure was actually necessary.
 
 
Car insurance fraud takes form in a similar fashion to the more mercenary forms of health care insurance fraud. Claimants will sometimes attempt to make money by claiming that injuries not related to a car accident were actually caused by the car accident in question, so as to make some money for the injuries; or they will claim that the repairs on the car that should fall under the protection of insurance cost more than they actually did.
 
 
These forms of car insurance fraud are more common, and easier for fraud investigations to out, considering that records are likely to exist that will either prove or disprove the claim. Car insurance fraud can also involved staged accidents, however, or faking injuries from a car accident. These may be a bit harder to detect for a fraud investigator, not least because these types of fraud often involve a greater degree of care and precision in the perpetration. But nonetheless, a good fraud investigator will be able to find the truth through the deception, and will be able to prove that the claims are fraudulent.

Must Know Information About Insurance Fraud Penalties

Must Know Information About Insurance Fraud Penalties

Insurance fraud penalties are not uniform across the country, and are especially not uniform between different types of insurance fraud. Some types of insurance fraud are inherently more destructive than others, and therefore are met with harsher insurance fraud penalties. Generally speaking, soft fraud is met with less in terms of penalties than hard fraud, though this is not an absolute rule. 
 
 
As an example of one state's insurance fraud penalties, consider New Jersey's policy. For health care insurance fraud, the perpetrator would be facing a sentence of up to $150,000 in fines, along with a stay in jail of 3-5 years. If the perpetrator is actually a medical provider, then that jail time can be escalated to 5-10 years.
 
 
Unemployment insurance fraud, on the other hand, is treated as if it were a theft crime, with the punishment depending upon the exact amount of money stolen. A false insurance card in an auto insurance accident can cost a $10,000 fine and 18 months in jail, and attempting workers compensation insurance fraud can result in the same.
 
 
Simultaneously, in New Hampshire, there are different insurance fraud penalties. You can be charged with a Class A or B Felony, or a Class A or B Misdemeanor. A felony is much more likely to be applied to perpetrators of hard fraud, who likely planned out the crime, and based it on a more open deception. Soft crime, which is more an exaggeration of a legitimate claim, is likely to be termed a misdemeanor.
 
 
Class A Felony charges can have maximum terms of 7 and 1/2 to 15 years in jail, along with fines of $4000, or no more than double the actual ill-gotten gains of the fraud. A Class B Misdemeanor, on the other hand, will only hit the perpetrator with a fine of $1,200. The two middle charges span the two poles, setting up a spectrum of severity to be applied as insurance fraud penalties to any particular insurance fraud case.
 
 
In Michigan, a law was passed to impose significantly harsher insurance fraud penalties, to discourage would-be perpetrators from the crime. The law makes it a full-out felony to perpetrate any acts of insurance fraud, and those who are successfully convicted of insurance fraud can be sent to prison for a maximum of four years, and then have to pay a fine of $50,000. 
 
 
Unfortunately, the primary problem facing the implementation of all of these insurance fraud penalties is that of insurance fraud detection. Insurance fraud often goes completely undetected, whether because the values are too small to really attract the attention of any fraud-seeking systems, or whether it's because the insurance companies decide that it isn't worth it to pursue an investigation of fraud for this particular fraudulent claim.
 
 
Insurance fraud detection systems are not foolproof, and even when they do function correctly, it is possible that the insurance fraud charge will not be brought to law enforcement's attention, and thus, no insurance fraud penalties will ever be brought to bear.

Guide to Reporting Insurance Fraud

Guide to Reporting Insurance Fraud

Reporting insurance fraud is very important, as it is not only the right thing to do, but it will also help to decrease the costs for insurance fraud spread out to all other policy holders. It will also ensure that fraudsters will be brought to justice for their actions, which is very important for ensuring that no one takes advantage of the system. Contact a fraud lawyer to acquire legal advice and assistance.

The best way to go about reporting insurance fraud is to contact your state's insurance fraud bureau. These bureaus are generally state maintained organizations specifically aimed at reducing and eliminating insurance fraud. Reporting insurance fraud to this organization will ensure that your information will reach the correct ears. Furthermore, these bureaus will generally try to protect those who report insurance fraud from any kind of repercussion or connection to the fraud. If you have any information for reporting insurance fraud, then finding out the number for your state's insurance fraud bureau is a good first step.

Unfortunately, not all states have insurance fraud bureaus. If you do not have such a bureau to contact, or even if you do have such a bureau, but you want to report insurance fraud to all the relevant agencies, then you would do well to next contact the insurance company suffering from the fraud itself. Reporting insurance fraud to the insurance company can sometimes help them to begin an investigation into the fraud, preventing any further wrongdoing. Some insurance companies may have toll-free hotlines specifically for this purpose.

The National Insurance Crime Bureau is another good source at which to report insurance fraud.  The Bureau is not a government organization, but is instead a non-profit, organized and run by the insurance industry, with its specific purpose being the reduction and elimination of insurance fraud. You can contact them with a number easily found on the Internet, and also by visiting their website at NICB.com.

If you find instances of fraud surrounding specific practices, then you would do best to get in touch with the regulatory body for that specific practice. For instance, if you find out about insurance fraud involving Medicaid, you would do well to report insurance fraud to the US Department of Health & Human Services, as they are the federal body most oriented towards protecting Medicaid.

Similarly, you can report insurance fraud attempts towards the Social Security system by getting in touch with the Office of the Inspector General, which is responsible for the Social Security Administration. You can report insurance fraud involving a health care provider to your state's medical board, which will likely be able to issue some kind of censure upon the doctor to prohibit him from practicing medicine as a punishment.

In general, when reporting insurance fraud, you should be ready and willing to provide as much information as possible. Without your help in providing information, it is likely that your tip may not amount to anything. Important pieces of information that you should strive to have when looking to report insurance fraud include the dates and names of those involved, any organizations that might be involved, the amount of money that you think might have been stolen in the fraud, and as many details about the nature and procedures of the scam as you can possibly provide.

Jail Sentence For Insurance Fraud At A Glance

Jail Sentence For Insurance Fraud At A Glance

Insurance fraud can include serious legal consequences. In fact, the rate of insurance policies has increased in recent years so that insurance companies can pay for the frequent cases of insurance fraud.
 
Individuals that are facing insurance fraud charges will be charged with separate counts for each claim made, even if the claims resulted from the same incident. In addition to jail time, insurance fraud can include fines, restitution, community service and parole.
Jail time for insurance fraud will depend on the specific circumstances and the jurisdiction. For example, the number of claims which were fraudulent will greatly affect the jail sentence, as will the type of fraud committed. The sentence is not reduced for first offenders, but may be increase for repeat offenders.

What Do If Your A Victim Of Insurance Fraud

What Do If Your A Victim Of Insurance Fraud

If a person is a victim of insurance fraud it is important to immediately contact their insurance company. The insurance company will help the individual through the process of proving that they in fact are the victim of insurance fraud. Often, the insurance company will either file a police report in the victims honor, or ask the individual to do so themselves. Either way, filing a police report is a key step to helping solve the insurance fraud issue.
 
 
In most cases, a person will have to appear in court to testify against the other individual and provide the court with necessary documentations proving their use of insurance. Since court is a high possibility, it is often advised to seek legal support and advice to help properly prove the case in court. In most cases, a person who is the victim of insurance fraud will receive reparations to help pay for the damages that the insurance fraud caused.
 

Soft Fraud Overview

Soft Fraud Overview

Soft fraud is the type of insurance fraud in which the perpetrator lies to the insurance company in a claim, but in a more subtle, sometimes more innocuous fashion. A prime example of soft fraud, is that of an individual who claims that he or she is sick, when he or she is not, and thereby manages to take the day off from work while receiving workers' compensation benefits.
 
 
Soft fraud would also cover those times when a claimant's property was stolen, but the claimant then goes on to lie about the actual value of that property when filing the claim with an insurance company, for example. Even though this seems to be something of a negligible "white lie," the point is that it is still insurance fraud, and it is still a punishable offense. Workers' compensation is actually one of the most common sources of soft fraud, as it is all too easy to exaggerate injuries or illness for the sake of receiving just that extra bit more money. 
 
 
Whereas hard fraud very often involves foresight and planning, soft fraud is much more often a crime of the moment, or of opportunity. When one realizes that with only a small bit of misrepresentation in monetary values, he or she can make some small sum of extra money, then he or she may do so, while thinking that it doesn't actually do much harm. As a result, soft fraud is far more common than hard fraud; since it doesn't need any planning, only an opportunity, soft fraud becomes tremendously more tempting to those who would never perform a planned crime, but might seize upon an obvious opportunity.
 
 
Soft fraud the form of insurance fraud that is most difficult to detect, because soft fraud inherently involves a legitimate claim at its core. A perpetrator of soft fraud is not lying about the fact that items were stolen from him, for example; that is most certainly true. But he is lying about the items' worth, or about exactly which items were stolen, sometimes even going so far as to say that certain items, which he never actually owned, were stolen. Soft fraud is also generally for smallish amounts of money, and the overall lie is not very large or easily detected; after all, if the item was stolen, there is no easy way to verify how much it was worth. As a result, soft fraud often goes uncaught.
 
 
Most members of the public view soft fraud as "victimless," in the sense that the only one who suffers from soft fraud is the insurance company, and any given insurance company likely has enough money to pay for such small counts of insurance fraud, anyway. But unfortunately, the picture is not so simple. Insurance fraud in general costs insurance companies money, which then pushes those companies to increase premiums. In other words, all insurance fraud makes buying insurance just an extra bit more costly.
 
 
Soft fraud, as not only the most common form of fraud, but the form of fraud that most insurance companies determine is less costly to simply let go and not investigate, is actually largely responsible for these price hikes. Insurance companies lose millions of dollars to soft fraud every year, and the only defense they have besides paying exorbitant sums by investigating every claim is to raise the price on premiums. As a result, then, every single insurance purchaser suffers somewhat from the perpetration of soft fraud.