Alright, we’re all bored of hearing how the pandemic has yet again made things more difficult. The “one insurance scam a minute” news in January was particularly disheartening … so let’s try and keep this lighthearted, and straight to the point!
Here’s the background;
- No surprise, but we’re in a bit of a sticky economic crisis. In 2007-2009 fraudulent claims rose by 17%, and a recent report shows a rise in both ‘Claims Vishing’ and ‘Claims Farming’.
- In the last 18 months businesses have, more than ever, been forced to find new ways of delivering services remotely. Operations and processes have been in almost constant review, offering a small (or flipping massive) window of opportunity for fraudsters.
- During the pandemic, where there has been heightened concern over information sharing, and where the regular checks and processes needed to be protected like the Pope, there has been a colossal number of challenges to the way these checks and processes are run. If insurers are Superman, and fraudsters are Lex Luthor the pandemic is Kryptonite.
Why is fraud investigation such a pain in the behind right now?
- Like the virus itself, fraudsters adapt. Lack of consistency makes it hard to identify. Lockdowns and social distancing rules have also been regularly changed, and restricted the way that investigators can collect evidence, conduct interviews… and effectively do their jobs. This loss of human insight means there is just less information available.
- Other opportunities have arisen from the pandemic, such as using Government payments as bait, or issuing fraudulent fines for breaking lockdown rules to squeeze cash out of the unsuspecting public.
- As we’ve been doing the bulk of our shopping online, those less familiar with the internet are vulnerable to deception. Moreover, just the sheer rise in digital accounts and payments itself has increased the risk.
Types of fraud may include;
Phishing emails; claiming to be from a company you know, and encouraging you to give sensitive information.
Fictional portals; a website or portal set up to take payment for fake policies.
Identity theft; where fraudsters steal your personal information, and use it for fraudulent transactions or for otherwise financial gain.
What can insurance businesses do to kick fraud where it hurts?
1. If you’ve got claims handlers, conduct refresher training on awareness and methods fraudsters use (a healthy supply muffins and other baked goods may also help). This will benefit them in identifying claims anomalies, and referring them onto your fraud team or similar.
2. Have a look into anti-fraud solutions, finding an expert to help combat fraud could save you some time and money!
3. Share emerging threats and best practices with members of your network. Sharing is caring and all that…
4. Share what you know with your customers. Help them identify the patterns fraudsters are using, and what to check for, so when you get in touch they know that it’s you!
Definitions, should you need them;
‘Claims Farming’
A term that refers to an activity done by companies, or individuals, that encourage members of the public to make a claim. Lawyers will pay a fee for every new claim referred to them, therefore the ‘claim farmer’ will profit. Oftentimes this will involve the claim farmer referring to a fictional road traffic accident, where the member of the public will be encouraged to make a claim.
‘Claims Vishing’
Used to describe calls made by organised criminals to the average person, in order to extract personal information – often this will include bank details. They may at first appear to be genuine, and often use sophisticated tactics to continue the ruse such as referring the person to a fake website, with contact details that link back to them. They may manipulate the situation to encourage the person to make a fraudulent claim, or use the information they get to make the claim themselves.
