Annual report - 2006
"The State of the Fraud Fight"
An excerpt from the full report
The 21st Century marches inexorably onward. Are fraud fighters marching with it? More important, how do we stay ahead of the rising sophistication of swindlers and their seemingly swelling populations? This is the only way we’ll turn the corner against one of America’s largest and most-damaging crimes.
The coalition is working to help forge a bold new plan for combating fraud. This vision will represent the united voice of fraud fighters throughout the U.S. Throughout 2007, the coalition will begin reaching out to everyone affected by insurance fraud-insurers, investigators, law enforcement, legislators, regulators and consumers. Equally important, this effort will include fellow anti-fraud organizations.
Start plan now
Together, we’ll draft a five-year plan for controlling this crime. The result will be an anti-fraud Magna Carta. It will reflect the best thinking available, and include diverse perspectives. Completing this plan will extend beyond 2007, but it must begin now. Fraud fighters already have achieved much success against this crime. Prosecutions and convictions have risen steadily over the last 10 years. Some 47 states have made insurance fraud a specific crime, and 42 have opened up multi-line fraud bureaus. About four of every five insurers now have special investigation units. Fraud bureau staffs and budgets are growing.
And how many swindles are never even committed because our very presence convinced schemers that fraud isn’t worth the risk?
Put conmen on defensive
But even so, fraud remains vast, persistent and immensely damaging. It victimizes—and is committed by—people from all strata of society. Public tolerance of fraud remains troublingly high. And increasingly, many swindles are run by large gangs that steal insurance money on an industrial scale, often with seeming impunity.
Fraud fighters have come far in the last 10 years. But now we must widen our shared mission. This will require bigger, bolder and better thinking than ever.Going forward, our goal is not to respond to fraud. We must make fraud respond to us. We must put swindlers permanently on the defensive, and cast an ever-widening shadow over their operations. Engineering this vision into fact will require a comprehensive blueprint for reform.
Among the agenda items:
• Compile more hard fraud data. Despite its vast size and damage, insurance fraud is among the least-researched crimes in America. To control this crime, we need much more hard data about it. How big is fraud? Current figures are only educated guesses. How much does fraud cost society—in stolen dollars, lost productivity and human costs? How big is smaller-dollar “soft” fraud? What motivates—and deters—swindlers? What doesn’t?
• Streamline and better share data. Property-casualty insurers are working to improve the volume and quality of anti-fraud data they gather. This includes making data more-uniform and more broadly available. Should this effort include health insurers and government? What other directions should this effort take?
• Widen the sharing of field intel. Property-casualty fraud fighters also are broadening intelligence-sharing. This includes working to involve healthcare and other lines of insurance. This circle also should include state and federal agencies that battle many of the same schemes.
• Increase involvement in legislation. Fraud fighters must widen their state-level legislative advocacy to better ensure effective fraud laws are passed, whenever and wherever needed. More research also is needed: How effective are current fraud laws? Where are the gaps in laws? Should fraud fighters create and fund a national legislative agenda each year? What about training in legislative advocacy?
• Improve anti-fraud training. Turning the corner on fraud will require a street-level force with state-of-the art training. Should there be uniform training standards? How do we update training as fraud evolves and fraud-fighting techniques advance? How can more insurers be encouraged to support enhanced training?
• Better integrate claims processing. Most fraud is uncovered during claim processing. But more insurers need to align their claims operations with their SIUs. How can insurers better move claims into the fraud fight? How can insurers improve fraud training for claims staff? Do insurers have enough claims handlers? Should we create benchmarks for fraud training and detection?
• Explore a national outreach campaign. Collectively, our public-outreach efforts are fragmented, ill-focused and lack true science (see Research). Fraud fighters already public attitudes: Why do people tolerate fraud? What outreach messages deter would-be swindlers? How do we reduce the public’s high tolerance of fraud?
• Change with a changing population. Newcomers from His panic and Asian nations are now major population groups in the U.S. Generations X & Y are coming of age. Boomers are becoming seniors. We’ll need increasingly targeted anti-fraud strategies that consider their diverse behaviors, values, attitudes, languages and cultures.
• Develop anti-fraud leaders. Fraud fighters must build a larger core of leaders and change-makers. How do we identify potential leaders? What leadership skills will they need? How do we develop those leadership skills? Should we create a national leadership pro gram?
Fraud fighters have come far in the last 10 years. But now we must widen our shared mission. This will require bigger, bolder and better thinking than ever. It’s an exciting time. The coalition invites fraud fighters everywhere to join in this important next step.
