Are we a nation of cheaters?

That’s a question posed by the publisher of U.S. News & World Report in its current issue. Mort Zuckerman writes:

zuckermanIs this a nation of cheaters? We seem to be awash with them. Corporate executives cheat; athletes cheat; students cheat, beginning in middle school and extending into high school and college; and even teachers cheat. Are the seeds of adult corruption–for that’s what it is–sown in the early years of schooling? Beginning in the ’80s, there seems to have been a marriage of the me generation with Gordon Gekko’s notion in the movie Wall Street that “greed is good.” Did our admiration of wealth lead us to overlook, even forgive, the means of its attainment?

He reasons that people like beating the system when they think it’s rigged against them: Nearly everyone feels that he or she pays too much in taxes and that others don’t pay enough. The result is cheating on taxes to the tune of hundreds of billions of dollars a year. Similarly, people watch illegal DVDs because they feel legitimate prices are “a rip-off,” they fudge insurance claims because insurance rates “are sky high . . .”

No cheatingAnd it certainly doesn’t help when people hear outrageous stories like the Merrill CEO who spent $1 million on re-decorating his office or Citigroup planning to buy a $50 million jet while taking bailout money or that Wall Street has awarded itself $18 billion in bonuses for 2008.

Zuckerman says there may be an opportunity to improve our culture of cheating if people respond to President Obama’s call for a “new era of responsibility”:

We must find a way to explain to kids how necessary it is to do the right thing and avoid what the late Sen. Daniel Patrick Moynihan called “defining deviancy down”–that is, lowering the bar on bad behavior to make it acceptable. Young people admire President Obama. Let them heed what he said in such a timely manner.

Let’s hope Zuckerman is on to something here.

Tina Turner arrested for insurance fraud?

Tina TurnerThat was the report out this morning:

Police officers arrested Tina Turner this week on suspicion of arson, reckless endangerment, and insurance fraud, following allegations that the legendary R&B singer burned down her legs for financial gain.

The witty writers of the Onion are playing off of the many recent news stories of cars and homes burning for insurance money. I especially like this section of the story:

“At first it appeared to be just another accidental fire,” lead detective Jason Hendricks said. “However, something about Ms. Turner’s story didn’t add up. She claimed to have gone to the store, only to return an hour later and find her lower half already in flames. Yet evidence seems to suggest that Ms. Turner was at the scene of the crime the entire time.”

In uncertain times like these, we can all use a good laugh. Thanks, Onion.

Protecting funds to combat fraud

budget cutsA news release showed up in my inbox yesterday and immediately caught my attention: Insurance Commissioner Poizner Announces 10 Percent Permanent Cut in Department’s Operating Budget

My first thought was, “Oh no! I wonder how many fraud investigators in California are going to get the axe.” What a shame, I thought, coming on the heels of the legislature adding more DOI investigators after many positions had gone unfilled in recent years.

Further down in the release I was relieved to read:

The reduction will not impact funding for statutorily mandated or critical program costs including grants distributed by the Department to local law enforcement governments to fight insurance fraud.

Dedicated funding is the case in many states and speaks to the wisdom of fraud fighters and legislators in isolating fraud funds from across-the-board budget cutbacks. However, not all states protect funds dedicated to fraud-fighting, so it’s important that the fraud-fighting community stays ever vigilant to ensure fraud bureaus and law enforcement receive adequate resources.

Even in those states with dedicated funding, creative governors have found ways of tapping that money and diverting it to general revenues.

As the economy worsens, the incidence of many frauds will continue to increase. This is exactly the wrong time to lessen anti-fraud resources.

Reaching out on San Diego highways

billboardIn these economic times, at-risk consumers need more reasons than ever to stay honest. They need to be reminded that cheating on insurance is a crime, that there’s a good chance of getting caught and that punishment is swift and sure. It’s disappointing that only a handful of states — namely Pennsylvania, New York and Virginia — sponsor any consistent advertising to consumers to do just that.

Most insurers and insurance associations do little in the way of engaging consumers on the issue of fraud. And fraud bureaus dedicate few funds to fraud deterrence. Most don’t even publicize their arrests and convictions as a way to deterring insurance crime. So, it was nice billboardgood to hear the news this week that billboards are cropping up in Southern California aimed at deterring workers compensation fraud.

Sponsored by the DA’s office in San Diego, the billboard campaign hopes to put a dent in one of the worst workers comp problems in the nation. The messages are dead serious and target workers, employers and medical providers. I especially like the tagline adopted for the campaign: “Don’t do it. Don’t tolerate it.” The billboards should strike a chord with the ethically challenged as well as honest citizens. Each prominently displays the fraud unit’s hotline phone number, which in and of itself serves as a deterrent. Knowing that a neighbor, a coworker or a disgruntled ex-lover can easily blow the whistle helps some people think twice about committing fraud.

The 16 billboards placed across the county target both English-speaking and Spanish-speaking drivers along San Diego’s busy highways. The program is being funded jointly by the California Workers’ Compensation Fraud Assessment Commission and the state insurance department.

There’s hope that if the outdoor advertising campaign is deemed successful — either by increasing hotline calls or reducing fraudulent claiming activity — that it will be expanded to other areas of the state.

Our hats off to San Diego DA Bonnie Dumanis and her staff for initiating this worthwhile outreach campaign.

You say you want a resolution . . .

resolveLet’s make 2009 the year we finally turn the corner on insurance fraud and truly make a difference in curbing this crime — and in the process, helping to keep insurance affordable and making the insurance system fairer for everyone.

To that end, here are a few New Year’s resolutions for the fraud-fighting community:

Insurers: Resolve to adopt a zero-tolerance attitude towards fraud. Provide adequate resources to your SIUs and recognize that a down economy is exactly the wrong time to cut back on anti-fraud activities;

Fraud bureaus: Resolve to become more efficient and adopt more strategies to deter fraud, including publicizing arrests and convictions;

Regulators: Resolve to seek greater uniformity in anti-fraud regulations from state to state, and ensure all insurers comply with anti-fraud requirements;

Prosecutors: Resolve to find creative ways to accept more fraud cases, especially the difficult ones.

State legislators: Resolve to give fraud-fighters more tools by enacting needed fraud legislation, and that goes double for lawmakers in Oregon, Virginia and Alabama, the last states that lack even a basic insurance fraud statutue;

President-elect Obama and Congress: Resolve to include strong anti-fraud provisions in any new healthcare initiatives;

Consumers: Resolve to resist the temptation to inflate insurance claims; encourage your friends, family and co-workers to stay honest.

And lastly, the coalition: Resolve to strengthen partnerships with all constituents groups, including other anti-fraud organizations, and to have a measurable impact on reducing insurance fraud.

May you stick to all of your resolutions and have a successful 2009!