Newspapers are atwitter in the U.K. about two British students on vacation who have been jailed in Brazil for allegedly faking a robbery so they can file a bogus insurance claim. The two 23-year-old law school students are being held in a reportedly nasty third-world jail on charges of making a false report of losing $2,500 in cell phones and iPods. Police in Rio de Janerio say a search of the women’s room at a local youth hostel turned up the ‘stolen’ items.
The pair faces one to five years in prison, a stiff sentence that police in Brazil say is needed because of the growing number of fake claims being made by vacationers from the U.K.
Fake claims against travel policies in Europe is big business. Nearly 50 percent of people surveyed a few years ago in the U.K. said such fraud was acceptable for helping to pay for their “holidays.”
But it’s not only insurers in the U.K. that are taking the hit for these losses. A few years ago, NYPD got so fed up taking the time to issue police reports on obviously bogus claims, they started warning European vacationers that they would prosecute these scams. Scarce law enforcement resources should not be dedicated to help facilitate scams for unethical visitors to New York or any other city in the U.S.
Don’t know if the NYPD warning carried much weight, but thanks to tough treatment by the Brazilian justice system, vacationers from U.K. and elsewhere likely will think twice about pulling off this scam.
Nice opportunity for me to be a guest on today’s Glenn Beck show on the Fox News Channel. His agenda clearly was to show that expanding health care to millions of more Americans will increase fraud, and thus, it’s one more reason not to do it.
He did have good points about how federal health care programs attract organized crime and that the estimated percentage of fraud (he quoted three to four percent) is unacceptably high compared with credit card fraud and bank fraud.
My main point was that if the federal government doesn’t increase anti-fraud resources at least as much as the planned increase in the number of people covered, fraud will get further out of control. There’s some good anti-fraud provisions in both the Senate and House bills that have been released so far. But they fall far short of what’s needed to put a dent in health care fraud.
My favorite quote on the show came from Kerry Weems who oversaw Medicare and Medicaid programs in the Bush Administration:
“Right now we way, way, way underspend for fraud and abuse.”
Let’s hope Congress and the President get the message.
You can watch the video here.
People in Houston can earn up to $5,000 for reporting insurance fraud beginning next week. The Texas Association of SIUs has teamed up with the local Crime Stoppers organization to publicize a rewards program for providing tips about fraud schemes.
The program is scheduled to be announced in a news conference in Houston on Monday, so more details will be forthcoming. We hope this program is as successful as others around the country in encouraging honest citizens to help combat fraud.
Such programs do provide valuable leads on cases, but I think they are much more valuable in another sense. Huge roadside billboards — as well as posters, ads and tv commercials — that carry details about rewards programs serve as a reminder to would-be fraudsters about the downside in committing this crime. Knowing that a neighbor, co-worker or disgruntled ex-lover can profit by making a simple phone call is a strong deterrent.
I suspect publicizing rewards programs prevents at least as many frauds as it does in detecting them.
So, congratulations to the Texas investigators and everyone involved in the Houston program for helping to make a difference in curtailing fraud.