Consumer information
New trends, new danger
Despite the encouraging progress, insurance fraud will remain one of America’s largest and costliest crimes for years to come. Here are several trends to watch for:
Troubled economy. Insurance schemes tend to spread when America’s economy hits a downturn. People dump unwanted vehicles or torch their homes for insurance payouts. Dishonest businesses try to cheat their workers comp insurers out of premium money. Fake insurers could sell bogus health and liability coverage to small businesses.
Newer schemes are emerging. Insurance schemes are fueling two rapidly spreading schemes — illegal diversion of addictive prescription drugs, and medical identity theft.
Large fraud rings. Increasingly, organized criminal enterprises are entering insurance fraud. They know insurer payment systems well, and can loot insurers with large volumes of claims in short periods of time. Staged accident and health-fraud rings are especially active and spreading.
Aging Boomers. As millions of Baby Boomers approach retirement, seniors will remain major targets of insurance swindles. Schemes in life insurance, long term care coverage, Medicare and others likely will continue spreading. And as more Boomers come to need increased medical care, health-insurance fraud likely will continue spreading as the nation’s largest insurance crime.
Immigrants vulnerable. America’s large and growing immigrant groups are frequent fraud targets. Con artists prey on immigrants’ trust, lack of English skills and ignorance of how insurance works. Most immigrants are honest, but many also are recruited into fraud schemes themselves. Staged-accident and health-fraud rings, especially, promise quick cash payments for little effort.
Fewer federal resources. The FBI has shifted resources to anti-terrorism efforts and uncovering crime involving the nation’s financial meltdown. This has reduced federal resources for fighting rampant health-insurance fraud.
State budget crises. Passing tough state fraud laws is becoming harder because many legislatures are focusing their limited resources on solving widespread budget crises in today’s troubled economy.
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