Public awareness efforts to combat fraud are fragmented and inconsistent. Numerous industry groups have mounted a variety of campaigns. Some are extensive, well-funded and well-researched, while others are relatively limited. They tend to deploy different strategies, tactics and messages, which further dilutes the overall national impact on fraud reduction.
Thus we are faced with a crazy quilt of disparate efforts whose collective impact on fraud is unclear at best, and minimal at worst. Our challenge is to bring larger scale, more consistency and bigger impact to these efforts.
Develop a unified, long-term national public awareness campaign spearheaded by a diverse alliance of insurance and non-insurance groups.
The campaign should be phased, with Phase One relatively general that sensitizes the nation about the price everyone pays for fraud. Follow-up phases will target specific fraud crimes, narrower audience segments, regions and other variables.
Phase One goals
Soft fraud: Convince consumers and borderline criminals that fraud doesn't pay.
Hard fraud: Create a national environment of intolerance that makes it impossible for serious criminals to operate. Empower consumers to avoid being victimized by scams, and to aggressively report suspected fraud to authorities.
Primary Audiences: Average consumers who commit soft fraud and borderline criminals who can be dissuaded from committing hard fraud. The campaign also will target key audience segments such as immigrants, seniors, youth and others.
Secondary Audiences: Legislators, regulators, insurance agents, various professional groups such as doctors, nurses, trial attorneys and others uniquely positioned to reduce fraud.
Messages: Messages will continually stress several clear, simple themes: insurance fraud is a crime, everyone pays a high price, getting caught has heavy consequences, and there is a strong likelihood of getting caught.
The campaign will last at least five years, with the exact length and scope of each phase to be determined. Phase One will launch broad national themes, with adjustments for state-level markets and fraud concerns.
The campaign will have a strong grassroots focus. Localized strategies can be effective because they are highly personalized and affordable. However, the campaign will retain a strong advertising component, so that strategies remain balanced.
The campaign will require a multi-million dollar annual commitment due to the high costs of big-ticket items such as advertising.
Large national insurers likely will be the primary campaign funders, though a long-term funding strategy must be developed, including support from non-insurance campaign members and other allies.
Managing the campaign will require considerable thought, involving significant questions such as whether to create a freestanding campaign hub group or work through an existing group.
Fraud trends must be continually monitored to possibly adjust campaign goals in midstream. Several of the largest trends include: seniors, immigrants, gender and consolidated financial services.
The campaign will conduct detailed research to set baseline goals, pretest campaign messages, check ongoing progress, measure changes in people's attitudes and behaviors, and determine impact on insurance fraud itself (if possible).
You have probably witnessed the growth of public awareness as a pivotal tool for affecting the outcome of almost any event, issue or cause in America today. Whether it is the battle to reduce emissions in cars, keep our kids free of drugs, keep guns in — or out of — people's hands, enforce the embargo against Cuba or debate the harvesting of old growth forests, the smartest players have lined up an aggressive team of savvy PR pros who are relentlessly chipping away at public opinion.
Public awareness can arm people with accurate facts and information, it fosters understanding and consensus, it ignites human passions, it stirs them to moral outrage when necessary, and moves people to take decisive action. Good public awareness can increase an organization's chances of long-term survival. Bad public awareness can bring you to your knees.
Many credit the awareness efforts by Mothers Against Drunk Driving with containing drunk driving by stirring up public outrage. When people died from poisoned Tylenol capsules in 1982, Johnson & Johnson's decisive recall of Tylenol was supported by a massive effort to inform the public. That outreach earned the company widespread praise as a good corporate citizen, and preserved the company's stock value from a potentially catastrophic hit.
Public awareness efforts by the Pennsylvania Insurance Fraud Prevention Authority show the impact outreach can have on fraud. After a two-year campaign in that state, the percentage of people who believe it's ok to inflate workers compensation claims dropped nearly 60 percent, and the percent of people likely to malinger after being injured fell 20 percent.
We in the fraud-fighting community are wrestling with how to mobilize public awareness campaigns to have a lasting national impact. If you spill a glass of mercury onto a table, notice how the mercury separates into dozens of beads - some beads are big some are small, some are thick and some are shallow. It's a crazy-quilt pattern that follows no set order or pattern.
This describes our fraud awareness efforts. There are numerous campaigns by companies, state alliances, regulators, fraud bureaus, associations and other groups. They all tend to be honest attempts to right a grievous wrong.
Yet these efforts often pursue diverse agendas and market goals. They often follow different strategies and use varied messages to get points across. Some are supported by excellent market research, and others follow instinct and gut reaction. Some are well-funded, others are seat of the pants. Some may have a real impact, and others will end up as sincere but little more than lip service.
Cumulatively, the result is a diluted effort whose aggregate national impact on reducing fraud is unclear at best, and minimal at worst. Public outreach can be effective only if we can define the problems our outreach campaigns are supposed to address.
But the anti-fraud community is still struggling to even define exactly what fraud problems it most needs to solve.
And what problems they are. Fraud is a big, vast and complex crime. It's a white-collar crime and a blue-collar crime. It happens in boardrooms and trailer parks. It's committed by immigrants, elderly, CEOs, career criminals, dedicated churchgoers, doctors, lawyers, nurses and anyone else you can think of.
It's also committed against them.
It's a property-casualty crime, a life insurance crime and a health insurance crime. It's a problem of right and wrong attitudes, and a problem of right and wrong behaviors. And it's a whole lot more. Knowing all this, we must decide how public awareness can have the biggest impact on fraud problems.
Even once we've decided what outreach strategies will work, we have the age-old question of resources. How do we find enough resources to do the job right? By resources we mean financial capital — money. This also means human capital — the involvement of enough committed company employees, SIU's, agents, public relations professionals and others to make our awareness programs take off. And it means political capital, convincing leadership of involved organizations to place public awareness high enough on their anti-fraud agendas that our efforts will have a fighting chance.
A related challenge is one of scale and territorial reach. Do we launch a single integrated national outreach campaign, or do we seek customized programs for each state. Or maybe a little of both. Or something else altogether.
Similarly, who should lead these public outreach efforts? Any public awareness campaign will achieve more scale and credibility by involving a diverse range of insurance and non-insurance groups that have a vested interest in stopping insurance fraud.
To make progress, the public awareness effort must talk — and also listen. Far too many consumers tolerate insurance fraud, and believe wealthy insurers won't miss a few thousand dollars here and there. We need to better understand this mindset before we can respond effectively. Until the public sees fraud as a crime that affects everyone's well-being, then we'll continue fighting an uphill battle.
One document covering one day of discussions can hardly define all of the issues, let alone solve them. But we're now out of the starting gate. Over the next five years, our leadership and vision can set the direction of our anti-fraud awareness efforts for the 21st century.
The Problem: Bad Attitudes
The discussion groups agreed our root fraud problems stem from bad attitudes. Changing unacceptable fraud behavior first involves defining and changing unacceptable attitudes toward crime, insurers, law enforcement, each other, and more. The more public awareness makes people intolerant of insurance fraud, and of those who commit fraud, the greater will be our impact on fraud reduction.
• Here are the key attitudes that public awareness must change:
• Unacceptably large numbers of normally honest consumers still tolerate
fraud, readily commit "soft" fraud themselves, and have relatively low
sympathy for insurance companies being victimized by fraud;
• The public views insurance fraud as a crime of easy money with little
risk of getting caught, or of few serious consequences if they are
• People believe they are entitled to commit fraud after paying high
premiums with no or few losses for many years;
• Too many insurers are in denial about the scope of fraud and its impact
on their bottom lines;
• People lack a strong sense of outrage over insurance fraud as a crime,
and view fraud as a victimless crime at worst;
• Consumers can prevent themselves from becoming victims (self-empowerment).
The Solution: A National Campaign
Key recommendation: Develop a unified, long-term national public awareness campaign spearheaded by a diverse alliance of insurance and non-insurance groups.
Comment: A joint national campaign can deliver the large scale, funding and consistency of message needed to reverse the lax and often destructive public attitudes that allow fraud to remain one of America's most persistent and costly crime waves.
Opportunistic (soft) fraud: Convince consumers and borderline criminals that fraud doesn't pay.
Comment: Average consumers and borderline or low-level crooks can be influenced because insurance fraud may not yet be a deeply ingrained habit or lifestyle. Public awareness thus can seriously reduce their involvement in fraud. Note: The discussion groups believe the term "soft fraud" understates the seriousness of fraud.
Hard fraud: Create a national environment of intolerance that makes it impossible for serious criminals to operate.
Comment: Most hardened fraud criminals cannot be deterred by scare tactics, or by moral appeals such as shame and guilt. So instead of trying to change their behavior, the campaign will turn society against them. By building moral outrage over fraud's high costs to society, consumers will be more vigilant... legislators will pass tougher anti-fraud laws... regulators will obtain larger fraud-fighting budgets... courts will pass stiffer sentences... insurers will redouble their internal fraud-fighting efforts.
Hard fraud: Empower consumers to avoid being victimized by scams, and to aggressively report suspected fraud to authorities.
Comment: Consumers will receive practical how-to advice on topics such as spotting fraud, asking the right questions, and how to report suspected schemes.
Initially, the campaign will primarily target general consumers who commit "soft" fraud such as lying on applications, and borderline criminals who can be dissuaded from committing "hard" fraud.
Phase One will continually stress several clear, simple and memorable messages:
• Insurance fraud is a crime (moral outrage)
• Everyone pays a high price (financial and personal costs)
• Getting caught has heavy consequences (fear and shame)
• There is a strong likelihood of getting caught (fear)
The campaign should be phased: Phase One would be relatively general, and cast a wide net aimed at the general public and borderline crooks. It would inform and even alarm the public about insurance fraud in general by continually stressing several basic and memorable themes that, cumulatively, will build an overall climate of public intolerance for fraud.
Follow-up phases will target specific fraud crimes, narrower audiences, regions and other variables. The exact duration, scope and content of each phase will depend on the results of previous phases. This strategy paper, therefore, will discuss only Phase One activity.
The campaign must be sustained. It should last at least five years, but continue as long as insurance fraud remains a serious national problem. A shorter one-shot campaign may help reduce fraud temporarily, but fraud will quickly spike once the campaign's initial impact wears off. At least three factors support a sustained effort:
Message overload. Americans face a serious information overload. We are bombarded with hundreds of messages daily. Campaign messages thus must be continually repeated for the public to recognize, remember, believe and act on them.
Entrenched attitudes. Consumers' moral indifference to fraud and antipathy toward insurers are deeply entrenched. Changing ingrained attitudes at a national level will require a sustained effort.
Educate new generations. As millions of new immigrants and young consumers become insurance buyers, we must educate them early on to have zero tolerance toward fraud while their attitudes still are formative.
Align with Allies
The core strategy team should include respected non-insurance groups, and the broader campaign should expand to even more groups whose constituents are affected by fraud — as victims or perpetrators. These allies might include advocates for consumers, doctors, lawyers, seniors, immigrants, small businesses and others. Numerous benefits accrue:
Greater credibility. The campaign will be more credible and generate greater visibility if it's driven by a large cross-section of respected advocacy groups representing diverse interests, constituents and politics.
Broader expertise. Non-insurance groups will lend astute insights into fraud-fighting strategies, especially how best to reach and influence their own constituents.
Larger Scale. We will achieve larger scale and impact when allied groups involve their own large constituencies, many of which number in the millions.
More funding. Many allies would be well-funded or have well-funded constituencies. By contributing to the campaign war chest, they would reduce the pressure on insurers to fund the entire effort.
The campaign will conduct detailed research to set baseline goals, pretest campaign messages, check ongoing progress, measure changes in people's attitudes and behaviors, and determine the campaign's impact on insurance fraud itself (if possible).
Grassroots strategies will form a large and possibly leading campaign strategy. Mass media advertising such as radio and TV ads can reinforce the grassroots efforts, but the high cost and lack of personalization make it doubtful that ads should play the lead role. When done well, grassroots is:
• Highly personal. Empowering consumers to protect themselves against fraud is most effective at the community levels. Consumers will be more receptive when we reach them in smaller, personalized settings with messages customized to their local issues and fraud concerns.
• Affordable. Grassroots programs also can be implemented at far lower cost than can mass-media advertising. Volunteers typically carry the messages into the community. Support materials such as videos and brochures can be developed at relatively low cost, yet with proper distribution they can attain continuous and widespread usage in our target communities.
The discussion groups recommended grassroots tactics such as carrying messages through community centers, senior centers, homebuyer fairs, consumer affairs councils, crime fairs and billboards. The exact mix of approaches will be determined during campaign planning.
Public awareness can have a big impact on pending state and federal anti-fraud legislation, but fighting legislative battles bears considerable risks. The discussion groups urged caution about including a legislative component to the campaign because:
Legislation may sidetrack our core strategy of general anti-fraud education, a universal goal that serves as a common ground for all strategy team members. Campaign allies also may have opposing views on bills, which could polarize team members and cause internal dissension.
Cost. A national campaign will require a multi-million dollar annual commitment in order to have a deep and lasting impact. Advertising alone will cost several million dollars, though it's doubtful the war chest will be large enough for a continuous full-scale national ad blitz. The budget also must recognize potential expenses such as advertising; PR, design and ad agencies; campaign administration; research; and costs of customizing campaign material and strategies for key states and audiences.
Funding. Large national insurers likely would be the primary campaign funders because of their size and stake in the outcome. But centralizing funding around one source is risky, so we will consider developing a long-term funding strategy that spreads funding among diverse sources that are reliable, consistent and committed year after year.
The campaign thus should explore the feasibility of additional funding sources such as federal grants, non-insurance corporations allied with the campaign, insurance department contributions, and direct mail and other mass-fundraising techniques.
Management Structure. Creating a viable management structure must be resolved before the campaign can move forward effectively. Should we create a freestanding campaign hub group, work through an existing organization, or a combination? What role does the campaign group play? Is it responsible for fundraising? Does it control the war chest? Decide which local efforts are funded? Does it create and control all campaign strategy?
Execution. The campaign overseers must determine who will execute programs. A PR agency? PR staff of campaign member organizations? A combination?