Fraud News Weekly

Get the latest fraud news and trends each Friday — free of charge. You'll receive exclusive insider updates:

• Fraud cases & trends around the U.S.

• Legislation & regulations

• Court decisions & lawsuits

• Educating consumers

• Meetings, seminars & conferences

• New fraud data, much more

Click here to sign up

Fraud News Weekly sample

Friday, March 29, 2019

* Virginia is for lovers … of fraud fighting. Three new laws just went on the books. Vehicle fraud cases will get a boost with more data to work with, and public adjusters must better toe the line.

H 2344 authorizes the release of motor vehicle and driver registration info to insurers and anti-fraud organizations. Registration info includes owner name and address, descriptive vehicle data and title, registration, vehicle activity data and driver-license info. This data will be useful for investigations and building better database records.

VA 1415 ensures public adjusters are properly licensed. Also forbids unlicensed persons to solicit an insured to handle a claim. Only a licensed public adjuster can handle a claim for an insured, including negotiating the claim settlement.

VA 1222 requires fingerprinting and federal background checks for anyone seeking a public adjuster’s license. Adjuster licenses also must be renewed every 2 years, and continuing ed is required.

Note: Texts of anti-fraud bills are available on the Coalition’s website here.

* “We live in a cluttered world. People are bombarded with ads and other messages every day. If we want our fraud messages to get through to consumers, we have to talk louder than all the noise. That means sometimes being blunt, edgy, even rude,” says Tom Donahue about the consumer videos he places statewide for the Pennsylvania Insurance Fraud Prevention Authority. Read more about Weasy the fraud weasel, and videos that call fraudsters “liars,” “idiots” and “cheaters.” Tom tells all in the the Coalition’s specialty newsletter, Outreach!.

Visit to read articles citing the Coalition.

* Stephanie Pepper Snider filed a $10,617 claim with State Farm for a 2-carat diamond ring she said she lost the day before. The Renton, Wash. woman filed a claim with Allstate for the same ring nearly a year later. Someone stole it from her apartment, she said. Allstate questioned Snider about the State Farm claim. Snider said she wasn’t aware of that claim or payment. Allstate denied her claim and referred the case to the Washington insurance department. Snider’s former fiancé showed investigators the ring, receipt, diamond certificate and a photo of Snider wearing the ring after State Farm paid her claim. The guy said he didn’t know about the State Farm claim. Snider pled guilty. She received 240 hours of community service and must repay State Farm.

* Struggling addicts were exploited to steal more than $100 million of insurance money for fraudulent drug testing and sober-home billings in the Philadelphia area, the state AG charges. As alleged: Liberation Way provided inpatient rehab without a license, and housed addicts at allied sober homes. Liberation Way was only licensed for outpatient treatment. But the firm used shuttles to run addicts back and forth from its sober homes to the treatment centers each day. One was known as a “party house” because drug use went on there. Liberation Way employees also had sex with addicts. Many addicts were destined to keep relapsing so they could be abused with fraudulent and overpriced tests and rehab. Some addicts returned to Liberation Way for 6 or more rounds of treatment, even though they relapsed after each round. A patient’s insurance billings could exceed $4,500 a day. Docs also ordered urine tests without seeing patients. Florida testing labs paid millions in kickbacks for the samples, which were fraudulently billed to insurers. Eleven people were arrested.

* Written consent of all policyholders should be required for an insurance claim to be assigned over to a home-repair contractor or other third party, the Coalition contends in an amicus brief filed with the Florida Supreme Court this week. “It is inescapable that each individual consumer policyholder has every right to require their written consent to be obtained before their very right to control the proceeds is signed away,” the Coalition argues in Restoration 1 v. Ark Royal Insurance Company. “A contractual insurance policy provision requiring written consent of each insured furthers and ensures the consumer’s interests are protected.”

* A federal court yesterday struck down the Administration’s group health plans as an illegal attempt to avoid vital consumer protections of the ACA. Expanded Association Health Plans are a centerpiece of the Administration’s healthcare strategy — and a clear road to fraud, the Coalition has repeatedly argued. AHPs let loose groupings of workers sign up for AHPs. They can have little in common beyond a desire to offer an inexpensive health plan. Nor must AHPs meet stringent consumer protections of the ACA. “The final rule is clearly an end-run around the ACA,” the U.S. District Court Court judge wrote. Nearly a dozen state AGs challenged Trump’s executive order in a suit last year. AHPs are an open invitation to scams and should have strict anti-fraud protections, the Coalition told the White House and U.S. Department of Labor last year. Scammers set up fake health plans that stuck hundreds of thousands of consumers with unpaid medical bills back in the early 2000s. The fraudsters created bogus association group plans that seemed legitimate. Yet they were unlicensed shells that refused to pay valid medical bills. Scammers can easily set up similar ruses as fake AHPs today, the Coalition warns. Potential for fraud also was a key concern in the state AG’s lawsuit. The federal judge didn’t reference fraud yesterday. Yet his repeated concerns about lax consumer protections under AHPs fortify the Coalition’s concerns about the need for stricter standards to avoid a repeat of widespread scam health plans.

* Traditional anti-fraud technology tools are giving way to advanced analytics as insurance fraud rises, insurers say in a new study of insurtech trends. The biennial study was conducted by the Coalition, assisted by the analytics firm SAS. Some 84 insurers took part. Fraud has risen over the last 3 years, about 2/3 of insurers say in The State of Insurance Fraud Technology, with infographic. Insurers thus plan to retool their anti-fraud arsenals with a mix of advanced analytics over the next 2 years:

• Predictive analytics tops the list. Some 64 percent of insurers say they’ll earmark funds for predictive tools. That’s a 45-point spike from 2016, when just 19 percent planned to invest.

• Planned investment in link and social-media analysis also has grown rapidly, say 43 percent of insurers vs. only 16 percent in 2016.

• New on the list: 1 in 5 insurers (21 percent) plan to invest in AI in the next 12-24 months.

“Technology is rapidly entering a new era of higher IQ and ability to meet fraud threats that are growing in scale and complexity,” says Dennis Jay, executive director of the Coalition.

F A C E S   O F    F R A U D

Manolo Carrillo
Pasco, WA
Homeowner claims
Warren Davis
Baton Rogue, LA
Auto staged
Amanda Kulka
Sumner County, KY
Joey Ocasio
Orange County, NY
Worker comp
Devonta Waddy
Columbus, OH
Auto claims

Click on image for more information.

O T H E R   H E A D L I N E S

* 3 Louisiana women arrested, accused of staging 2017 crash
* People needing treatment are falling victim to predatory rehab recruiters
* ‘Cash-for-crash’ scammer deliberately runs and jumps in front of oncoming car


April 17-19  30th Annual Anti-Fraud Conference
Monterey, CA (Anti-Fraud Alliance)

April 23-24  PA 2019 Insurance Fraud Conference
Hershey, PA (IFPA)

May 2-3  Insurance AI and Analytics USA 2019
Chicago, IL (Insurance Nexus)

June 3-4  — Coalition Midyear Membership Meeting
Orlando, FL (Coalition Against Insurance Fraud)

June 5-7  2019 FIFEC Conference
Orlando, FL (FIFEC)

September 8-11  IASIU 2019 Conference
Phoenix, AZ (IASIU)

October 15-16 — 2019 Idaho Fraud Conference
Boise, ID (Idaho Department of Insurance)

November 7-8  CLM Southeast Conference
Atlanta, GA (CLM)