Reporting insurance fraud is most likely one of the furthest things from your mind, as you go about your daily business. However, you may find yourself with a difficult choice to make if you are ever faced with the decision of whether to report a suspected fraudulent act. A consumer has the same responsibility as that of an insurance company to report fraud. It doesn’t matter whether the fraudulent behavior is committed by an individual toward a governmental insuring organization or if the fraud committed by the insurance company, itself. It must be reported.
Before lodging a complaint, you need to know who to contact and how to report what you suspect is happening.
There are many types and methods of committing insurance fraud. For instance, the homeowner who allows people to think his home was burglarized, reporting what seems to be stolen items just so he can collect on his insurance policy. Another example is the doctor who bills an insurer for products and services that were not provided. Another is a driver who stages an accident and then files claims for medical issues. There is also the worker who collects workers compensation benefits while still employed. When individuals practice fraudulent behavior, it drives up costs for the insurance company which, in turn, makes insurance premiums more expensive for everyone.
• Report fraudulent acts to the insurance fraud bureau in your state. Nearly all states have an insurance fraud bureau, whose job it is to prevent, detect, and investigate all types of insurance scams. There are a few that look into only certain types of scams, for instance auto insurance or workers compensation. No matter the type of insurance a fraud bureau investigates, however, they all encourage consumers to notify them when an insurance scam is suspected either through a telephone “hot line” or through their website.
• Contact the hotline. Each insurance company has a department in place to investigate every fraud complaint that reaches their desk. Most have special telephone numbers to call to report suspected fraud. If one is available, you are encouraged to use the fraud hotline of the insurance company. If a fraud hotline is not available, or if you are uncomfortable using that method, you might, instead, choose to write the insurance company about the fraudulent activity. Be sure to detail exactly what you witnessed, giving as much information as possible about the situation.
• Report insurance fraud by any medical personnel. If the alleged fraud has anything to do with medical issues, such as an insurance claim for conditions that didn’t exist, then you might want to contact your state medical board or chiropractic board to report your suspicions. Remember that, in every instance, insurance fraud must be immediately reported in order to protect the complainant, as well as other possible victims.
• Contact other authorities. Aside from the insurance company’s hotline and the other organizations mentioned above, there are still others who might handle insurance fraud complaints. Depending upon the seriousness of the complaint, and especially if the life of another is in danger, you might contact the police department in your town. If social security fraud is suspected, then you’ll want to contact your local social security office. The U.S. Department of Agriculture may be interested in investigating abuses within the federal crop insurance program.
• Give the full details. When reporting suspected insurance fraud, remember that you are a witness to this event. As such, you have a responsibility to report all of the important–and what may seem to be minor–details as to what you witnessed. Include the full names, the dates, the organization, the company name, and the amount of money involved. You will want to provide any documents you may have, along with any other pertinent information that you think might help with an investigation.
Remember, investigation of complaints takes time, so it may take months for the investigators to gather enough evidence to bring the perpetrators into court. The investigators need to conduct interviews and gather enough evidence for a conviction. The decision to report insurance fraud might not be an easy one for a consumer to make, but it may be worth it when the perpetrators are all brought to justice.
Joy Mali is an active finance blogger who is fond of sharing interesting financial management tips to encourage people to manage their personal finances. More specifically, she advocates that people should check their credit reports on a regular basis.