Tag Archives: Coalition Against Insurance Fraud

Casselberry Residents Being Targeted by Windshield Replacement Scammers

Casselberry, Florida residents are victims of windshield replacement scammers. As reported by News 6, a Casselberry resident recently told police that two men came to her door claiming to work for the state government, insisting that a new law had been enacted that requires Floridians to replace their windshields every six months. As a result, the residents become victims, often times being exposed to an increased risk of a cheap windshield popping out and breaking during an accident. In turn, the scammers will contact the victim’s auto insurer and submit an inflated invoice for a service that was not necessary or properly done; potentially resulting in an increase in the victim’s auto insurance premium.

An increased premium is not the only risk insureds face with these scams, according to the Coalition Against Insurance Fraud, insureds could face possible fines and, even worse, jail time. Making a repair claim for a windshield you know is undamaged could get you convicted of insurance fraud.

Red flags should go up if someone shows up at your door or chases you down in a parking lot offering to fix your windshield for free. If you believe your windshield has sustained damage and needs to be repaired or replaced, call your insurance company for a list of rebuttable windshield repair/replacement companies.

For more information regarding the windshield repair scams and what you can do to fight back, visit http://www.insurancefraud.org/scam-alerts-windshield.htm.

Click here to read full article.

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Filed under Florida, Insurance, Insurance Claims, Insurance Defense, Insurance Fraud, Uncategorized, Windshield, Windshield Damage Scam

Four Essential Ways to Prepare Insurance Data for Successful Fraud Detection

Insurers are overflowing with data, but that is only part of their challenge in being able to effectively detect fraud. In terms of information, their predicament stems more from being able to tighten the amount of data to gain access to the right information sources.

A recent report by the Coalition Against Insurance Fraud indicates that more insurers are using predictive analytics and other fraud detection technology to detect and deter fraud. The survey found that 95 percent of respondents use anti-fraud technology, an increase from 88 percent in 2012. However, difficulties in data integration and poor data quality, like spelling and transposition errors, were identified as major stumbling blocks to successfully implementing these new technologies.

According to a recent article by James Ruotolo that appeared in Information Week: Insurance and Technology, consolidating data can be tricky, but addressing data quality and integration issues up front are imperative to a successful fraud analytics model and will pay significant dividends in improved detection rates.

He recommends four key steps in preparing insurance data for fraud analytics:

  1. Integrate data silos. Core processing systems serve a specific purpose that often have nothing to do with each other or aggregated data analysis. For purposes of fraud analytics, claims, policy, application, billing, and medical data sources originating in different places need to be consolidated. Be sure to include legacy systems and other less formal “systems” like spreadsheets, watch lists, case-management applications, and shared file systems. Document the integration efforts and ensure that they are repeatable and auditable. This is critical when you enable fraud analytics scoring in production.
  2. Manage missing and erroneous data. If your systems contain Social Security numbers like 999-99-9999 or claim files with missing telephone numbers, for example, then you need to fix this information. Ignoring these errors can have a negative impact on fraud analytic results. Leading data quality tools can help identify, repair, and replace missing or erroneous data. In some cases, missing data is found in another system or can be inferred based on a combination of other sources. Also, standardizing formats for common fields like addresses will be helpful in the future.
  3. Resolve entities. Once data is aggregated from multiple systems, identify whether the same individuals, companies, or other entities exist in multiple places; for example, if one system uses name and Social Security number, while another captures name and date of birth. Entity resolution techniques can link these two records and identify them as the same individual. Best results involve more advanced analytical techniques to determine the likelihood of matching, especially if social network analytics or link analysis will be used in the fraud analytics solution. The ability to link one individual—who could have roles as an insured, claimant, witness, driver, vendor, and employee across multiple claims—is a powerful tool in detecting suspicious activity.
  4. Process unstructured text. It is estimated that up to 80 percent of insurer data is kept in text format with some of the best information captured in the loss description or claim notes fields. Managing this data can be complicated because abbreviations, acronyms, industry jargon, and misspellings are common. However, a text analytics solution containing a library of terminology specially designed for insurance data can address this issue. During this analysis, additional model variables can also be created expanding the scope of fraud analytics without having to include external data sources. Machine learning and natural-language processing techniques should be used to find and create useful variables for fraud analytic modeling.

Click on the link to read the article.

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Text Mining an Emerging Tool in Anti-Fraud Technology

Insurer use of anti-fraud technology is rising, according to a report released this month by the Coalition Against Insurance Fraud. The study reports that as of 2014 nearly all insurers (95 percent) said they use anti-fraud technology, compared to 88 percent in 2012.

Evidence that fraudulent activity is increasing bolsters the growing business need for technology-based solutions. More than half the insurers surveyed said that suspicious activity has risen over the last three years and that it flows through the entire claims cycle.

Fraud schemes today have not only increased in number, but shifted away from auto theft and more towards bodily injury and suspicious medical provider activity, according to the study. Insurers, needing to adapt to these tactical changes, are increasingly adopting advanced analytics to combat the evolving nature of fraudulent activity.

Advanced technological tools may help limit the rise in fraudulent activity, according to the report. The survey found that while 81 percent of insurers use basic technology tools, far fewer employ more advanced technology, such as link analysis (50 percent), predictive modeling (43 percent), or text mining (43 percent).

The most common challenge faced by 53 percent of insurers when considering implementing advanced anti-fraud technology is the lack of IT resources. Among other obstacles, SIU’s inability to process the large volume of potentially fraudulent claims was cited by 6 percent of insurers.

The increased presence of organized crime rings is a noteworthy development in the evolution of fraudulent activity. Text mining is one anti-fraud tool that can be utilized to expose these crime rings at the beginning of the claims process.

Text mining can connect information that is otherwise unstructured data buried in multiple, separate places, i.e., adjuster field notes, email, medical records, and police reports. By using text mining, insurers can explore this data to discover previously unknown concepts and patterns. For example, insurers use text mining to discover scripted comments in claims notes and call center logs, allowing them to notice incidences where multiple, allegedly unrelated, claimants say the same thing.

The study concludes that an anti-fraud strategy incorporating advanced technology and tools will result in a much higher fraud detection rate, thus ultimately cutting overall costs for insurers.

The report, titled “The State of Insurance Fraud Technology,” is published jointly by the Coalition Against Insurance Fraud and SAS. Click on the link to read more.

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States Propose Bills in 2014 to Combat Insurance Fraud

It’s no secret there’s a constant battle to find and prosecute people trying to get away with insurance fraud, which costs billions of dollars each year and drives up premiums for consumers.

As a result, there has been a concerted effort by several state legislatures and governing bodies to help thwart fraudsters and their crimes, according to a news release issued by auto insurance provider GEICO.

Nancy Pierce, GEICO regional vice president and vice chair of the National Insurance Crime Bureau’s (NICB) Board of Governors, said, “GEICO puts a lot of resources into investigating and stopping staged accidents, exaggerated injuries, inflated medical bills and other acts of insurance fraud that inflate costs for consumers.”

The company detects, deters and defeats insurance fraud and theft through its Special Investigation Unit.

“That said, there’s a lot that must happen in the fight against fraud at the legislative level, so it’s encouraging to see positive momentum in that direction this year,” she explained.

The Coalition Against Insurance Fraud said that six states in particular have proposed vital pieces of legislation in 2014 that would have a significant impact on deterring insurance fraud:

  • Colorado: Increasing fraud penalties to a higher-level felony is the subject of proposed legislation.
  • Maryland: Giving prosecutors greater flexibility in trial venues for fraud suspects is being supported by the state insurance administration.
  • Michigan: The creation of a state auto-fraud agency is proposed to strengthen the state’s no-fault law, identify questionable clinics and improve the fight against fraud.
  • Minnesota: A variety of new anti-fraud bills are under review by an anti-fraud task force, including greater sharing of fraud-related information between insurers and law enforcement. The imposition of civil fines in addition to criminal charges is also being considered.
  • New Jersey: Three new bills that will restrict outsider access to crash reports, expand fraud-fighters information exchange, and make it a crime for drivers to lie about where a vehicle is garaged are all under review.
  • New York: A multi-faceted anti-fraud agenda targets dishonest clinics, staged-crash networks, and fraudulent medical-equipment providers.

“While these proposals wouldn’t eliminate fraud entirely in these states, they would be significant steps in the right direction,” said Ryan West, vice president of GEICO’s claims home office. “We’re pleased that state bodies across the country are putting the fight against insurance fraud on the agenda and trying to implement changes that would result in lower premiums for consumers.”

Additional information and resources on theft and fraud awareness are available through the NICB.

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Social Marketing Effective In War Against Insurance Fraud

According to an April, 2012 report from the Coalition Against Insurance Fraud, social marketing, and directing marketing campaigns at those who commit “small crimes,” is an effective deterrent in the national insurance fraud battle.

According to the report, in Pennsylvania at least one third of fraud suspects prosecuted have no serious criminal history.  These investigations and prosecutions divert time and resources, and increase claim costs, where insurers and law enforcement agencies need every resource available to fight more serious and more organized criminal fraud rings.

The report authored by Ralph Burnham, executive director of the Pennsylvania Insurance Fraud Prevention Authority, addresses’s Pennsylvania’s insurance fraud concerns, but they are certainly applicable to Florida and other states experiencing increasing insurance fraud trends.

The full article is available here.

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