Usually when money gets tight, we tighten our belts and look for ways to cut costs, do more with less and find areas where we may be wasting money. This summer is a perfect example. Those trying to save money on travel are taking vacations closer to home and looking for new ways to enjoy their local communities. There has even been a new term bantered about to describe this trend—the staycation.

People are endlessly creative in finding beneficial ways to save. However, there are those who “find” money in other ways—by taking what doesn’t belong to them.

Recently, I was on an errand to return some items at my local Wal-Mart. Normally you are greeted at the door by a customer service representative who checks your bag, puts a yellow sticker on each item and points you in the direction of the return counter. But this time there was a new process. The representative wielded a handheld device that read the merchandise tag and spat out a slightly larger yellow sticker with the price of the item printed on it. I didn’t give it much thought, and chalked it up to added efficiency and good accounting controls. Was that the impetus for the new service? Hardly.

It seems people were bringing their returns into the store and receiving their generic yellow tags which legitimized their return. But, instead of heading directly to the returns desk, they went shopping. No, not for additional items to purchase, but for items of higher cost than their supposed return. They then would transfer the yellow sticker to the higher priced item and return it for a net cash profit.

Like Wal-Mart, the insurance industry has its fair share of fraudulent activity. And growing acceptance of unethical behavior (see In A Pickle, Insureds Attempt Drastic Measures) has exacerbated the situation. A recent consumer fraud survey, conducted by Accenture Ltd., showed that nearly one in four Americans say it’s okay to defraud insurers. About one in 10 people agree it’s okay to submit claims for items that aren’t lost or damaged, or for personal injuries that didn’t occur. The Insurance Research Council reported that more than one in three Americans say it’s okay to exaggerate insurance claims to make up for the deductible.

No wonder our Pulse Poll this quarter shows that, across the board, adjusters believe there is a high level of unprovable fraud activity. When asked “How many claims have you paid where you knew there was some element of fraud but couldn’t prove it?” an astounding 58% answered that greater than 10% of their claims contain fraud they cannot prove, and of that number 18% believed that it is greater than 35%.

In a soft market, it’s critical for insurance carriers to up their game when identifying and pursuing fraud. Use of technology and best practices have garnered considerable success for those carriers actively pursuing excellence in their fraud programs.

In this issue, we take a look at available technology, cargo theft, FACTA Red Flag rules, the policy application itself, and much more to help you step a step ahead.

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Until next time...

Bevrlee J. Lips
Publisher/Editor

To send a letter to the editor, e-mail editor@claimsadvisor.com.