Tag Archives: Fraud Prevention

by | December 18, 2012 · 7:40 am

Hospitality Industry Insurance Risks: Workers' Comp Insurance Fraud Costs Businesses $7.2 Billion Annually

In 2007 State Fund discovered Safehome Inc. was under reporting their employee payroll to avoid paying the proper premium. An audit was completed and indicated that Safehome Inc. had failed to pay the proper workers compensation insurancepremiums for their workers’ compensation policy in the amount of $477,285. Additionally, State Fund determined the business was operating out of its classification, and related payroll was never reported to either State Fund or EDD, according to investigators.

“…the three types of most common workers’ comp fraud – injured worker fraud, provider fraud and premium fraud – haven’t changed much…”

Workers’ compensation fraud costs businesses $7.2 billion annually, roughly a fifth of all workers’ compensation payments, according to the National Insurance Crime Bureau.

In the past, it’s been challenging to prosecute workers’ compensation fraud, but recently passed legislation is making it easier for agencies like State Fund to work together to fight fraud. In June, as a result of a joint task force that included State Fund, more than 100 enforcement actions were taken against companies for failure to comply with state contracting, insurance and payroll requirements.

And earlier this year, State Fund partnered with other agencies on a fraud case that resulted in a conviction with restitution orders to both State Fund and the Employment Development Department.

For more:  http://www.insurancejournal.com/news/west/2012/12/12/273777.htm

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by | December 21, 2010 · 5:23 pm

Hospitality Industry Information Security Risk: Study Finds Indentity Fraud Increased by 12% In 2009 To $54 Billion

Javelin Strategy & Research, a group that does studies on identity theft and fraud, released its 2010 Identity Fraud Survey Report toward the beginning of the year. It found that the top two types of personal identification being compromised in a data breach were:
  • Victim’s full name (63%)
  • Physical address (37 percent).
  • Social Security numbers being compromised in data breaches decreased from 38 percent in 2008 to 32 percent in 2009.

It also reported that the number of identity fraud victims in the United States had increased by 12 percent to 11.1 million adults in 2009, the annual fraud amount increased by 12.5 percent to $54 billion.

But the study also found that an increasing number of consumers are fighting back against identity theft and taking necessary precautions to preserve their personal information.

The average fraud resolution time dropped 30 percent to 21 hours, and nearly half of all victims were reported to have filed police reports that ended up doubling the reported arrests, tripling the prosecutions, and doubling the percentage of convictions in 2009.

“The 2010 Identity Fraud Survey Report shows that fraud increased for the second straight year and is at the highest rate since Javelin began this report in 2003,” said James Van Dyke, president and founder of Javelin Strategy & Research.

“The good news is consumers are getting more aggressive in monitoring, detecting and preventing fraud with the help of technology and partnerships with financial institutions, government agencies and resolution services.”

Javelin researchers believe the increase in fraud is due in part to the economic downturn, when historically fraud increases.

Robert Siciliano, a researcher with McAfee Inc., identified the top 10 riskiest places for people to lose their Social Security numbers, with colleges and universities coming in at number one. Banking and financial institutions were second and hospitals were third.

According to identitytheftlabs.com, younger adults and small business owners tend to be the victims of identity theft because they often engage in “risky activities” that can lead to them being victimized more frequently.

Read more: The Daily Home – Fight back against identity theft

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by | March 26, 2010 · 6:06 am

Workers’ Comp Fraud Prevention: State Of Colorado Amends Bill That Would Restrict Video Surveillance That Is Deemed “Intrusive Or Harassing”

The original intent of the bill was to restrict workers’ comp insurers’ use of video surveillance to only cases where the insurer has a reasonable basis to suspect fraud. It also would have imposed a significant fine on insurers that violated the rule. However, the legislation was amended after lawmakers raised concerns that it would seriously hinder insurers’ efforts to prevent fraud.

The amended version prohibits evidence from being introduced at workers’ comp administrative hearings if it is deemed that the surveillance was intrusive, intimidating or harassing. In addition, the evidence would not be permitted if the administrative law judge finds that the investigator, if questioned, misrepresented himself to the claimant and did not disclose on whose behalf he was conducting the surveillance. The legislation would also require insurers to present the surveillance videos to the claimant’s treating physician for review.

http://www.riskandinsurance.com/story.jsp?storyId=375682191

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