Insurance Fraud Division Crackdown
Did you have any idea that the average American household pays $1,030 per year in out-of-pocket costs as a result of insurance fraud? As reported by the S.C. Attorney General’s Insurance Fraud Division, if insurance fraud were a business, it would be a Fortune 500 company!
A new report issued by the South Carolina Attorney General’s Insurance Fraud Division shows a whopping 44% increase in insurance fraud convictions in 2008, confirming 135 convictions for insurance fraud in 2008, a jump from 94 convictions in 2007. The number of complaints rose from 712 in 2007 to 815 complaints in 2008.
The breakdown of the claims filed in 2008 was:
Automobile claims 57%
Personal/Commercial Property 12%
Worker’s Compensation 11%
Life Insurance 3%
South Carolina Attorney General’s Insurance Fraud Division report
Interested in what the Department of Insurance and the Attorney General are seeing?
Seven of the most common types of insurance fraud are:
• Underreporting the number of miles you drive on your auto policy.
• Failing to report an accurate medical history when applying for health insurance.
• Faking or exaggerating injuries to avoid work and draw workers’ compensation benefits.
• Falsifying or overstating an injury sustained in a car accident — or even faking the accident — to achieve a large settlement or award.
• Staging an automobile accident that results in an inflated injury claim.
• Drawing accident and health insurance benefits because of exaggerated or even fabricated injuries or illness.
• Exaggerating the amount and value of items stolen from a home or business.
In an attempt to cut down on fraud, South Carolina has a mandatory reporting act that states, “any person, insurer or authorized agency having reason to believe that another has made a false statement or misrepresentation or has knowledge of a suspected false statement or misrepresentation shall, for the purpose of reporting and investigation, notify the Insurance Fraud Division of the Office of the Attorney General of the knowledge or belief and provide any additional information within his possession relative thereto.”
SECTION 16-13-220. Embezzlement of public funds; presumption on proof of failure to account for receipts.
In trials under Section 16-13-210, upon production of evidence tending to prove that any such officer or other person has received public funds and failed to account for the funds as required by law, it is permissible to infer that the funds received and unaccounted for have been fraudulently appropriated by the officer or person.
SECTION 16-13-230. Breach of trust with fraudulent intent.
(A) A person committing a breach of trust with a fraudulent intention or a person who hires or counsels another person to commit a breach of trust with a fraudulent intention is guilty of larceny.
(B) A person who violates the provisions of this section is guilty of a:
(1) misdemeanor triable in magistrates court or municipal court, notwithstanding the provisions of Sections 22-3-540, 22-3-545, 22-3-550, and 14-25-65, if the amount is two thousand dollars or less. Upon conviction, the person must be fined not more than one thousand dollars, or imprisoned not more than thirty days;
(2) felony and, upon conviction, must be fined in the discretion of the court or imprisoned not more than five years if the amount is more than two thousand dollars but less than ten thousand dollars;
(3) felony and, upon conviction, must be fined in the discretion of the court or imprisoned not more than ten years if the amount is ten thousand dollars or more.
A hotline has been established by the Attorney General’s office to report allegations of fraud: 1-888-95-FRAUD