FWC Logo_white

Freedom Day and Insurance Fraud: The Importance of Reporting Fraud to Protect Our Freedom

Apr 20, 2023
  1. Home
  2. Blog
  3. Freedom Day and Insurance Fraud: The Importance of Reporting Fraud to Protect Our Freedom

Freedom Day is a day to celebrate our hard-fought liberties and the rights that we enjoy as citizens of a free country. But did you know that insurance fraud can threaten our freedom? Insurance fraud is a serious crime that costs billions of dollars each year, and it affects not just the insurance industry, but all of us. Whether it’s padding claims, misrepresenting facts, or staging accidents, insurance fraud is a deliberate deception committed for financial gain, and it hurts us all.

The sad truth is that insurance fraud is more common than we think, and it can take many forms. From organized criminals to everyday people looking to make a quick buck, insurance fraud can be committed by anyone. And it’s not just the insurance industry that suffers, as insurance fraud can also impact our economy, our healthcare system, and our overall quality of life. That’s why reporting insurance fraud is crucial to protecting our freedom. By reporting fraud, we can hold those who commit these crimes accountable and ensure that our rights and freedoms are protected. In this blog post, we’ll explore the importance of reporting insurance fraud and how it can help safeguard our freedom.

Before we discuss the importance of reporting insurance fraud let us first unpack the types of fraud complaint that are reported on a daily basis.

Fraudsters are constantly evolving their methods, using social engineering to manipulate customers into sharing confidential information or parting with their cash. Many customers have expressed that they don’t even know how the fraudster obtained their personal details. The most common complaints, include, claims fraud, death fraud, application fraud, inflated claims, disaster fraud schemes, and insurance company fraud.


Claims Fraud & Inflated Claims

Essentially, claims fraud is when someone who has an insurance policy makes a claim for an event that never happened or that they staged themselves. For instance, they might pretend to slip and fall, or intentionally damage their own property just to receive a pay out. Fraudsters tend to opt for this type of fraud because the potential pay outs can be high, and it can be difficult to prove that the incident didn’t occur. Another way that people commit claims fraud is through inflated claims, where they sign a claim form, knowing that the repair work was never actually done. In other cases, the person making the claim might not even be aware that the work was never performed. Disaster insurance claims are often easier to inflate, for instance, if a roofer bills for higher-quality materials but uses sub-par ones instead.


Death Fraud

Death fraud is when a policyholder fakes their death to receive a life insurance pay out. It may seem like something out of a book or movie, but it does happen in real life. Conversely, a beneficiary may try to murder the policyholder to get the entire pay out, but this is rare.


Application Fraud & Disaster Fraud Schemes

So, you know how when you’re applying for life insurance, you have to fill out a bunch of forms with your personal information? Well, sometimes people don’t exactly tell the truth on those forms. They might say they’re a non-smoker when they actually smoke, or they might exaggerate their good health to try to get a lower rate on their policy. That’s what we call application fraud. ¬†Similarly, there are people out there who will try to take advantage of a bad situation for their own financial gain. They might try to file a claim for a house that wasn’t actually damaged, or they might say that their damage was caused by a flood when it was really caused by something else. Some others might even set up fake charities to steal money that’s meant for disaster relief. It’s really important to be on the lookout for this kind of fraud, and to report it and ensure that those in need receive the help they deserve.


Insurance Company Fraud

And finally, sometimes, the insurance companies themselves can be the ones trying to pull a fast one on their customers. They might sell fake policies or try to get you to buy coverage that you don’t actually need. And sometimes, they might even take your money for premiums and then disappear without giving you any coverage at all. It’s not cool.

Another shady thing that insurance companies sometimes do is try to push a product on you in a really deceptive way. They might make it seem like you’re getting a great deal, when really, you’re signing up for something that’s not right for you at all. So, it’s always a good idea to be on the lookout for these kinds of scams and to make sure you’re dealing with a reputable insurance company that you can trust.


How to Report a Fraud

Reporting insurance fraud has never been easier. All you have to do is use the toll-free Insurance Fraudline, which was set up by the South African Insurance Association and is managed by Deloitte. The Fraudline allows anyone who wants to report fraudulent behaviour in the insurance industry to do so by calling an independent call centre, sending a fax or email, or submitting a query, complaint, or fraud report through the Fraudline website. And if you’re worried about your identity being exposed, don’t be! The Fraudline ensures the utmost confidentiality of the person reporting the fraud, so you can remain anonymous if you choose to.

The Fraudline is funded by The Insurance Crime Bureau member companies, which covers matters concerning the short-term insurance industry, as well as the life and broker industries. It has been proven to be a successful weapon in the fight against syndicated insurance fraud and crime, leading to cases and successful investigations.

So, if you ever come across fraudulent behaviour in the insurance industry, don’t hesitate to use the Insurance Fraudline to report it safely and anonymously. It’s an important tool in the fight against insurance fraud and helps to keep everyone honest and above board.