In your state, you are required to confirm you wish to access this information. Please enter 'QLD' or 'WA' in the field below to continue.

No thanks

What are fraudulent claims?

Fraudulent claims occur when a person deliberately deceives or misleads an insurer about an injury to obtain a financial benefit.

A person may make a fraudulent claim in a variety of ways. Fraudulent behaviour encompasses everything from opportunistic ‘soft’ fraud, where otherwise genuine claims are exaggerated, and premeditated ‘hard’ fraud, where claims are significantly misrepresented or simply made up altogether.

Common examples include:

  • Inflating the loss caused by an injury
  • Exaggerating the severity of an injury
  • Lying about how an injury occurred

A victimless crime?

It’s not only conventional criminals who are making fraudulent claims. As many as 8-9% of claims in Australia may be fraudulent! This means a significant number of otherwise law-abiding Australians may be committing insurance fraud, perhaps perceiving ripping off a big insurance company as a ‘victimless crime’.

In fact, in addition to the insurers themselves, insurance fraud has millions of indirect victims. The Insurance Fraud Bureau of Australia estimates that insurance fraud costs up to $2.2 billion every year and this cost is passed on to consumers and genuine claimants. For instance, insurance fraud is estimated to raise the cost of Compulsory Third Party insurance $75 per premium in NSW!

A risky proposition

Potential fraudsters should beware, as insurers are increasingly pouring resources into fraud detection. A rise in the use of surveillance makes falsifying claims an even riskier proposition.

If caught, consequences range from denial of the claim, a nasty fine or even jail time, depending on the severity and nature of the fraud.

One cautionary tale, Rita Mercuri, was handed a 16-month sentence and ordered to repay $112,187 after surveillance uncovered years of serious lies about the extent of her impairment.

When making a claim

Honest claimants can protect their payouts and stay on the right side of the law by:

  • Telling the truth – don’t fall prey to the temptation of telling a ‘little white lie’!
  • Reporting all relevant information – and if you’re not sure, ask!

Written by Shine Lawyers on . Last modified: February 21, 2017.

Join the discussion

Share this article:

There are 0 comments. Be the first!

Why insurance should be on your cyclone prep checklist

You might be surprised to know that taking photographs of your home and belongings now is just as important as ‘battening down the hatches’ before cyclone season hits. Insurance claims during cyclone season The Bureau of Meteorology is predicting up to 13 cyclones could threaten the Australian coastline this year, with at least four forming […]

Read more

Same-sex marriage: How to express your opinion without breaking the law

After the Australian High Court recently handed down its blessing for the Australian Marriage Law Postal survey to proceed, it is expected that both sides of the debate will intensify their campaigning to garner public support. With the survey being voluntary, both sides will be competing for publicity and media attention for their cause, aiming […]

Read more

Misleading and deceptive conduct explained

You might have come across the phrase ‘misleading or deceptive conduct’ before, and wondered what it meant in the legal world. The answer lies in section 18 of the Australian Consumer Law: “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” […]

Read more

Pedal to the metal – Tips for cycling to work

Do you want to start cycling to work but aren’t sure where to begin? At Shine Lawyers, we know it can be difficult to kick start a new hobby, so we’ve prepared a list of six top tips to help inspiring cyclists make a lifestyle change that really goes the distance. Ease into things If […]

Read more

Call Us Now

Our friendly consultants are available to talk Monday to Friday, 8:15am to 6:00pm AEST.

1800 618 851

Live Chat

Chat with Shine Lawyers through the livechat system without leaving your computer. No downloading, completely private and best of all - its easy to use.

Start a live chat now

Enquire Now

Enquire now