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Insurers believe fraud beyond police

INSURANCE fraud is on the rise in WA and many in the industry believe law enforcement agencies are not doing enough about it, according to a recent Phillips Fox survey.

The survey of senior executives in WA’s insurance industry found most respondents believed insurance fraud would continue to escalate because of low deterrent levels and poor law enforcement.

Phillips Fox partner Geoff Bourhill said the survey confirmed anecdotal industry evidence that fraud in household, motor vehicle and workers’ compensation insurance were on the increase.

“Our survey found the industry believed advertising of detection programs and publicity for fraud prosecution would be enormously helpful in arresting the growth of fraud,” Mr Bourhill said.

“The direct effect of insurance fraud is an increase in insurance premiums.

“The clear message from the industry in WA is the community generally does not view insurance fraud as a serious matter mostly because the perpetrators believe they can get away with it. And mostly they do.”

WA Police Service commercial crime division acting detective superintendent Peter Lavender said the survey incorrectly depicted WA police as sitting on their hands.

“Where there is an element of criminality, we take up and investigate 100 per cent of reported cases,” Supt Lavender said.

“You wouldn’t get a better investigation brief from any other commercial crime unit in the whole of Australia.”

SGIO Insurance national manager of investigations Sabine Taylor said the company had an excellent working relationship with the WA Police Fraud Squad.

“We find that if we believe that a fraud has occurred and we have sufficient evidence to support those allegations, they do indeed act,” Ms Taylor said.

“They may not act immediately but they do actively investigate each allegation on our behalf.

“We understand that when they have a backlog, their priorities are primarily not insurance. Society demands that police action rape, homicide and other crimes on the person.

“While insurance fraud is not top priority, it is far from being ignored.”

Other points to emerge from the survey were:

l Some insurers noted the emergence of organised fraud

l Many insurers don’t refer fraud to the police because they believe most matters will not be prosecuted

l Technology has made it easier for fraudsters to falsify documents, particularly from overseas

l Many insurers believe the rise of electronic commerce is creating a fertile breeding ground for insurance fraud

l Insurers generally feel the police should be better resourced to tackle fraud and be more responsive to complaints, even where a civil remedy is available.

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