How The development of street-level insurance scams into organized affairs in Australia

Car insurance fraud has probably been present in Australia since car insurance first became mandated, but until recently, it had always just been something individual people without scruples were willing to attempt. However, in recent years, it has become something of an organized crime effort, and Australian car insurance providers are starting to have to take notice. That said, there are a number of hindrances that make this kind of organized car insurance fraud more difficult to tackle than simply rounding up suspected fraudsters when they are discovered and charging them.

How car insurance fraud occurs

While the details will naturally differ from one case to the next, a typical start to the organized car insurance scheme is outlined below:

* Primary fraudster approaches recruits about staging a car accident
* Recruits agree and at a predetermined date and time stage accident
* Each recruit files claims for damages related to treatment injuries after accident

Essentially, this had been occurring on a much smaller level for quite some time. However, the large scale operations currently being discovered around the Australian continent suggest the criminals have decided to work together and start up entire systems dedicated to fooling the car insurance industry. Investigations into some of these cases have revealed individual rings that set up at least 50 fake car accidents and subsequently filed dozens of millions of dollars in claims for injuries that never even happened.

Evidence of its organized nature

Beyond the egregiousness of staging fake accidents and filing fake claims, organized car insurance fraudsters in Australia have even begun to set up fake clinics and rehabilitation centers where they have their recruits submit injury claims. The injuries, of course, did not occur, and the treatments that they were ordered to have never actually took place.

Federal investigators and law enforcement authorities have pointed to the establishments of these fake rehab clinics as clear proof that the efforts to fool the car insurance industry are occurring with a high degree of organization. These aren't simple criminals who are interested in making a quick dollar; the efforts are sustained, clearly planned out, and meant to continue over a long period of time.

Difficulties targeting the problem

As the car insurance industry and federal government in Australia becomes increasingly aware of the rising tide of big time car insurance fraud, the natural response is to crack down on these fraudsters and bring them to justice. However, this is increasingly shown to be easier said than done for a number of reasons. First of all, there is not nearly enough oversight of the car insurance industry or of what happens when suspected claims are discovered by individual insurance companies.

There is also a great deal of secrecy between car insurance companies that are reluctant to share information with each other and with the government regarding how often they are being taken for a ride by scammers and fraudsters. In addition, there is a strong need for more legal support and investigative personnel to look into suspected and actual cases in order to discover how deeply underground and organized these crime rings are. All of these difficulties and hindrances to communication are making what is already a growing problem even more difficult to get a handle on and stop.

Fraud in other countries

Auto insurance fraud, of course, is not limited to the Australian continent. One hemisphere away, the United States had its own dealings with organized crime in car insurance fraud for a number of years but recently gained success in cracking down on the criminals with more throughout investigative proceedings and law enforcement follow through. Australia, however, has so far not been able to bring many of these people to justice, which means the rates of fraud are only likely to increase.