Workers’ comp claims are filed all of the time. Most are legitimate, but not all. Unfortunately, workers’ comp scams happen more frequently than you may think, and it is something to be aware of.
Some Startling Statistics
According to the FBI, “The total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year. That means Insurance Fraud costs the average U.S. family between $400 and $700 per year in the form of increased premiums.” This is significant and shows just how big of a problem fraud has become.
In terms of percentages, J. Paul Leigh, a professor of the University of California, Davis states that workers’ comp scams account for 1-2 percent of all workers’ comp payments. By these numbers, you can expect for a minimum of 1 out of every 100 claims to be fraud. Of course, this can be quite damaging if your business falls prey to something like this, so it’s important to know about three of the most common scams.
Faking an Injury
In this scenario, an employee will try to gain disability benefits by filing a claim for a faked injury. The motive is simple—get free money and time off of work for pretending to have a serious injury. You would be surprised at how far some people will take this.
A good example is a bus driver from Florida who claimed that an on-the-job accident left him with a regressive mental ailment, which gave him the mental capacity of a five-year-old. He ended up collecting a grand total of $774,000 over the course of 10 years before a private investigator discovered him driving, hunting, and playing golf, and an audiotape proved that he was faking the entire thing.
Exaggerating an Injury
Other times, it’s a bit less over the top where a worker does experience a legitimate injury but they play it up and make it look far worse than it actually is. For example, they may slip and fall at your workplace and suffer a very minor injury. However, they’ll say that it’s much more severe to the point that it’s debilitating and they’re unable to work. At which point, they’ll file a claim.
Lying About the Cause of an Injury
Yet another scenario is when a person does suffer a serious injury, but it happens somewhere else outside of your workplace. In this situation, they’ll lie and say that it happened while on the job with the hopes of getting money and benefits out of the deal.
An example was when a California-based truck driver claimed that she had spine and neck injuries. However, there was video footage that she received the injury during a rodeo event and not while on the job. She was eventually charged with perjury and was put on probation after the truth eventually surfaced.
As you can see, workers’ comp scams are a serious issue. Being aware of common types of fraud and knowing how to spot red flags should help you avoid something like this from happening at your company.