Fraud Risk Scheme:
A policyholder or third party deliberately inflates the amount of actual damages (parts costs, labor, number of damaged items) or adds fictitious expenses to obtain higher compensation.
Detection:
- Estimates/invoices exceeding market prices or identical to other suspicious claims.
- Duplicated items or services, vague or generic repair descriptions.
- Photos showing inconsistencies between actual condition and billed repairs (e.g., unperformed repairs).
- Comparison of estimates from at least two service providers with unjustified significant differences.
- Client/service provider history showing abnormally high or frequent claims.
- Repeated modifications of invoices after initial submission.
Prevention:
- Request multiple independent estimates beyond a threshold (or implement a bidding system for costly repairs).
- Contradictory expertise or on-site verification before payment for claims above a defined threshold.
- Reference price database integrated into the system for automatic comparison.
- Verification of invoices (serial numbers, stamps, service provider correspondence).
- Hold partial payments pending document verification or physical inspection.
- Contractual sanctions in case of confirmed fraud and communication of legal consequences to policyholders and service providers.
Share your feedback:
What tools, techniques, and processes are used in your organization to detect and prevent such fraud schemes?
