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The Fraud That Never Happens

Fraud deterrence and the critical work of CSRs

May 18, 2021 Photo

When combating insurance fraud, there are three watchwords to keep in mind: detect, deter, and refer. You detect fraud to deter perpetrators, and refer all suspicious activity to your special investigation unit.

Two of these elements—detection and referral—take up the most time during fraud training. Fraud detection is the focal point during discussions about fraud indicators—or “red flags”—because fraud can be addressed and stopped once it is recognized. Fraud referral is also a mainstay of fraud training because reporting known or suspected insurance fraud is mandatory in most states.

Deterrence, meanwhile, can get lost in the shuffle. It’s easy to skip over that one because deterred fraud is the fraud that never actually happens.

When it comes to deterrence, customer service representatives (CSRs) play a key role. While CSRs aren’t the only insurance company employees who can deter fraud, their unique relationship with claimants as the connecting point and voice of the insurance company affords them a greater opportunity for fraud deterrence. In today’s pandemic parlance, CSRs are essential workers on the front line in the fight against insurance fraud.

Since CSRs are front-line employees, their annual training on detecting red flags and emerging fraud trends is vital. Such training allows CSRs to cultivate a thorough knowledge of fraud detection, which will help prevent fraud from getting through the door. 

For CSRs, deterrence and exceptional customer service go hand-in-hand. Honest claimants with legitimate claims appreciate CSRs who take time to answer their questions, provide policy and benefit information, and go over documents with them. Those intent on fraud do not. These criminals do not want to be caught, so they tend to follow the path of least resistance as they take advantage of opportunities that present themselves. Someone attempting to commit fraud may simply walk away and never submit a false claim when the CSR asks questions to better understand the claim, or requests clarification of a claimant’s inconsistent statements, or repeats questions that the claimant is choosing not to answer.   

Detect and Deter

CSRs have a challenging job. Each day, they speak to many claimants about a variety of topics, and they may hold these conversations without the benefit of having documentation to review. CSRs must possess a vast knowledge of policy and claim-processing information to address a plethora of claimant needs. Each call brings with it an opportunity for a CSR to help an honest claimant or to speak with a potential criminal, and the CSR never knows whose call will be next in the queue. 

Fortunately, most of the calls CSRs receive are from claimants who need claim-filing assistance, payment information, guidance regarding access to online company resources, and answers to policy questions. These claimants are not perpetrating fraud or even considering fraud as an option. They simply want their claims to be processed quickly and accurately and to have all their questions answered clearly and correctly during each call they have with their insurance company.

Calls from those attempting to commit fraud can be challenging because, even though fraud is an anomaly, it doesn’t always stand out amongst the many calls from honest claimants. However, fraud that is not apparent can still be detected by listening carefully and paying close attention to a claimant’s comments. Take notice if you encounter any of the following red flags during a call with a claimant. The CSR’s responses in these scenarios reflect deterrence wrapped within excellent customer service.  

•    When asked about claim documents, medical treatment, work or activity status, other income sources, or any other information which could affect benefit payments, the claimant doesn’t answer, gives a partial answer, or changes the subject.

The CSR who repeats the questions after recognizing the claimant’s lack of a complete response ensures the claimant heard all the questions and had an opportunity to provide the requested information during the call. At the same time, the CSR demonstrates both the necessity of the requested information and the attention paid to the claimant’s response. 

•    The claimant provides incomplete or contradictory statements to questions or gives a tangential or unexpected answer to a question that ought to prompt a “yes” or “no” response.

By reiterating the answers given by the claimant, the CSR prevents a possible misunderstanding by confirming the claimant’s responses, allows for accurate and clear documentation of the call, and demonstrates the attention given to the responses provided by the claimant.     

•     The claimant calls several times throughout the same day, repeating questions or requests during each call and referencing previous CSR responses to each CSR who answers the claimant’s subsequent calls.

When each CSR who takes a call from the claimant reviews the prior call notes, the CSR confirms that the information given to the claimant during each call was complete, accurate, and based on policy provisions or claim-processing procedures. The CSR can then reiterate the accurate information to the claimant, providing additional clarification of any issues that may have been confusing to the claimant during prior calls. Handling of such calls in this manner ensures the claimant has all necessary information and demonstrates that all CSRs who talk to the claimant are well-trained and fully conversant with policy provisions and claim-processing procedures, and that they provide accurate, consistent information during every call. 

Time to Refer

A CSR who has detected potential fraud during a call with a claimant needs to submit a referral to the special investigation unit, even if the CSR’s excellent customer service may have deterred the claimant from submitting a fraudulent claim. Referrals of suspicious or questionable activity that may be fraudulent must include clear, impartial, and succinct documentation of all red flags detected during the call.  

CSRs who provide consistently excellent customer service move fraud deterrence out from “the middle” between detection and referral. The combination of detection, referral, and deterrence becomes a powerful fraud trifecta that can help stop criminals from harming honest claimants and insurance companies.

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About The Authors
Tami Bayless

Tami Bayless, HCAFA, is special investigator II at American Fidelity Assurance Co.  tami.bayless@americanfidelity.com

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CLM’s Insurance Fraud Committee identifies, analyzes, and offers education on emerging fraud schemes and tactics; monitors and reports on developments in case law, state fraud statutes and applicable regulations; collaborates with other anti-fraud industry organizations and associations; and seeks to provide amicus support in matters of importance in the fight against insurance fraud.

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