Tag Archives: fraudulent claims

More on fraudulent claims after an incident

I posted about the problem of dealing with fraudulent claims after something goes wrong. A crisisblogger reader submitted this comment which I agreed to keep anonymous.

While I have nothing to dispute the ratio of spurious to genuine claims you talk about, I would agree that after any event thr are spurious claims – and those spurious claims have a disproportionate impact. For example they are the ones people hear about and so tar all with the same brush unless they are obviously genuine. Sadly that breeds a degree of skepticism amongst people. Something that shocked me when I held a small fund raiser for victims of an industrial tragedy were the  number of folks who said they were unsympathetic despite the horror of the event because a bunch of people were going to be made very rich from it. Years later, as the litigation dragged on , one local person was quoted in a newspaper article saying their neighbors had made claims and got money – ” heck, so I put in a claim too for the sake of my kids..” It showed that some have no scruples and it only confirms what people thought would happen.  As jurors at legal trials are ordinary people, then they will likely share the same skepticism when they have to adjudicate on whether a claim against a corporation is genuine or not, meaning genuine claims risk not being properly compensated. That is in noone’s interest.
It’s easy for the lawyers to get blamed for this, but they are far from all the blame.
In short, you’re experience is borne out by what I have seen, but it may only be a handful that cause the problem. And are the courts the best place for these issues to be addressed? Perhaps forced adjudication is part of the answer. “

Dealing with fraud after an incident

It’s a sad commentary on our world that when a few have been hurt by mistakes and have received generous compensation for their troubles from a responsible company, that a whole lot of morality-challenged folks decide to try and take advantage of the generosity by making false claims of injury. I experienced this a number of years ago in dealing with a large-scale event involving fatalities. There were people who came forward with all kinds of ludicrous claims of emotional distress, false claims of property damage and the like. The worse was when one of the employees in the emergency management office–an employee hired to help deal with crisis events–sued the company because of emotional damage from having to respond.

A recent event illustrates the point. A few people were affected and the company was clear about the process of making a claim and how to be compensated. Then the false claims start coming in. One of the problems is the media coverage. The media interest is heightened because real people have been hurt by real mistakes. The automatic assumption is that anyone else who makes claims are indeed victims–and the story goes on instead of ending in a few hours or days. That makes it tricky for companies to deal with the fraudulent claims. These same people with the moral sense of a toadstool but who are savvy enough to know what leverage they have with the heightened media interest, will certainly not be above screaming loudly to the press that the company wasn’t keeping its promises about compensation, the company is just playing a PR game, the company says one thing and does another, they were treated rudely, they are having to sue, etc., etc.

What to do? As this company is doing. Carefully investigate all claims. Communicate continually that the company will promptly and quickly compensate all those who have been impacted. That’s all good, but I do think you have to be able to go one step further. If the phony victims leverage their media opportunities, the company has to be willing to state that fraudulent claims are common in these situations, the company investigates each claim carefully to both make certain that fully and complete compensation is made to thereal victims but those unscrupulous few who seek to take advantage of the situation will not be compensated.

By the way, based on my experience, depending on the situation you might expect to deal with twice as many fraudulent claims as real ones. I’d love to hear from others on this–does your experience correspond?