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Spike in insurance fraud targeting seniors draws attention from Council of State

Carolina Journal
Council of State meeting, June 4, 2024. Source: Theresa Opeka, Carolina Journal.

THERESA OPEKA

Carolina Journal


North Carolina has seen a spike in insurance fraud since the COVID-19 pandemic, according to North Carolina Insurance Commissioner Mike Causey, who spoke about the issue at Tuesday’s Council of State meeting.


The commissioner said one of the worst forms of fraud has been online scams targeting senior citizens.


“You have some pretty clever and crafty people out there that are convincing our seniors to take money out of annuities or out of savings accounts and put them into other types of annuities or savings accounts that are promising high returns,” Causey said. “But they’re pretty shoddy products, and they’re scams, and many times when these seniors find out that they become a victim of a scam, they don’t want to report it. They don’t want their family to know because they’re too embarrassed to talk about it. So, we’re finding out after that person dies and their family finds out about it.”


One particular scam Causey described is happening in the Piedmont area of the state, involving people going door to door posing as Department of Insurance employees trying to sell insurance policies when the department doesn’t sell insurance.


There are also online medical scams as well, including medical doctors in other states writing prescriptions for North Carolina residents and sending them to “unscrupulous” pharmacists in North Carolina. Causey said most people don’t bother to look at their explanation of benefits, but most of these are listed within that document.


He also mentioned accidents that are being staged for insurance money.

“We had one person here in North Carolina taking pictures off the internet of a wrecked vehicle,” Causey said. “So this woman submitted the same picture to more than 20 insurance companies, and only two of those companies found anything suspicious and reported it to us and got our investigators looking into it. But we’re all paying for this fraud.”


According to the Coalition Against Insurance Fraud, he said, Americans are paying over $300 billion a year just to cover the known costs, or, for every dollar spent on any type of insurance, about 20 cents is going to pay for fraud. Causey then emphasized the department has a fraud hotline—888-680-7684—for anyone who suspects insurance fraud.


Secretary of State Elaine Marshall reported a record number of annual reports, 572,211, have been processed so far this year, an increase of more than 2,000 from 2023. Reports in total have increased 55% over the past five years. She said her department anticipates that between 170,000 and 175,000 — or between 650 and 700 a day — new businesses will be created by the end of the year.

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