Children as young as six months are being prescribed psychiatric medication for fabricated medical reports used in fraudulent compulsory third party insurance claims.
It is just one of the dishonest methods being targeted by the NSW government's compulsory third party fraud task force.
The task force was set up to examine unusual claims patterns and possible exaggeration of injuries and medical expenses, following a 39 per cent jump in the number of CTP claims in Sydney between 2008 and 2014. It is already investigating a number of suspicious claims following tip-offs.
"Several of these tip-offs have been steered to insurance companies for thorough review and investigation," said Laurie Ratz, Insurance Fraud Bureau of Australia (IFBA) spokesperson.
"It's too early to say whether these tips will lead to charges being laid by police, but these cases are the tip of a very large iceberg."
The NSW government estimates insurance fraud in the community adds $75 to each CTP premium.
"IFBA estimates 8 to 9 per cent of all insurance claims may be fraudulent, costing Australians more than $2 billion every year," Mr Ratz said.
The aim of the task force is to make recommendations to the NSW Government on strategies to deter, detect and respond to unmeritorious and fraudulent CTP claims.
Examples of the types of fraudulent methods being used in the market include claims lodged for children (including babies), alleging severe psychiatric injuries have occurred, based on medical reports that are either insufficient or fabricated.
Such claims have seen children as young six months prescribed psychiatric medication.
Another common fraud method often follows a slow impact collision with minor vehicle damage, for which no ambulance attended and no hospital attendance followed.
Yet the claimant is assisted by a lawyer to pursue a minor injury by seeing a general practitioner with whom the lawyer has a pre-existing relationship.
Minor injury claims can be very expensive to defend and can cost an insurer up to $15,000 to investigate.
Another, yet more sinister tactic is cold calling, which often originates from overseas.
Call centres can set about randomly calling homeowners, purporting to be acting on behalf of insurers, claims services or the motor accident authority.
While the the caller may be told that no injuries were sustained, they harass and threaten the person into speaking with a lawyer to lodge a claim for compensation.
IAG Chief Executive of Australian Consumer Division, Anthony Justice said the number of suspicious CTP claims was accelerating dramatically, pointing to a 30 per cent increase in the last 12 months alone.
"CTP insurance is designed to protect motorists from the financial cost of injuring someone else on our roads, but unfortunately there are some extreme claims that are considered to be fraudulent," he said.
Members of the public are encouraged to anonymously report any suspicions they may have about CTP or other insurance claims to the IFBA Hotline on 1800 600 444 or online, where all information is vetted and passed on to insurers for investigation.
Sydney Morning Herald
