Forensic Psychology

Profiling Fraud

Fraud happens when someone lies or uses deception to obtain financial advantage or cause loss. It is a crime of acquisition that costs Australia an estimated $6 billion per year (Australian Institute of Criminology, Nov 2017). The debt is settled by a significant component of today’s insurance premiums paid by individual honest policyholders. Furthermore, since insurance fraud is difficult to prove and often undetected, illegitimate claims are thus paid by an insurer which reduce the funds available to pay the legitimate claims of those honest policyholders. According to KPMG (2012), it was estimated that only one-third of insurance fraud is detected by businesses in Australia.

When individuals see nothing wrong with defrauding an insurance company, often expressing the view that it is a victim-less crime, it ultimately costs everybody who takes out insurance and potentially involves at least a 2.5 times greater loss to the country than the combined cost of burglary, theft and robbery of individuals (like it did in the UK in 2010).

The Insurance Fraud Bureau of Australia (IFBA) and Australian insurers don’t think that honest customers should be paying for fraud. Neither do we.