News Release

New Jersey Department of
Banking and Insurance

Commissioner Tom Considine

For Immediate Release:
October 2010

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

As we mark October as Insurance Fraud Awareness Month, I want to take this opportunity to remind consumers about the scope and impact of insurance fraud, and welcome to the Department of Banking and Insurance a new unit that will focus exclusively on insurance fraud.

According to national experts, the country loses about $80 billion a year to insurance fraud. In 2009 New Jersey alone opened about 5,683 new cases, approximately 4,500 of which were civil investigations.

Many consumers may not be aware of the prevalence of insurance fraud nor the trickle down negative impact it causes.  

Insurance fraud is the second most costly white collar crime and also one of the most often carried out crimes in the country.

Consumers should know that in addition to being wide-spread, insurance fraud also affects a wide-spread group of people: everyone.

All insurance consumers pay the price for insurance fraud. Fraudulent claims cost insurance companies money and then they need to recoup their losses through higher premiums and rates. This leads to hundreds of dollars in increases for the average household and makes us all victims.

Data shows that insurance fraud attracts a varying demographic of people from many different walks of life. You should also keep in mind that fraudulent claims aren’t just made by the consumer. Professional representatives, like doctors and lawyers, can also be culpable of insurance fraud. 

Another disturbing trend is the growing societal acceptance of fraud. Tolerance of this illegal activity by the public only perpetuates it. Fraud, regardless of how extensive it is, leads to an overall deterioration of the insurance system. 

That is why the State is increasing its efforts to identify, investigate, deter and sanction this too oft committed offense.

To that end I am very pleased to welcome the Bureau of Fraud Deterrence to DOBI. The Bureau, comprised of 90 civil investigators and staff who were previously part of the Office of the Insurance Fraud Prosecutor, officially began their duties this month.

Their transfer from the Attorney General’s Office was part of the State’s 2011 fiscal budget.

The Bureau will be responsible for investigating and enforcing civil violations of the NJ Fraud Insurance Prevention Act and our partners at the Department of Law and Public Safety will continue to investigate and prosecute criminally those who perpetrate fraud.

This separation of civil and criminal represents a common-sense reorganization that will strengthen the State’s ability to deter fraud. Housing the Bureau within DOBI will benefit all involved by creating synergies between Bureau staff and the existing insurance regulators.

At DOBI we will investigate all levels of alleged fraud, from misrepresentations on an insurance application to a complex conspiracy. However the Department is making a special effort to investigate suspicious and phony personal injury protection claims as well as questionable claims of medical services not actually provided.

Anyone who believes they have been a victim of insurance fraud or who has information about an individual or entity that may be in violation of the law should call 1-877-55-FRAUD, 1-800-446-7467 or e-mail NJInsuranceFraud@njdcj.org.