CTP fraud
Fraudulent and exaggerated claims have been estimated to add up to $75 to the cost of each Green Slip.
In August 2016 SIRA, NSW Government agencies, and the legal, health and insurance sectors, formed a taskforce with the NSW Police (Strike Force Ravens/Mercury) to reduce fraud in the CTP scheme.
Following publicity about arrests by Strikeforce Ravens, SIRA identified reductions in minor represented claims and increased levels of withdrawn claims within the scheme.
SIRA continues to worked extensively with the NSW Police to provide analysis and data on the CTP scheme and suspected unlawful activity. As a result, the NSW Police have been provided with mapped data analysis and intelligence indicating participants within the scheme who were associated with increased rates of claims.
The NSW Police have investigated and laid charges for fraudulent activities of service providers, plaintiff lawyers and intermediaries in the CTP scheme. From late 2016-December 2020, the NSW Police have arrested arrests 37 people and laid 217 charges, concerning fraudulent claims totaling in excess of $17 million.
Case study – Olivia’s experience with ‘claims farming’
Three years ago, Olivia was involved in an accident. The traffic lights turned green and she was making a right turn when another vehicle ran the red light and crashed into the side of her car. Olivia had a cracked rib, whiplash and hurt her foot. As the other driver was at fault, their CTP insurer managed her claim.
“The insurer was great. They approved all my treatments, they took care of my medical expenses and I wasn’t out of pocket. And the claim was closed.”
Then Olivia started getting phone calls from a call centre in India.
“They said, we know you’ve been hurt in an accident. Do you know you can get more money? We can give you free advice and we can put you through to a law firm.”
Olivia asked where they got her details from but they wouldn’t tell her.
“They have been pestering me for two years after the car accident. They call me on my mobile phone, they call me at home.”
“I literally scream at them like a crazy woman to stop calling me. They stopped for a while. And then they started again, until my husband answered one day.”
“All insurance policies have become so expensive because people are milking the system. I was hurt, yes. My treatment was done and medical bills paid. I didn’t need to make any further claims.”
Note: Olivia’s name has been changed for privacy reasons.
Find out more about claim farming.
How the new scheme will address fraud
Our previous Green Slip scheme, was largely based on common law to award lump sum payments of compensation, and was vulnerable to fraudulent behaviours and the risk of exaggerated claims.
Under the new CTP scheme, a defined benefit scheme for minor injuries such as soft tissue and minor psychological injuries, will reduce the opportunity and incentives to abuse the system. This will directly reduce Green Slip costs for all vehicle owners.
We also have been given increased powers for fraud investigation and prosecution, with enhanced penalties for people lodging fraudulent and exaggerated claims.