Dealing with fraud after an incident

May 30, 2008

It’s a sad commentary on our world that when a few have been hurt by mistakes and have received generous compensation for their troubles from a responsible company, that a whole lot of morality-challenged folks decide to try and take advantage of the generosity by making false claims of injury. I experienced this a number of years ago in dealing with a large-scale event involving fatalities. There were people who came forward with all kinds of ludicrous claims of emotional distress, false claims of property damage and the like. The worse was when one of the employees in the emergency management office–an employee hired to help deal with crisis events–sued the company because of emotional damage from having to respond.

A recent event illustrates the point. A few people were affected and the company was clear about the process of making a claim and how to be compensated. Then the false claims start coming in. One of the problems is the media coverage. The media interest is heightened because real people have been hurt by real mistakes. The automatic assumption is that anyone else who makes claims are indeed victims–and the story goes on instead of ending in a few hours or days. That makes it tricky for companies to deal with the fraudulent claims. These same people with the moral sense of a toadstool but who are savvy enough to know what leverage they have with the heightened media interest, will certainly not be above screaming loudly to the press that the company wasn’t keeping its promises about compensation, the company is just playing a PR game, the company says one thing and does another, they were treated rudely, they are having to sue, etc., etc.

What to do? As this company is doing. Carefully investigate all claims. Communicate continually that the company will promptly and quickly compensate all those who have been impacted. That’s all good, but I do think you have to be able to go one step further. If the phony victims leverage their media opportunities, the company has to be willing to state that fraudulent claims are common in these situations, the company investigates each claim carefully to both make certain that fully and complete compensation is made to thereal victims but those unscrupulous few who seek to take advantage of the situation will not be compensated.

By the way, based on my experience, depending on the situation you might expect to deal with twice as many fraudulent claims as real ones. I’d love to hear from others on this–does your experience correspond?

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