Insurance Fraud Costs Everyone

For years Frenchitt Collins worked as a legitimate insurance adjuster trying to attract clients with ads like the one in the video above.

Jan Bodon, US Postal Inspector explained, “He got an institutional understanding of how the chiropractic business worked. Once he felt knowledgeable enough he filed fraudulent claims with numerous insurance companies.”

Collins set up a bogus chiropractors’ office using P.O. boxes and turned to friends and family to get the scheme started.

“He would go ahead and offer them $100 or $200 in order to be able to use their identifiers. Once he had that information he would go ahead and complete the medical forms necessary and send them to the insurance companies," Boden said.

Insurance companies would then send checks—lots of them.

“Those PO Boxes were rented by him, his wife, his brothers, or his girlfriends," said Boden.

The goal of these ads was to lure in more victims.

“That added legitimacy to his scheme. Victims went and actually dialed his number, provided the identifiers and he went ahead and submitted the fraudulent claims," Boden explained.

Federal officials say insurance fraud is a $30 billion business in the US.

Fred Lohmann, National Insurance Crime Bureau explained, “It is very lucrative for the criminal to perpetrate the crime because it’s low risk and it’s high reward and they know that.”

Experts say this abuse is costing all of us.

“The fact that this crime is occurring and is so prevalent in the US – it taxes resources federal, state, and local that have to actually go in and investigate the crimes," said Lohmann.

Collins was sentenced to 15 years in prison and to pay over $700,000 in restitution to his victims. Losses like those in this story are passed on to all consumers who buy insurance. One way to avoid unwittingly becoming part of one of these insurance scams – do not give your social security number unless you are sure you are dealing with someone legitimate.

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