Claims Harvesting

CLAIMS HARVESTING - MOTOR INJURY SCAMS

Claims harvesting is a type of scam that involves a range of practices to identify people who have been in a motor vehicle crash and entice or harass them into making a compensation claim through a lawyer. The claims harvester is paid for the referral.

Outlawed in other states, these practices are on the rise in WA. Since COVID-19 started, compensation claims through compulsory third party insurance have increased in WA, even though crash numbers have decreased. Interstate, both crash numbers and claims have decreased. Almost 30% of new claims in WA are suspected to be harvested.

The Western Australian Government has introduced legislation intended to outlaw this unethical behaviour.

HOW IT IS DONE

Cold calling

Referring people to a not-for-profit for support service

Sometimes, people who are in a car crash are encouraged to contact a certain not-for-profit entity to obtain support. When they contact the not-for-profit organisation, staff offer to lodge a claim for them, make appointments and refer them to a law firm. We understand the not-for-profit entity then pays the person (eg tow truck driver, mechanic or car hire company) or organisation that referred them.

IMPACTS ON WESTERN AUSTRALIANS

Claims harvesting negatively effects both individuals and the community.

Individuals:

• are harassed at a time (ie after a crash) when they may be more vulnerable
• are pressured to make false claims when they are not injured
• have their personal details sold
• are lured by the false promise of easy money
• are sometime left with little or none of the compensation payout after legal fees.

Community:

• The cost of insurance premiums for every driver goes up.

NEW LEGISLATION AND PENALTIES TO ADDRESS CLAIMS HARVESTING

The State Government is introducing new legislation to stamp out claims harvesting. The new law will:

1. make it an offence to personally approach or contact a potential claimant and solicit or induce the potential claimant to make a claim: a fine of $10,000
2. make it an offence to receive or make payment for a claim referral - a fine of $10,000
3. make it an offence to provide false or misleading information to the Insurance Commission: a fine of $10,000
4. require all lawyers to certify they are not aware of referral fees being paid nor claimants being solicited
5. require a pre-legal action conference to take place before litigation can commence, to provide claimants, their legal representative and the Insurance Commission with opportunities to settle claims prior to starting or progressing legal proceedings
6. enable Government agencies to share information about suspected harvesting.

These changes are expected to:

• stop unethical targeting of people in a vulnerable moment, after they have been in a crash
• stop law firms receiving and paying for referrals
• reduce the time it takes to complete a claim
• reduce legal costs
• empower agencies to act on suspected incidents of claims harvesting.

WHAT YOU CAN DO

You can tell the Insurance Commission about your experience, and we will look into the matter.

• Provide details about the call to us via our reporting form or call us.
• If you have a claim with us, let your claims officer know about the call via email or by phone.

INJURED IN A CRASH?

If you were injured, you can make an injury claim by completing the Online Crash Report.

Driver/Owner – the online crash report enables you to make a claim at the same time that you report the crash, which you are legally obliged to do. The report is sent to the Insurance Commission of Western Australia and the Western Australia Police Force.

Passenger/pedestrian – you can notify us of any injuries you sustained and we may pay for your treatment to help you recover.