Given the rise in class action claim fraud, a flood of fraudulent claims might cause administrators to believe their notice plan is adequate, when in fact they are not reaching legitimate class members.
The Risks of Delayed Fraud Detection
Often, stakeholders in class action cases rely on an increasing volume of claims to gauge the success of the notice plan. When claims submissions increase dramatically, it can be tempting to believe the notice plan is effectively reaching eligible class members. But if claims administrators aren’t actively monitoring for fraudulent submissions during the notice period, there’s a risk that a substantial portion of the claims could be inauthentic. This can inflate reported figures, skewing the perceived effectiveness of the notice plan and impacting the overall settlement success.
In a recent case, a claims administrator bolstered notice efforts, driving claims from 20,000 to a staggering 2.4 million by the end of the notice period. With the sheer volume of claims submitted, all involved parties were confident the target claims rate would be met. However, upon final review after the claims period closed, the administrator found only 20,000 claims were valid—a far cry from the target and underscoring a striking level of fraud within the system. This late discovery not only wasted resources but also complicated the settlement process, leading to distrust among stakeholders and diminishing the perceived effectiveness of the notice plan.
Real-Time Claims Analysis Allows for Notice Plan Adjustments
Real-time claims analysis allows claims administrators to assess the effectiveness of the notice plan continuously, enabling immediate adjustments if fraudulent claims patterns emerge. By integrating advanced backend fraud detection tools into the claims administration process, administrators gain real-time insights into submission quality. This proactive approach empowers administrators to adapt their notice strategies midstream, thereby improving outcomes and helping mitigate the risk of fraudulent submissions.
ClaimScore’s backend fraud detection tools are designed to operate quietly and effectively behind the scenes, flagging suspicious activity without disrupting the experience for genuine claimants. Unlike front-end blocking, which can deter legitimate class members, backend fraud detection ensures that only fraudulent claims are targeted. By continually monitoring data patterns, administrators can prevent fraudulent submissions from affecting the claims pool, thus preserving the integrity of the class action settlement.
Ensuring Adequate Notice to Genuine Class Members
For stakeholders, from judges to attorneys, the confidence that settlements are accurately distributed to genuine class members is invaluable. Claims administrators need tools to monitor and assess claims submissions as they come in, reducing the risk of overlooking fraud until after the notice period has ended. This enables stakeholders to trust that the settlement process remains fair, transparent, and effective.
Real-time claims analysis is not just a “nice-to-have” in today’s class action environment; it is a necessity. As the volume of class action cases and the potential for fraud continue to grow, adopting proactive, real-time monitoring can make the difference between a successful, credible settlement and one plagued by fraud. With ClaimScore’s backend fraud detection capabilities, claims administrators can ensure that notice plans genuinely reach intended recipients and that settlements fulfill their purpose—delivering justice to those who truly deserve it.
