Consumers See Insurance Fraud As Important Issue To Combat

Vast Majority Say Seeking Background Information Acceptable

Atlanta, December 3, 1996 -- Insurance fraud is an important issue say an overwhelming margin of consumers, and the vast majority of Americans believe businesses should be allowed to detect possible fraud by obtaining appropriate background information about insurance applicants, according to a new survey released today by Equifax.

In the newly released 1996 Equifax-Harris Consumer Privacy Survey, 94 percent of Americans believe reducing insurance fraud is an important consumer issue, ranked only behind controlling the cost of medical insurance and staying out of excessive debt. In fact, the issue of fraud is so compelling that Americans temper their privacy expectations and believe it acceptable for businesses to obtain relevant personal information to verify data provided by an applicant and to help detect or combat fraud.

Consumers find it acceptable for businesses to obtain the following: criminal record information for fraud convictions (85%); motor vehicle records to identify dangerous driving histories (79%); workers compensation data to verify previous injuries or disabilities (78%); health claims data to verify information supplied by an applicant on an insurance application (77%); and medical records information to verify history of diseases, illnesses and injuries asked about on the application (66%).

"Insurance fraud of all kinds is a multi-billion dollar problem. This survey shows the American public doesn't want people taking advantage of the system and driving up costs for everyone," said Derek V. Smith, Equifax Executive Vice President and Group Executive. "Americans are clearly supportive of appropriate access to needed background information to help detect fraud and are willing to balance the right to privacy with relevant access to information for risk assessment purposes. We must continue to find new, cost-effective ways for the insurance industry to manage the risk of fraud."

Equifax Insurance Services provides the insurance industry with a variety of information and business solution services that can be instrumental in combating fraud in both the property and casualty and the life and health sectors. In fact, Equifax recently announced that several of its fraud fighting detection services are available through the National Insurance Crime Bureau's NICB Online system, using the investiGATE link. These services provide ways to verify application information for claims and underwriting purposes.

In other survey findings:

• Privacy protection ranks sixth among eight different issues as an area deemed somewhat or very important to consumers, just ahead of "having access to credit when you need it" and "putting contents and calorie labels on foods sold in stores". The most important issues to consumers were "controlling the cost of medical insurance" (98%) and "staying out of excessive debt" (96%).

• About two-thirds (67%) of the American public say they prefer the present system of protecting privacy - combining voluntary privacy practices by companies, individual lawsuits and court decisions, and federal and state laws in specific industries - over the creation of a federal government privacy commission.

• A majority (56%) of Americans believes that privacy protection in the year 2000 will remain at least a strong as it is today if not improve - a 12-point upward swing since 1992.

• The percentage of Americans reporting they have been a victim of improper privacy invasion (24%) was down slightly and has not significantly changed since 1991.

The 1996 Equifax-Harris Consumer Privacy Survey was conducted by Louis Harris & Associates in collaboration with Dr. Alan Westin of Columbia University. It is the seventh in a series of detailed surveys of consumer attitudes on privacy, financial, insurance and healthcare industry trends. The survey results are based on 1,005 telephone interviews conducted July 20-29, 1996. The sample is designed to be representative of telephone household in the 48 contiguous United States and is weighted to age, education, race and sex to bring them in line with figures for the adult population. The sampling error is ±3 percent.

Equifax Inc. (NYSE: EFX), committed to Global Information Leadership for the Information Age, is the leading provider of information services that help businesses grant credit, authorize and process credit card and check transactions and insure lives and property. Established in 1899 in Atlanta, Equifax today employs 14,000 people throughout North and South America, the United Kingdom and continental Europe. Revenues for the 12-month period ended Sept. 30, 1996, exceeded $1.7 billion.