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Everyone suffers because of workers’ compensation fraud. Tax dollars are wasted, the price of consumer goods increases, legitimate businesses fail due to the unfair competition created by businesses operating fraudulently, and employers and legitimately injured workers lose money.

Most Common Types of Workers’ Compensation Fraud

    Claim Mills

    Organized workers’ compensation fraud involving doctors and lawyers have been an ongoing problem, especially in Southern California. Fraud rings have made a practice of recruiting people to file phony work injury claims. The workers are sent to medical clinics or legal referral centers (commonly known as "claim mills"), which in turn refer them to a doctor or lawyer who is in on the scheme.

    Provider Fraud

    Regardless of the legitimacy of the original claim, many medical or other health practitioners fraudulently maximize the number of medical reports and referrals in each case to increase the number of billings. They may also over bill or render unnecessary treatment.

    Premium Fraud

    Premium fraud occurs when employers fraudulently misstate the number of employees or the nature of their work, such as reporting a roofer as an office worker. Other businesses are part of the "underground economy" and carry no workers’ compensation insurance. Under California law, the Workers’ Compensation Fraud Unit prosecutes the uninsured employer, and investigators in the Unit have a proactive compliance program where businesses are contacted and asked to provide proof of insurance.

    Employer and Insurance Carrier Fraud

    In this type of fraud, employers or employees of an insurance carrier will make a false statement regarding a worker’s entitlement to benefits. The statement is designed to discourage the worker from pursuing a legitimate claim.

    Applicant Fraud

    These cases involve workers who fake an injury, lie about the extent of their injury, lie by denying filing previous claims, fail to disclose a prior injury to the same body part, claim a non-work injury is work related, or illegally work while obtaining benefits. Sub rosa surveillance tapes regularly expose applicants who are fraudulent.

    Reporting Fraud

    If you think someone is committing workers’ compensation fraud, report it to your workers’ compensation insurer or your employer. You may also report it to the California Department of Insurance. As noted in California Insurance Code section 1879.5, no person shall be subject to civil liability for filing a good faith report of suspected insurance fraud to the Department of Insurance.  The form to report suspected fraud may be accessed by clicking the link below.

    Consumer Insurance Fraud Reporting Form - Basic Portal (
    Completed Online Insurance Reporting Forms are to be mailed to the following address:

    California Department of Insurance
    Enforcement Branch Headquarters Intake Unit
    9342 Tech Center Drive, Ste. 100
    Sacramento, CA  95826

    For further information, please contact the Department of Insurance, Fraud Division at (916) 854-5760, or visit their website at