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GI Fraud Disputes

General Insurance: Process for Disputes involving Fraud Allegations

Fraud disputes

We have developed a special procedure for general insurance disputes in which the financial services provider (FSP) alleges that the applicant’s claim involves fraud (Fraud Disputes). Please refer to the flowchart below.


Allegations of fraud are usually made when the FSPs state that applicants have not been truthful and/or frank in some manner.  For example, an FSP may state that:

  • an applicant’s claim did not occur as the applicant stated, or
  • an applicant deliberately provided false information to the FSP when arranging the policy (amounting to fraudulent misrepresentation or non-disclosure).


Expedited process

We expedite all Fraud Disputes.  This means that we refer these disputes to determinations without first making recommendations.  The process for expedited determinations is explained in paragraph 8.6 of our Terms of Reference (TOR) and the guideline to that paragraph in our Operational Guidelines. 


All determinations of Fraud Disputes are made by an Ombudsman.



The Ombudsman reviews the material submitted by the parties and then decides whether to discuss the issues raised with the parties at an interview in order to:

  • clarify issues
  • ensure the applicant is aware of the fraud allegations, and
  • ensure the parties are aware of the issues raised in the dispute. 


The Ombudsman usually invites the parties to a Fraud Dispute to attend an interview because of the serious allegation made. 


To arrange an interview, the Ombudsman writes to the party to be interviewed appointing a time, date and venue for the interview.  An interview of an applicant is normally conducted in the capital city or major city closest to their home.  If an applicant lives in a remote part of Australia, or is overseas, the Ombudsman may decide that a telephone interview is appropriate. 


The Ombudsman conducts interviews informally.  The parties are expected to cooperate with the interview process.  If a party refuses to attend or proceed with an interview, the Ombudsman may determine the dispute on the basis of the information already provided to us.  Paragraph 7.5 of the TOR and the guideline to that paragraph explain the action that we may take if a party, without reasonable excuse, fails to take action that we request. 


An interview of an applicant is normally conducted with the FSP present unless the applicant objects.  We prefer interviews to be conducted with both parties present, because this helps to achieve procedural fairness. 


If the FSP is present, they do not have a right to cross examine the applicant.  If the FSP wants to have questions put to the applicant, they have to notify the Ombudsman, who will determine whether the questioning is appropriate in the circumstances.  This questioning is strictly controlled to ensure that the applicant is not disadvantaged or intimidated.


The applicant may also seek to have questions put to the FSP representative, using the same approach.  


Whilst the applicant can have a person attend the interview with them, legal representation at the interview is not permitted unless there are exceptional circumstances (for example, where the applicant is suffering from a mental disability).  If this is the case, the applicant has to request prior approval for representation. 


Steps after interviews

After completing an interview, the Ombudsman may decide whether any further interviews are necessary or whether any party will be asked to provide further information.


Information obtained through an interview of a party will generally be released to the other party if we propose to rely on the information in a determination.  If the interviewed party does not want the information released, they may seek to rely on the exception for “special circumstances” explained in the guideline to paragraph 8.4 of the TOR.  This is a narrow exception, however. 


The Ombudsman may allow parties to make additional submissions within a specified timeframe after an interview.  


After the procedure outlined below is completed, the Ombudsman issues a determination as soon as practicable. 


GI Fraud Disputes Process