ACC data showed that 664 cases indicated misuse of the scheme by those receiving accident compensation. Photo: RNZ / Angus Dreaver
Almost 3000 cases of potential fraud, waste or abuse of the ACC scheme have been investigated in the past five years, with only seven of them prosecuted.
Data released to RNZ under the Official Information Act shows last year alone, of 1160 investigations done by the entity's fraud protection team, 664 cases indicated misuse of the scheme by those receiving accident compensation but no one was charged.
The cases vary between clients working while receiving weekly compensation and intentionally failing to declare earnings, misleading ACC about an injury and their ability to work by falsifying documents, and also providers invoicing ACC for rehabilitation services that were not provided to an ACC client.
ACC declined an interview with RNZ.
Through a statement, deputy chief executive for service delivery Amanda Malu said ACC's approach was early intervention, and prosecution was a last resort.
ACC used data to identify early indicators of irregular behaviour, she said.
"This increases the pipeline of work and enables us to intervene much earlier, to effect behavioural change."
She said prosecution was only one of many tools used when dealing with fraudsters.
"There are a range of remedial options available, including formal warnings, recovering overpayments and applying penalties under ACC legislation."
Malu said where ACC referred cases for prosecution, these were either directed to the Crown Solicitor or another prosecuting agency.
"Those agencies are accountable for laying formal charges and managing the judicial process connected with prosecution. Courts will determine an appropriate sentence upon conviction.
"However, ACC's strategy is to intervene early to prevent fraud from being committed in the first place."
Between 2021 and 2022, the number of fraud cases investigated by ACC's watchdog jumped from 181 to 1160, an increase of 540 percent.
ACC said the rise was due to the implementation of a new case management system, which amped up the entity's ability to pinpoint potential cases of fraud, waste or abuse. However, new system analytics capability also brought up a higher number of cases for investigation.
"We have a variety of client and provider-based tools that enable us to gather insights from our data, which we convert into intervention opportunities.
"This includes a tool developed in-house to proactively detect irregular billing and payment data by providers."
Malu said where fraud was detected, ACC activated traditional investigative functions.
"This may include gathering evidence, interviewing witnesses, obtaining statements and preparing depositions."
She said with the new system, ACC could identify and intervene much earlier in possible misuse of the compensation.
"Early identification of potential integrity concerns allows us to explore directly with the individual any factors that may be contributing to the irregular behaviour."
ACC denied the use of artificial intelligence on data collection.
"Our Integrity Services group does not use artificial intelligence and has not done so in the past," the statement said.
'Prevention-first approach' - ACC
ACC has had a fraud investigation unit of some description since 1992, Malu said.
ACC's Integrity Services was formed in 2014 to separate intelligence and investigation functions, as well as widening the scope to include fraud, waste, and abuse.
ACC said the service also allowed to extend its mandate beyond client fraud to providers, levy payers and internal staff.
Malu said with the establishment of the Integrity Services team, ACC had moved to a proactive model which embodied a prevention-first approach to identify and intervene as quickly as possible.
"This attempts to drive positive changes in client behaviour."
Malu said ACC had not employed more staff specifically to conduct timely investigations.
"Instead, we have used our resources in a more efficient way by reallocating people to address potential integrity concerns earlier on. This reflects our prevention focus.
"Our investigation support panel are available to apply a traditional investigative approach to cases where fraud is suspected. They are available as and when required, as a contingent workforce."
The role of the service was to identify and protect the scheme from fraud, waste and abuse, Malu said.
"The prevention-first approach allows us to be more proactive in protecting the scheme, using risk-based principles, data insights, and referral channels to inform where we should best focus our efforts and provide the most appropriate response."
She said ACC had open and transparent conversations with people receiving accident compensation to understand why a potential issue was arising.
"Such conversations often allow us to determine the absence of fraud, waste, and abuse without the need for further intervention or formal investigation."
ACC said for every $1 spent on investigations, it returned approximately $7 in savings.
"By intervening and helping people back to independence more effectively, we have generated approximately $26m in savings to the Scheme in the financial year to date," Malu said.
As of 25 May there were 90 cases of fraud, waste or abuse of the ACC Scheme open for investigation.