Insurance fraud costs the NSW motor accident compulsory third party (CTP) scheme an estimated $150 million a year, and the State Government has decided it’s time to crack down.

State Insurance Regulatory Authority CEO Anthony Lean will head a multi-agency taskforce charged with tackling fraud. Members will be drawn from government agencies and the legal, health and insurance sectors.

The taskforce will report to the Government on strategies to “deter, detect and respond” to the crime. It will also develop an awareness campaign to inform the public about the cost to the community.

CTP fraud can take many guises, such as exaggerated claims, staged accidents, lying about claims or providing false or misleading information to insurers, health professionals or lawyers. The campaign will stress fraud can be perpetrated by service providers as well as vehicle owners.

The insurance industry has welcomed the Government’s push.

Suncorp EGM Statutory Portfolio Chris McHugh says he hopes the taskforce will open the way for broader reform of the CTP scheme.

“The current scheme offers large lump-sum payouts for minor injuries, which encourages fraudulent and exaggerated claims that can drive up premiums,” he said.

“Establishing this taskforce is a vital first step in ensuring we work together to provide better value to those unfortunate enough to be genuinely injured on our roads.”

Anthony Justice, CEO of IAG’s Australian Consumer Division, says the rise in suspicious CTP claims has been “significant” in recent years and “is accelerating dramatically”.

He says despite decreasing casualty rates and safety awareness campaigns, the number of CTP claims increased 39% from 2008-14 and by 30% in the past year.

Insurance Council of Australia (ICA) President Andy Cornish told the council’s annual forum in Sydney on Friday the CTP scheme is susceptible to “exaggerated claims and falsehoods”.

He says claims are going up while the number of road accidents is going down. “This is costing the scheme dearly and having a big impact on prices, the scheme and its long-term viability.”

The NSW Government has established a CTP fraud hotline on 1800 600 444.