On February 12, 2025, NSW Police arrested seven people involved in a large-scale fraudulent scheme targeting sexual abuse compensation claims- known as “claim farming”. The arrests were made following an investigation by Strike Force Veritas, established in February 2024 to investigate fraudulent claims against the NSW Department of Communities and Justice and the NSW Department of Education.
What is claim farming?
Claim farming is an unethical practice where third parties, known as “claim farmers,” solicit individuals to file compensation claims, often without their consent. This practice typically involves:
- Unsolicited contact: Claim farmers cold-call, email, or approach potential claimants directly, pressuring them to make compensation claims.
- Exploitation of vulnerable individuals: They often target vulnerable groups, such as survivors of child abuse, former young offenders, or those involved in motor vehicle accidents.
- Deceptive tactics: Claim farmers may use misleading methods, such as implying they represent government agencies or insurers, to gain trust.
- Selling personal information: After obtaining an individual’s details, claim farmers sell this information to law firms or claims management service providers.
- Financial incentives: Claim farmers typically receive a fee for each referral, which can be up to $2,200 per claim.
NSW police have charged the seven alleged offenders with dishonestly obtaining financial advantage by deception. This falls under Section 192E of the Crimes Act 1900 (NSW), which criminalises fraudulently obtaining property or financial advantage.
Furthermore, a number of the seven alleged offenders have also been charged with accessory before the fact to publish etc false misleading material to obtain advantage and incite to commit publish etc false misleading material to obtain advantage. These charges relate to aiding, abetting, or encouraging the publication of false or misleading information to gain an advantage, which is likely connected to submitting the fraudulent compensation claims. These offences are related to fraud and deception, and are serious offences under the Crimes Act.
The investigation, led by Strike Force Veritas, suggests a significant portion of the $1.3 billion worth of claims paid out might be fraudulent and that a third of the population of one NSW prison- have submitted fraudulent claims. The police also executed a search warrant at a law firm, indicating a potential investigation into professional misconduct or complicity.
The investigation is ongoing, and further charges may be laid as the inquiry progresses.
In response to the growing concern over claim farming, the NSW government introduced a draft bill on January 30, 2025, aimed at prohibiting these practices. The Claim Farming Practices Prohibition Bill 2025 proposes:
- Banning unsolicited contact with potential claimants;
- Prohibiting the buying or selling of claim referrals;
- Imposing penalties of up to $55,000 for offenders;
- Potential disciplinary action for lawyers involved in claim farming.
Our team at Brooke Winter Solicitors specialise in criminal law. Our role is to sit down with you and work out the strategy that will get you the best possible result in accordance with the law. If you have any questions about this article or any other topic of law, please call our team of experts on 1300 066 669.
