Soft fraud, also called opportunity fraud, occurs when?

• A. An application for insurance contains untrue information.
• B. A legitimate claim is exaggerated.
• C. A loss is triggered intentionally.
• D. A claim is filed for a loss that did not occur.

Answer: (B)

Soft fraud, or opportunity fraud, happens when a claim is based on a real loss but is inflated or embellished to receive more money than deserved. It relies on taking advantage of an actual incident rather than inventing one. This differentiates it from hard fraud, where the loss is staged or does not occur at all, and from misrepresentation on an application, which happens before any claim is made. Therefore, the best description is that a legitimate claim is exaggerated. The other scenarios involve fabricating information, staging a loss, or claiming a loss that didn’t occur, which are not soft fraud.