ClaimScore, the startup that leverages artificial intelligence (AI) to identify fraudulent claims in class action lawsuits, has recently completed a seed funding round, raising $3.15 million. The round was led by ROC Venture Group, a private investment firm situated in Naples, Florida.
Launched in 2022, ClaimScore has positioned itself as the sole software solution dedicated to combating claims fraud within class action settlements. It reports to have aided enterprises in dodging $340 million in fallacious payments so far.
The crowd-funded round surpassed expectations, collecting an additional $1.15 million above the target. The funds are designated for sustaining the firm’s growth and general operations, with a strong emphasis on boosting its offerings for law firms, claims administrators, and in-house counsel.
The founding team of ClaimScore includes its President Donald Beshada, a seasoned class action litigator with 25 years of experience; CEO Bob Gallo, a seasoned entrepreneur and former financial advisor; and Bryan Heller, a veteran of founding and product ownership in AI tech startups in consumer and B2B sectors.
ClaimScore has identified claims fraud as a looming issue, exacerbated by AI and social media platforms. As per a report, companies shelled out approximately $51.3 billion in class action settlements last year, and an alarming 99% of class action cases have been rampant with fraudulent claims according to ClaimScore.
ClaimScore points out that influencers on platforms like TikTok have been escalating the volume of claims by encouraging their followers to claim “free money”. AI and other technological tools have also contributed to fraudulent claims by generating scripts that can modify names and IP addresses to disguise their deceitful activities.
The AI solution provided by ClaimScore scrutinizes each claim in real-time, reporting results on an interactive dashboard. The technology assigns each claim a score starting at 1000 and decreases each time a claim fails a criteria. It is advised that claims scoring below 700 should be rejected.
CEO Gallo commented on the funding success, stating that the new influx of capital will enable ClaimScore to bring its benefits to a wider legal community – making claims processing, validation, and fraud identification faster, adding a layer of unprecedented transparency to the entire process.
Expressing his optimism for ClaimScore, Aaron Stafford, founding partner at ROC Venture Group, stated that the promising startup fills a market gap he wasn’t aware existed until he met the founders. Stafford is confident that ClaimScore can disrupt the class action space by providing a solution to this deeply-rooted fraudulent activity.
The fund raising and subsequent expansion of ClaimScore’s services signifies a potential shift towards a more streamlined and secure realm of class action lawsuits – presenting an efficient way to ensure transparency and justice for all involved parties.