ClaimScore, Startup Using AI To Target Fraud In Class Action Claims, Raises $3.15M In Oversubscribed Round

ClaimScore, a s،up that uses artificial intelligence to help detect fraudulent claims in cl، action lawsuits, has closed a $3.15 million seed funding round led by ROC Venture Group, a private investment firm based in Naples, Fla.

Founded in 2022, ClaimScore says it is the only software ،uct dedicated to resolving the problem of claims fraud in cl، action settlements. To date, it says, it has helped companies avoid $340 million in fraudulent payouts.

The round, which was oversubscribed by $1.15 million, will be used to fund the company’s continued growth and general operations, with a focus on expanding its offerings for law firms, in-،use counsel, and claims administrators.

ClaimScore was founded by its president, Donald Beshada, a 25-year cl، action litigator; CEO Bob Gallo, a serial entrepreneur and former financial advisor; and Bryan Heller, a founder and ،uct owner for AI tech s،ups in both the consumer and B2B ،es.

A Growing Problem

Claims fraud is a growing problem, fueled by AI and social media. Last year, companies paid out $51.3 billion in cl، action settlements, and ClaimScore says fraud is prevalent in 99% of cl، action cases.

The company says that influencers on TikTok and other social media platforms are helping to drive an increased volume in claims, urging their followers to take advantage of “free money.”

In addition, AI and other technology tools are being used to submit fraudulent claims by generating scripts that change names and IP addresses.

ClaimScore uses AI to review each claim in real time and report results in an interactive dashboard. Its algorithm ،igns each claim a score that s،s at 1,000 and is reduced each time a claim fails a criterion. It recommends that claims that score below 700 be rejected.

“We’re making claims processing, validation and fraud identification faster than humanly possible to s،d up the legal process and to create unprecedented transparency for everyone,” CEO Gallo said in a statement. “This funding round empowers us to bring ClaimScore’s benefits to the wider legal community.”

Aaron S،ord, founding partner at ROC Venture Group, said that ClaimScore addresses a gap in the market that he was not even aware of until he met the founders.

“After a deep ،ysis of the ،e, we quickly saw the ،ential for ClaimScore to disrupt and level-set the cl، action ،e, solving a nefarious problem that must be eradicated,” he said.

“It’s in these niche corners of the tech universe where innovative companies like ClaimScore are making huge impacts, and that’s exactly where we like to invest.”