INSURANCE FRAUD UNDERSTANDING THE BASICS
Criminals who defraud property/casualty insurance companies not only steal from insurers, but they rip all of us off as well. We all pay the price for their crimes. You…your coworkers…your neighbors…we’re all victims.
Insurance industry studies indicate 10 percent or more of property/casualty insurance claims are fraudulent. And fraud is the second most costly white-collar crime in America behind tax evasion. Add it all up and insurance fraud costs Americans billions of dollars each year. Not only does fraud cause higher insurance rates, but it also raises our taxes and inflates prices for consumer goods. Insurance cheats range from organized criminal enterprises, to unscrupulous doctors and lawyers, to dishonest body shop operators, to your neighbors. Regardless of who they are, insurance criminals are motivated by one thing: money. It's all about greed and taking what isn't
A COLLECTIVE RESPONSE TO CRIME
It takes a concerted team effort to fight back against insurance criminals. No individual
organization or agency has the resources to single-handedly stop these criminals. But by
combining the resources and expertise of thousands of insurers, law enforcement agencies, state
fraud bureaus and the National Insurance Crime Bureau, insurance fraud can be detected,
deterred and stopped, thus helping to protect American consumers' pocketbooks.
- The nation's property/casualty insurers have made significant investments creating Special
Investigative Units, or SIUs, within their companies. These groups are composed of
specially trained professionals who investigate suspicious insurance claims and work with
law enforcement agencies and the NICB to track down insurance criminals.
- Many states have enacted laws and statutes that contribute to successful fraud deterrence, and
most states have fraud bureaus dedicated to fighting insurance fraud.
- The insurance industry also supports the NICB, whose mission is to combat fraud and theft
for the benefit of members and the public through information analysis, forecasting, criminal
investigation support, training and public awareness.
IT'S NOT A FEAT OF SCIENCE: CLONED VEHICLES ARE A CRIME
Enterprising criminals continue to invent new scams to defraud insurers and consumers. One innovative vehicle theft scheme involves copying a vehicle identification number (VIN) from a legally owned and documented vehicle sitting in a parking lot or vehicle dealership. The VIN is then used as the basis to create counterfeit VIN tags.
The next step in the cloning process is to steal a vehicle similar to the one from which the criminal lifted the legitimate VIN. The stolen vehicle's legitimate VIN tag is replaced with the counterfeit one. With this counterfeit tag, the stolen vehicle is now a “clone” of the original vehicle that was legally owned and innocently parked in a lot. With the counterfeit VIN tag, the stolen vehicle can easily be sold without detection by government agencies.
To complete the scenario, criminals will create counterfeit ownership documents for the cloned vehicle or obtain the ownership documentation under false pretenses. They use this phony documentation to sell the stolen vehicle to an innocent purchaser. Vehicle cloning is a highly lucrative crime. Car thieves often travel across state and international borders to sell cloned vehicles at the highest prices. Most licensing agencies do not check for
duplicate ownership when an out-of-state ownership document is surrendered, so the odds of discovery are low. It is also easy to simultaneously insure the same VIN in different locations.
Fraud Prevention Tips
The National Insurance Crime Bureau suggests that to avoid purchasing a cloned vehicle:
- Check the vehicle's VIN with appropriate government agencies or your state bureau of motor vehicles.
- Analyze the ownership pattern for any new or late model vehicle with no lien holder.
- Be careful about purchasing a used vehicle from an individual running a newspaper ad and using a cell phone number.
- Conduct a title search of the vehicle.
- If possible, have your insurer inspect the vehicle prior to purchase.
- Trust your instincts: If you don’t like the answers or the deal sounds too good to be true, walk away!
IDENTITY THEFT: PROTECT YOUR IDENTITY AND GOOD CREDIT
As online communications and electronic commerce continue to grow, identity theft has reached new criminal proportions. Identity thieves now do much more than simply steal credit card numbers from discarded paper receipts; they use sophisticated computer technologies to illegally obtain your financial assets and can potentially ruin your credit history.
Identity thieves steal personal identifying information, such as names, addresses, date of birth, social security numbers, credit card numbers and driver’s license numbers, and use this personal information to fraudulently obtain cash and credit, goods, services and other property, including insurance policies.
Some of their criminal tactics include opening phony bank accounts or stealing from established ones, obtaining unauthorized credit cards and insurance policies, applying for car or house loans, and leasing apartments with false names.
Theft Prevention Tips
- Shred or tear up personal financial documents before discarding them.
- Do not print personal identifiers such as your social security number, date of birth
or driver’s license number on your checks.
- Use your social security number only when necessary.
- Before revealing any information online, ensure the website is securely protected
(a yellow padlock symbol will be present in the corner of your computer screen
on secured websites).
- Before revealing any information to another person, ask how it will be used.
- Do not provide personal, financial or identifying information to an unknown
- Pay attention to billing cycles. Identity thieves may reroute bills to another
address to hide criminal activities.
- Carefully review your monthly credit card statements, checking for any
- Obtain a copy of your credit report at least once a year to check for errors.
- Minimize the number of cards and identifying information you carry, especially
your social security card and passport.
IF YOU SUSPECT INSURANCE FRAUD OR THEFT, SPEAK UP! CALL THE NICB TOLL-FREE HOTLINE…
1.800.TEL.NICB (1.800.835.6422). YOUR CALL IS FREE. YOUR CALL CAN BE ANONYMOUS. YOU COULD BE ELIGIBLE FOR A REWARD