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Lackluster economies bring out the worst in people, as they attempt to adapt to diminishing incomes. Some turn to easy money in the form of insurance fraud--and some become part of it on a huge scale that goes far and beyond low-level "mom and pop" fraud scams.
The Greater Toronto Area is Canada’s “staged auto collision capital,” Richard Dubin told the Toronto Sun. He is the VP of Investigative Services for the Insurance Bureau of Canada. The IBC has investigated 30 staged collision rings and has identified 40 fraudulent insurance claims, 17 of which were fully investigated by the IBC. The IBC official estimates the exposure to insurers is $10 million.
The phenomenon is pervasive in the United States as well. So much so, that the National Insurance Crime Bureau has created a brochure that explains how the scam works. In it, the NICB covers scams like the "swoop and squat," the "side swipe," the "panic stop" and the "drive down."
The most commonly staged accident is the swoop and squat, which involves two, sometimes three vehicles driven by criminals and the victim’s car. In this dangerous scenario one of the perpetrators positions himself ahead of the victim’s vehicle. The second criminal’s car swoops in to cut off his partner’s car, which causes that car to squat by quickly applying the brakes, resulting in the victim’s car crashing into its rear.
The three-car attack is usually used in highway conditions. In it, a third criminal boxes the victim in so that he cannot change lanes when the squat car applies its brakes as it is cut off by the swoop car. In both staged accidents the swoop car and box-in car, if used, take off while the squat car remains to initiate an insurance claim against the victim.
Dubin says there are some markers that have been found as a result of the IBC’s work which may indicate that something may be awry. The accidents involve older cars as the criminals try to minimize their overhead and target well-insured vehicles (including rentals). Multiple occupants of the vehicles claim soft-tissue injuries to maximize claim potential with unverifiable injuries. At the scene a tow truck arrives out of the blue, someone recommends a clinic, repair shop or other related service, and there are conflicting reports of how the accident happened.
The NICB pamphlet has five suggestions that might reduce the probability of becoming a victim. These recommendations are just as helpful here in the States, as they are up north. They include:
1) Don’t tailgate, as this is the driving flaw that marks you as a potential victim.
2) Call the police even if the damage is minimal, since it’s not uncommon for criminals to further damage the vehicle and submit additional claims.
3) Use you cell phone camera or carry a disposable one to document the damage.
4) Be wary of people who suddenly appear at the scene offering referrals to attorneys or clinics, since they might be part of the fraud as well.