This comes after a shocking trial earlier in the year when a Peel police officer was found guilty of fabricating nine accident reports for a fee by the Ontario Superior Court. He was sentenced to five years in jail.
A tow truck driver - who also happened to be a childhood friend of the officer - crashed vehicles together in a secluded yard at night, and then hired people to pose as vehicle occupants in order to claim insurance. The duo raked in about $916,000 from insurers, and another $272,000 in legal and medical expenses.
Sometimes fraudsters take advantage of innocent motorists to induce collisions. According to the IBC’s investigative unit, there are several typical scenarios.
For example, in a “swoop and squat”, the scammer will pull up in front of another vehicle and then slam the brakes quickly so that the driver behind doesn’t have enough time to respond. In a “drive down”, the fraudster will wave and let another vehicle back out of a parking spot, and then intentionally drive into it.
The biggest concern is that organized crime may be involved in auto collision fraud. In the Greater Toronto Area, three huge crime rings have emerged in recent times and it is suspected that individuals who have links with the auto fraud crime ring in New York have entered Ontario as well.
Rick Dubin, vice president of the IBC’s investigations unit, says that organized crime is very creative.
“They keep changing their approach over time. But insurers are also getting better at fighting fraud. With the recent passing of Bill S-4, an amendment to the Personal Information Protection and Electronic Documents Act, insurance investigators can share information with other insurers if they have reasonable grounds to believe that there is fraud. Luckily, we have some effective new tools at our disposal,” he said.
Ben Kosic serves as the CEO of Canadian National Insurance Crime Services, a data analytics company with uses complex algorithms to detect fraud, which is then sent to the insurer. This system does not collect any personal information and is used by nine insurance firms in Ontario who make up 75 percent of the market. It requires the use of a black box and new insurance claims forms in the province have clauses which provide consent for it.
“Most people would probably consent to their claims information being shared if it leads to a reduction in fraud and, therefore, lower insurance premiums,” Kosic says. “Currently, Ontario insurers could be losing up to an estimated $1.6 billion per year to auto insurance fraud and some believe that it’s even more.”
Lawyers, along with claim adjusters, should be on the lookout for red flags which could signal fraudulent activity. A vehicle filled with occupants who have no connection with each other, for example, could be an indicator of fraud.
It is important to be vigilant and question the circumstances of an accident, says Donald Dacquisto, an attorney with Zuber & Co., LLP.
“They will obviously need to conduct a thorough examination for discovery on the issues surrounding the incident, even in a rear-end-type collision. The story of how the vehicle occupants came to be riding together and their personal relationships may prove to be implausible on careful examination. Even still, significant credibility issues are not sufficient to establish a staged accident, and we have to tread very carefully as lawyers with such assertions, as do the insurance adjusters, which makes it challenging,” he said.
To continue the fight against fraud, Canada could seek inspiration from England which has a dedicated Insurance Fraud Bureau. If a criminal is found guilty of lying about their injuries, they can be sent to jail. In Canada, jail sentences are not often given for such cases.
With lawyers on their side, the IBC is hoping to discourage insurance fraud to make it easier for real claimants with genuine injuries.
