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IBC warns of auto fraud ‘swoop and squat’


April 1, 2007   by


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March marked National Fraud Prevention Month, and the Insurance Bureau of Canada (IBC) released information throughout the month to help educate about and prevent this type of crime.”Insurance fraud is big business,” said Rick Dubin, vice-president, investigations at the IBC.

“It is a low-risk, high-reward crime that costs Canadians about $3 billion per year. However, there are steps that Canadians can take to recognize it. Report it. Stop it.”

One of the most costly forms of insurance fraud is staged auto collisions, the IBC reports. Also referred to as a ‘swoop and squat,’ a vehicle participating in the fraud suddenly speeds up and cuts off a ‘squat’ vehicle (also participating in the fraud), forcing the ‘squat’ vehicle to slam on its brakes.

Ideally for the fraudster, an inncocent victim driving behind the ‘squat’ vehicle does not have enough time to brake, thus slamming into the back of the ‘squat’ vehicle. The innocent driver would thus look like the at-fault driver for failing to keep a proper distance. Usually, everyone who is in on the fraud (those in the ‘squat’ vehicle) claims some sort of injury, and makes an accidents benefits claim.