Industry cracking down on auto insurance fraud

Auto insurance fraud has been in the news lately, with the recent announcements of court judgments obtained against individuals in B.C. and the bust of an inter-provincial fraud ring by the Insurance Bureau of Canada (IBC).
Recently, the IBC congratulated the Ontario Provincial Auto Theft Team on Project Eastbound, resulting in the bust of an inter-provincial auto theft ring that recovered $6 million in high-end vehicles.
“Auto theft is a very serious crime that costs Canadians more than $1.2 billion every year,” said Rick Dubin, vice-president of investigations at IBC. “It is also a crime that spans across jurisdictions and political borders. As such, a co-ordinated effort of various police forces and stakeholders like the insurance industry is often required. Project Eastbound is an excellent example of what can be achieved through cooperation.”
IBC played a key role in initiating the 14-month investigation. It also assisted police in helping to uncover the true identity of cloned stolen vehicles.
In Canada, about 160,000 vehicles were stolen last year, the IBC notes. About 30% to 35% are never recovered, and recovery rates are declining.
“This indicates increased involvement of organized crime, and that the vehicles are more often being re-identified, chopped and/or exported,” IBC noted in a press release. “Currently, about 54 stolen cars leave Canada every day.”
In B.C., the province’s public auto insurance body, ICBC, has been aggressively targeting individuals by seeking civil judgments in court to recover money lost through auto insurance fraud.
In August and September 2006, ICBC announced, the insurer obtained three convictions, jail time, fines and recovered more than $33,000 in restitution from three people who provided the insurer with false or misleading information.
The B.C. court decisions above related to two separate incidents. One involved two people attempting to claim injury payments when in fact the collision injuries were slight or negligible. The second involved a boy who falsely claimed the vehicle he had crashed had been stolen and driven by someone else.
ICBC’s campaign against fraud has paid off in 2006 Q3, the insurer noted in a press release announcing its quarterly statements.
“One area of good news is the decrease in claims costs related to auto theft due to the success of the Bait Car program and other ICBC-funded initiatives,” ICBC said in a statement. “Claims costs for auto theft in the first nine months of 2006 were Cdn$43 million down from Cdn$53 million for the same period in 2005 and Cdn$58 million in 2004