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Police arrest eight in auto insurance fraud investigation


April 27, 2006   by Canadian Underwriter


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Eight Greater Toronto Area residents face 97 charges after the Toronto Police Fraud Squad, the Toronto Strategic Partnership, members of 33 Division and various insurance industry members concluded a four-and-a-half month investigation into the alleged production and sale of illegal insurance policies and insurance cards.
The investigation began Dec. 1, 2005, as part of a province-wide concern about the growing number of illegally insured drivers.
In a press release, Toronto police outlined allegations against the eight arrested individuals. According to police:
During 2005 and 2006, individuals were involved in the production and sale of illegal insurance policies and insurance cards
A large number of insurance brokers and company names were plagiarized in the operation and sale of the fraudulent slips to people across Ontario.
According to a Globe & Mail report, police say they do not believe the eight people charged were involved in a collective fraud ring. The charges have not yet been proven in a court of law.
Police warned: “Be very cautious regarding ads offering cheap rates and also parties offering to meet in coffee shops and parking lots offering to sell insurance slips.”
The Toronto Strategic Partnership is a multi-law enforcement agency response to mass marketing fraud. It includes the Toronto Police Service, Ontario Provincial Police, Phonebusters, York Regional Police Service, RCMP GTA Commercial Crime Section, Competition Bureau, Ministry of Government Services formerly MCBS, Federal Trade Commission, U.S. Postal Inspection Service and the U.K. Office of Fair Trading.
Other agencies and private sector members involved in the investigation include Peel Regional Police, London Police Service, Waterloo Regional Police Service, Canada Post, Insurance Bureau of Canada, Registered Insurance Brokers of Ontario, Financial Services Commission of Ontario, the Insurance Brokers Association of Ontario and Accident Support Services International Ltd.’s Collision Reporting Centres.
In a press statement, the IBC warned consumers to beware of buying phone auto insurance. “With news of today’s (April 26) arrest in Toronto of eight people involved in an insurance scam, Canada’s home, car and business insurers are reminding consumers that there are still many unscrupulous people out there trying to trick them into buying phony auto insurance coverage.”
Signs to watch for, the IBC said in its release, are:
If it sounds too good to be true, it likely is:
“Auto insurance in Ontario averages about $1,278 per vehicle according to recent industry information,” the IBC says. “Ask questions and get a number of price quotations. If you have a good driving record and are offered insurance at a dramatically reduced price, make sure you are not the victim of a scam.”
Check the source: Licensed agents and registered brokers:
“If you have doubts about the person claiming to be an insurance salesperson, find out if they are legitimate,” the IBC says. “Check with the Financial Services Commission of Ontario (for agents) or the Registered Insurance Brokers of Ontario (for brokers) to verify their status.”