Crooks, cons & criminals: the 2019 Insurance Fraud Hall of Shame


Insurance Fraud Hall of Shame banner

Insurance fraud is one of America’s largest crimes — at least $80 billion is stolen each year. Why should you care? This is a crime that you pay for in the form of higher insurance rates, for one thing. And often, the fraud includes theft, scams, staged accidents, and even violence. According to the Insurance Information Institute (III), this is who commits insurance fraud:

  • organized criminals who steal large sums through fraudulent business activities,
  • professionals and technicians who inflate service costs or charge for services not rendered
  • ordinary people who want to cover their deductible or view filing a claim as an opportunity to make a little money.

Insurance fraud is a crime and police and insurance investigators fight back. It’s punishable by fines, jail and permanent criminal records. Unfortunately, sometimes the general public thinks of it as a petty or victimless crime. III says:

“Public attitudes have sometimes hampered insurers in their fight against fraud. Studies suggest that some portion of insurance fraud committed by consumers is driven by revenge or retaliation for a personal service exchange which they think is unfair. People may retaliate in order to “get a return” or “get their money’s worth.”

Understanding the scope of the crime and the ways that it affects all of the honest folks who pay for this crime can educate and help to change attitudes.

The Coalition Against Insurance Fraud works hard to educate the public about how insurance fraud is not a minor or a victimless crime.  Every year, they profile some of the worst crooks, cons and criminals from the prior year in the Insurance Fraud Hall of Shame. Here are some of the worst fraudsters in 2019:

  • A Tallahassee man pushed his friend out of a fishing boat and told authorities alligators must have gotten him. In reality, he had shot his friend in the face as he tried to climb back in the boat and then buried his body. It turned out he was in cahoots with the deceased man’s wife to collect $1.75 million in life insurance.
  • A NY chiropractor was at the heart of a “slip and fall” shakedown ring that bilked businesses and their insurers out of $32 million for bogus injuries.
  • A wealthy Miami executive ran dozens of corrupt skilled-nursing and assisted-living facilities that raided taxpayer-funded Medicare and Medicaid to the tune of $1.3 billion.
  • An heiress, socialite and political fundraiser made $20 million of false damage claims after fire in her family’s 5,600-foot mansion in the Philadelphia suburbs. To add insult to injury, she falsely blamed volunteer fire fighters who fought the fire of stealing $10 million in jewelry.
  • A Boston-area trolley driver was badly beaten up by a masked criminal on Halloween and collected workers compensation and long-term insurance to cover his injuries. Investigators later tracked down the mugger who turned out to be friend of the driver who had helped stage the “crime.”
  • There are more: A Pennsylvania man who died of burns when his home arson scam went wrong. A corrupt rehab network that forced desperate addicts to relapse in a $100-million plot to milk insurers in Pennsylvania. A staged workplace slip and fall that was caught on camera and then went viral. A $2.1-billion transnational crime ring that targeted seniors.Read more about detail about the stories of the 2019 inductees in the Insurance Fraud Hall of Shame.

 

Posted in Fraud

Tax scam season: Be on high alert for these fraud schemes


worried man taking a tax scam phone call

From now through April 15, it’s the top tax scam season. Not that tax scams only happen in the first few months of the year, they can occur year-round. But criminals know that taxes are on your mind and they will try to take advantage of that.

Be alert for tax-related identity theft
With the frequency of large-scale data breaches, there’s a better than average chance that your personal information has been breached. Your data may even be in the hands of criminals, making you susceptible to identity theft. You may not be aware of this at all until you get a notice from the IRS about a tax filing that you never made. When you look into it, your realize that it is not just a mistake – you are the victim of a crime.

The IRS says that it’s not uncommon for identity theft victims to be unaware that they are compromised until they run into some type of tax problem or tax alert.

Here are warning signs that that the IRS says may indicate that you are a victim of tax-related identity theft:

  • You get a letter from the IRS inquiring about a suspicious tax return that you did not file.
  • You can’t e-file your tax return because of a duplicate Social Security number.
  • You get a tax transcript in the mail that you did not request.
  • You get an IRS notice that an online account has been created in your name.
  • You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
  • You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
  • IRS records indicate you received wages or other income from an employer you didn’t work for.

The IRS offers steps to take if you are a victim of tax-related identity theft, a data breach or employment related identity theft in their Taxpayer Guide to Identity Theft.

Phone impersonation and other common tax scams

Tax-related identity theft is only one type of season tax crime – be alert for these “usual suspects” that the IRS has identified as some of the most common scams:

Impersonation Telephone Scams – The IRS won’t call you to demand immediate payment via a debit card or gift card. They won’t send the police to your house to collect a debt or arrest you. See: How to know it’s really the IRS calling or knocking on your door

Impersonation email scams – the IRS does not send unsolicited emails.

Fake calls from Taxpayer Advocate Service numbers – spoofed calls from criminals  posing as IRS assistance services trying to extract personal information.

‘Ghost’ tax return preparer “Tax Transcript” email scam –  Don’t get caught by a phony tax prep scammer or promises to get your you refunds sooner.

A new version of a Social Security scam – A criminal poses as the IRS and threatens to cancel your SS number.

Check out our other fraud posts for more alerts on scams and tips to stay safe.. And here are more tax season tips from prior years:

Quick best practice tip for your 2020 financial and legal documents


young woman signing a financial document with two other people watching

It’s a new year – time to get in the habit of changing the year that you use when you write a quick check or date documents. But there’s another habit you should alter this year, according to police and other crime experts: write out the full year of 2020 in your handwritten dated documents, not just the abbreviated ’20. Failing to write the full year of 2020 might open you to costly fraud.

While it’s common to date documents in this format – 1/7/20 – the unique nature of this year’s date makes it too easy for a fraudster to change the year by simply adding more digits on the end. So your check or contract dated 1/7/20 could easily be altered to backdate it to 1/7/2019 or date it into the future as 1/7/2021.

Elizabeth Whitman of Whitman Legal Solutions talks about this in her article Will Abbreviating 2020 on Legal Documents Make You Vulnerable to Fraud?

She talks about why someone might do this, using an example of vintage violins with label changes that made the instruments older and consequently more valuable than they were. While labeling fraud on vintage musical instruments may not be something you have to worry about, she offers examples of why it might be worth your attention:

“Those who warn against abbreviating 2020 theorize that a scammer could backdate a document, such as a promissory note, to 2019. After that, the scammer could try to collect an extra year’s interest on the loan.

Commentators express similar concerns about postdating–that someone could change the date to try to cash a stale check. Or, they could try to force performance of an expired contract by make it appear that the contract was signed later than it was.”

Some say this fear might be overblown, that in prior years scammers might have altered dates on any two-digit year — but that just reinforces the importance of using a 4-digit year on written legal and financial documents – why take the risk? Whitman notes that while a consumer may be able to ultimately prove the fraud, that might entail an expenditure of time and money. Whitman says that although the risk of using an abbreviated date might be minimal, “it also doesn’t hurt to use the full year in a document signed in 2020–or in any other year.”

Her article also offers an handy list of document signature best practices, such as using a digital signature when possible, signing in blue ink, maintaining time-stamped paper copies and using dated cover letters – read more about these suggestions in her post.

Forged, altered or fake paperwork is a real thing – see our prior post on title washing scams that occur in used car purchases – a crime that costs $30 billion a year! Thieves and scammers are very creative in separating you from your money – a small step like using a 4-digit year in financial and legal documents that would make their job harder seems worth it.

Holiday fraud: How to avoid seasonal scammers


polic lineup with santa, Rudolph the Reindeer and a pretty elf

If it’s December, it’s prime holiday fraud season!

Because it’s the busiest season of the year, scammers work double time to try to maximize their take. And as many times as we’ve issued warnings, thieves are very creative about thinking up sneaky new ways to separate you from your money. The Better Business Bureau is on the case. Here are some of the top scams they see around the holidays.

Delivery scams and package thefts this holiday season – While just plain old theft of shipped packages from your doorstep or workplace is common, there are a few other things to watch out for. BBB says that phishing emails pose as official notices from delivery companies. These either contain a “tracking link” or a message that the shipper is having difficulty delivering a package to you with a number to call. Or they affix fake “missed delivery” tags on your door, asking you to call a phone number to reschedule your delivery – all are just ruses to get your personal information.

Social media ad scams – Last year, the BBB found that online purchase scams were the most common cons reported to Scam Tracker and the category with the most victims, many involving Facebook and Instagram ads. Watch out for products claiming to support charity, free trial offers, counterfeit merchandise and apps of unknown origin. Social media is also a hub for illegal gift exchange pyramid schemes. BBB says these pop up every year with new twists. When an offer seems too good to be true, it almost always is.

Is that Santa App safe? Better check it twice. BBB says that the Apple and Google app stores list tons of holiday-themed apps: children can video chat live with Santa himself, light the menorah, watch Santa feed live reindeer, track his sleigh on Christmas Eve, relay electronic Christmas wish-lists, or play Hanukkah games like dreidel. But many of these are invasive and may violate children’s privacy laws in the information they collect. For more, see our post on protecting your kids from ID theft.

Don’t get scammed out of a gift card this season – the BBB says “Before grabbing a gift card for a favorite store or restaurant, know that thieves are just as eager to use these gift cards before they’re presented to the intended recipient. Also, some retailers have terms and conditions as to how the gift card can be redeemed.” See our post about new consumer protections for prepaid debit cards.

Tips for avoiding job scams this holiday season – Many of us are looking for extra money over the holidays and a part-time seasonal job is a common way to earn that cash. But it’s also a time when scammers exploit that desire. BBB reminds you that legit employers will never ask for payment upfront for a job. They say to be wary of big money for small jobs and job offers that don’t require an interview.

8 Tips for dealing with holiday pop-up shops – BBB receives hundreds of complaints a year about temporary retail locations, reporting everything from poor quality merchandise to difficulty obtaining refunds after temporary stores have closed their doors. Pop-up shops can be fun but follow BBB’s tips in mind if you choose to buy from one of them.

See more holiday safety tips from the BBB and use their Scam Tracker to identify common scams near you.

Here are prior posts about more common holiday fraud schemes:

 

How to avoid rogue tow truck scams


couple watching their car loaded on a tow truck

Bad enough if you are in an auto accident – that’s stressful enough. You might be injured or at the very least, shaken up. Suddenly a tow truck appears on the scene saying they are from your insurance company. While that might seem like lucky timing, it should actually raise your suspicions. High pressure tactics from rogue tow truck operators can lead to exorbitant towing and storage fees or your car being taken to a body shop that is in league with the tower. The National Insurance Crime Bureau recently released a public service announcement to raise awareness about rogue tow truck operators and how to avoid becoming a victim.

NCIB offers these tips:

  • Never give permission to a tow truck operator who arrives unsolicited to take your vehicle.
  • If you or law enforcement did not call a tow truck to the scene, do not deal with that operator.
  • Do not provide tow truck operators with your insurance information.
  • Do not provide tow truck operators with personal lien holder information.
  • Determine that the tow truck signage is identical to what appears on any documentation the tow truck operator provides (they may say they “work with” your insurance company).
  • If the tow truck does not display signage identifying the name of the tow company, ask for company identification.
  • If a tow operator’s legitimacy is in doubt, call the police.
  • Do not give a tow truck operator permission to tow your vehicle until they:
    –Provide a printed price list, to include daily storage fees and miscellaneous charges that will apply if they tow your car (if the prices seem too high, ask the police or your insurance company to call a towing service for you).
    –Provide printed documentation indicating where the vehicle is being towed if it is not a location of your choosing.

The Coalition Against Insurance Fraud offers more information on tow truck cons and scams, as well as extensive tips to for what to expect and what your rights are.

Check out the full article but here are a few tips from their list:

Think ahead: Join an emergency road service club or organization such as AAA. Also know your auto insurer’s roadside assistance program, with the tollfree number printed on your insurance card. They’ll set you up with reputable towing firms and repair shops.

Photos. Take a photo of the scene, including the tow truck. Use your cell phone or a disposable camera stored in your glove compartment.

Complain. File complaints if you’re scammed. Contact your insurer, state insurance department, local Better Business Bureau and the police.

Know your rights. State laws protect you if your vehicle is towed while you were away, such as while shopping. Confirm and complain if you suspect violations of these rules in most states:

  • The property owner or manager of a business that had your vehicle towed must be at the scene and sign the towing authorization in most states;
  • The operator must leave a small sign at the scene. It should have the firm’s name, address, phone, reason for towing, and who requested the tow;
  • Towing firms must take a photo of your vehicle in the “illegal” spot and notify the local police department to ensure the car is not classified as stolen. Get the photos from the towing firm (though expect a fee); and
  • The towing operator must release your vehicle if you will not or cannot pay the requested towing free. This is true in most states, and then becomes a matter for civil courts.