The horrifying things people will do for insurance money


insurance fraud - roundup of perpetrators

Who wouldn’t like a little more money? But most of us have some limits about what we’d do to get extra cash. Not this year’s crop of criminals that the Coalition Against Insurance Fraud named to their 2017 Insurance Fraud Hall of Shame. The criminals seem to get worse every year but, fortunately, the insurance fraud investigators were smart and most of these criminals were dumb, stupidly brazen or both. Here’s a brief summary of a few from the lineup.

Some people will commit murder. Joseph Meyers and his wife wanted money for a new trailer and to jump start a trucking business. To get the money they burnt a disabled friend alive in his home in a foiled attempt to collect $165,000 in insurance. Joaquin Rams was deeply in debt so he killed his own year-old son, hoping to collect $550,000 in life insurance. How’d he get caught? Who takes out nearly a half million dollars in life insurance on an infant?

Others will run drug brothels disguised as treatment centers. Kenny Chatman ran several “sober homes” in Florida – but in reality, he kept residents addicted so that he could bilk insurers of $25 million. He kept some female residents locked up, pimping them out. Some residents overdosed, some died. Chapman was sentenced to 27 years and millions in restitution.

Some people will run dangerous, painful medical scams. Eye doctor Salomon Melgen bilked Medicare for up p $136 million by misdiagnosing and frightening patients into painful, botched laser and needle treatments that often left the poor patients with severe injuries. He treated up to 100 people a day, diagnosing them for expensive treatments whether they needed them or not.

Some people will build elaborate crime rings. Some fraudsters build such large, complex fraud rings, one has to wonder what they might have done had they turned their energy to good rather than bad. Attorney Eric Conn lived up to his name, scamming $600-million in the nation’s largest federal disability ripoff. The flamboyant lawyer called himself “Mr. Social Security.” He bribed a local judge, psychologist and doctors to rubber-stamp disability claims for clients, regardless of their health.

Some people will even crash a plane while in it. Theodore R. Wright III crashed his plane in Louisiana coastline waters to collect insurance money. He had a partner in crime who was with him and who sued for supposed injuries, so they collected on the plane and on the bogus injuries. Because he had recorded part of his crash “ordeal,” he was a media darling and might have pulled it off, but he and his co-criminals got greedy. They also wrecked another plane, a Lamborghini, and a 45-foot sailboat before being found out.

There are a few others that we didn’t cover. Most of these were huge news stories – you can Google names and learn more about any of these crimes. In all but a few cases, the perpetrators exploited trusting people in the commission of their crimes.

There are many, many fraud crimes that don’t reach this magnitude. With luck, you’ll never have friends, relatives or service providers in your life who are so larcenous and cruel. But even if you are not a direct victim of fraud, you pay an indirect cost – we all do. The Coalition reminds us that insurance fraud is an $80-billion national crime wave that is driving up your premium.

Posted in Fraud

Don’t let email scams hijack your holiday!


illustration of thief robbing santa

As seasonal shopping ramps up both on and offline, there are many opportunities for scammers and thieves to separate you from your hard-earned money.  Dial up your fraud awareness radar to the max – particularly when shopping online. Today, we’ll focus on email scams, a favorite tool for crooks. We’ve been monitoring our email spam folders and monitoring news reports to bring you some common scams this year.

Shipping status phishing emails: Be alert for emails telling you to login to check shipping status for recent purchases. This often works because it uses the names and logos of large retailers that you might actually have made a recent purchase from, such as Amazon or Walmart. Or it might be an email pretending to be Fedex, UPS, or another shipping service. Take the time to check these out carefully – did you make a purchase? Look at the information of the sender in the email header – is it legit? Hover over the link to read where it is taking you before you click. If there is any doubt, go back to the site where you made your purchase and check shipping info form there.

Emails using your name. There are many ways that scammers can get your name so that is no guarantee of legitimacy. They can even spoof your email address so that an email looks like it is coming from your own account. Here are some recent scams we’ve see using our name:

  • Cash advance for {your name}
  • Verify this charge to your {name of large retailer} account
  • Are you {your name)
  • We found your missing money {your name}
  • Hey {your name} !! Do You Remember me ?
  • Why did you text me (your name}

Gift card scams. Be alert for emails or phone calls telling you that you’ve been selected to get a $50 card or that you’ve been sent a card. In the last few weeks we’ve had malicious email attempts touting McDonald’s, Kohl’s, Bed, Bath & Beyond, Target, CVS, Apple and PayPal. Some of these mails can look very legit. Here are a few tips to stay safe:

  • Don’t buy gift cards from emails or from online auction sites. If you want to a purchase a gift card, go to the actual vendor site or their offline store.
  • When purchasing a gift card, never give private information such as your Social Security number, bank account number or date of birth.
  • Only use gift cards at the intended sites. If a caller or an online vendor tells you they only accept payments via gift cards, beware. Don’t give anyone gift card claim codes. Also, no reputable vendor or service will ask to be paid in Amazon or Apple gift cards, or any other gift cards.
  • If you purchase a gift card in a retail store, ask the cashier to scan the card to verify that the card actually reflects the stated amount and correct balance.

The TN Department of Commerce & Insurance has a good list of common holiday scams: Letter from Santa? Or is it bait from a scam artist? It’s worth glancing at their list of scams as well as  checking out their tips to stay safe.

Other common email scams and pitches we’ve seen in our spam folder lately that lead to malicious sites:

  • Check you Experian score
  • Letters from Santa offers
  • Instant loans: Get approved for $15,000 Immediately
  • Credit card offers
  • Pain drugs and medical marijuana offers
  • You have been selected for clinical trials
  • Please confirm receipt
  • Free samples

A few common signs of scams:

  • Offers that are too good to be true – they usually are fake.
  • Demands or threats to take action now to avoid consequences; emails saying “Final notice.”
  • Requests to update your information or change your password

Crooks have a lot of tricks and are good at exploiting human weaknesses. Here are a few sites that will help you learn more about current scams and improve your online safety savvy.

 

 

Used car buyers beware: Don’t get hosed by flood-damaged cars


flood damaged cars partially submerged on a street

Used car buyer beware! That shiny used car with low mileage might look like a good deal, but take care that you aren’t buying a flood damaged car. It’s estimated that some half million vehicles were flooded in Texas and Louisiana during Hurricane Harvey, and there are sure to be many more after Irma. Resellers can be pretty good at the cosmetics so you could be deceived – engine and electrical problems may not be readily apparent.

The National Insurance Crime Bureau (NICB) defines a flooded vehicle as one that has been completely or partially submerged in water to the extent that its body, engine, transmission or other mechanical component parts have been damaged.

According to Ronny Pucino, a body shop owner in Rhode Island, there are three main elements in a car that are affected by flooding: the upholstery, the engine and the electronics. The extent of any damage depends largely on the level of water that the car experienced. Cars that have had wheel-top level damage may be able to be salvaged if the owner acted quickly to address the damage. But when water reaches as high as the dashboard, it is more likely that the engine and the electronics have been compromised and the car will be unsalvageable.

Being alert for flood-damaged cars should be of concern to all used car buyers, regardless of geography. Often, damaged cars are professionally refurbished and shipped to other parts of the country to be sold. Experts say that flood-damaged cars end up going to places where consumers won’t be likely to be on alert. Even when cars “clean up nice,” they may well have electrical or engine damage. Flood-damaged vehicles often surface in auctions and “for sale by owner” scenarios.

Edmunds.com offers good tips on how to avoid buying a flood damaged car. They present 6 tell-tale tips, which we’ve summarized, but click on the article for more detail.

1. Get a vehicle history report.
2. Be alert to unusual odors.
3. Look for discolored carpeting.
4. Examine the exterior for water buildup.
5. Inspect the undercarriage.
6. Be suspicious of dirt buildup in unusual areas.

The NICB has released this list of Flood Vehicle Fraud Prevention Tips:

  • Select a reputable car dealer.
  • Inspect the vehicle for water stains, mildew, sand or silt under the carpets, floor mats, headliner cloth and behind the dashboard.
  • Check for recently shampooed carpet.
  • Inspect the interior upholstery and door panels for fading.
  • Check for rust on screws in the console or areas where water normally doesn’t reach.
  • Check for mud or grit in the spare tire compartment, alternator crevices, behind wiring harnesses, around the small recesses of starter motors, power steering pumps and relays.
  • Check inside the seatbelt retractors by pulling the seatbelt all the way out and inspect for moisture, mildew or grime.
  • Check door speakers as they will often be damaged due to flooding.
  • Have a certified mechanic inspect the vehicle prior to purchasing it.
  • Ask about the vehicle’s history. Ask whether it was in any accidents or floods.
  • Inspect the title and ownership papers for any potential or questionable salvage fraud.
  • Conduct a title search of the vehicle.
  • Look under the hood for signs of oxidation. Pull back rubber boots around electrical and mechanical connections for these indicators: Ferrous materials will show signs of rust, Copper will show a green patina.
  • Aluminum and alloys will have a white powder and pitting.
  • Trust your instincts: If you don’t like the answers or the deal sounds too good to be true, walk away!

CARFAX offers more tips for detecting and avoiding flood-damaged cars. They also offer vehicle history reports for a fee, which could be a worthwhile investment if you find a car you’re thinking of purchasing.

One other consumer service is the NICB’s VINcheck, a free service provided to the public to assist in determining if a vehicle has been reported as stolen, but not recovered, or has been reported as a salvage vehicle by cooperating NICB members. You must have the Vehicle Identification Number (VIN) to perform a search, and a maximum of five VINCheck searches can be conducted within a 24 hour period.

DMV.org talks more about VIN checks, offering a diagram showing where you can typically find a car’s VIN. They note that although there are many free VIN services, if you want a detailed report, you may have to pay a fee. We think you should also invest the cost for having a mechanic check over a used car before you buy it. Both steps could be a worthwhile investment to save you from later headaches. A good VIN check can tell you these things about a vehicle:

  • Past ownership.
  • Any liens held on the vehicle.
  • Vehicle maintenance.
  • Title history blemishes.
  • Faulty odometer settings.
  • Flood damage.
  • Accident history.
  • Car title check.
  • Whether a vehicle was determined to be a lemon.
  • Airbag deployments.

Caught on camera: Insurance fraud backfires on scammer


Insurance fraud is a multi-million dollar crime that costs all of us money. This video from the dash cam of a UK driver shows just how brazen insurance fraudsters can be – but fortunately, the woman had a record of the scam on her dashboard camera.

This type of scam is a global phenomenon – here’s a 2015 compilation of comically inept fraudsters caught on camera. They are comical because there is a record. Without the video, some could turn into costly claims.

These criminals are all pretty ridiculous, but don’t be fooled – there are many sophisticated fraud rings that conduct “swoop and squat” and other staged auto accidents. See our prior post Fraud Watch: Staged Auto Accidents for some video examples of four common types of staged accidents.

The Coalition Against Insurance Fraud offers more information on some common staged auto crash scams, along with tips for prevention and what to do if you are involved an accident that seems suspicious.

Dash cams haven’t really taken hold here in the U.S. but if you are interested, here’s an article from Digital Trends that talks about the pros and cons: Take a hint from the Russians: It’s time to protect yourself with a dash cam,

A rogue’s gallery of insurance fraudsters, 2016 style


Insurance fraud is a crime that we all pay for in the form of higher premiums for our home, auto and business insurance. However, 10% of the population still thinks that “insurance fraud doesn’t hurt anyone.” Nothing could be further from the truth! According to the Coalition Against Insurance Fraud, fraud steals about $80 billion a year across all lines of insurance. Yikes. And for some people, the cost is much higher than dollars and cents – if you are unlucky enough to be one of the victims of these criminals, you could lose your identity, your good credit, your life savings, or even your life.

Every year, the Coalition Against Insurance Fraud issues lists a rogue’s gallery of the worst, most egregious insurance criminals from the prior year. Recently, they named 8 criminals to the 2016 Insurance Fraud Hall of Shame. One of the purposes in publicizing the list is to educate and alert you, the consumer, about the scope and type of fraud crimes that are out there.

Here’s a sneak preview of some of their crimes to give you an idea of the severity – you can read the full stories of their crimes from the Coalition Against Insurance Fraud site.

  • Neighborhood blows up in botched insurance arson
  • Epic crash ring braked after $279-million whiplash spree
  • Lawless libido traps cheater in partner-swap comp romp
  • Oh deer! Mob associate uses deer parts to stage car wrecks
  • Samaritan scammer shotguns legs to steal disability insurance
  • Dad murders infant for $750,000 of life-insurance money
  • Bedridden girl starves to death while nurse shops
  • Doctor peddles $60 million of unneeded drugs to poor people

Reporting insurance fraud

One way to combat this type of crime is to report it. Here are some ways to do that.

 

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