Little Frauds, Big Frauds, Cost and Risk

Have you ever bought a stolen car? Are you sure? If you leave your car or truck running unattended and it gets stolen, in addition to the insurance costs and headache, did you know that vehicle could end up financing terrorism?

It sounds extreme, but I kid you not, vehicles from North America have been used in car bombings, and export of stolen cars has become big business with whole shipping containers full of luxury vehicles with Ontario license plates turning up in places like Ghana and Lebanon.

And those are just the big, blatant cases that are making your insurance premiums soar. Back to that cheap car you found on Kijiji or Craigslist – how do you know for sure it isn't stolen?

Related:
Top 10 Stolen Cars in Canada
Why People Commit Fraud
Stories From the Insurance Fraud Capital of Canada
On the little fraud front, opportunistic scams and inflated claims work a number on the premiums we pay too. We wrote about Project Whiplash earlier – where 37 people were arrested and charged for various counts of fraud, forgery, and falsification of documentation related to 77 staged collisions. The Insurance Bureau of Canada (IBC) estimates that insurance companies paid out over $4-million in claims related to this particular investigation alone.

Those at the low end of the totem pole in that scam were likely less part of the organized crime contingent, and more along for the ride, so to speak, because the opportunity to make a quick dollar presented itself.

The same happens on an even smaller scale every time a health claim is inflated, either by the clinic you visit or by the insured themselves. Here's an example that I suspect is not all that uncommon: Many years ago I threw my back out. I lived alone in the city, had no car and needed to be at an event later that day. I literally could not walk in any posture except a complete stoop.

I went to the nearest physiotherapy clinic, signed the forms and got the treatment I needed. At one point, a woman came in, told me she was going to rub lotion on my back, did just that, and then left. The whole transaction took less than four minutes. The clinic billed my insurance company for massage therapy.

Related: Why People Commit Fraud (Check this one out - it includes a lot of good links.)

"I think the public doesn't take into consideration a lot of the opportunistic fraud – the exaggeration of a claim. We all pay for that, and we're seeing our premiums increase significantly in Ontario," says the IBC's vice president of investigative services, Rick Dubin.

Back in the realm of driving, a You Tube video recently showed one car purposely reversing into another at a stop light. The driver got out and demanded money to go away.

"Be aware of those scams where someone sets you up for a staged collision in the search for some quick cash," says Dubin. "If someone approaches you with that, pick up your cell phone, and call the police immediately to come to the scene. They'll investigate it."

As for the used car purchase, he recommends people do a lot of due diligence before making the trade. Run the vehicle identification number with companies like CARFAX or CarProof to get the vehicle's history. Complete your paperwork too – other scams involve the fraudsters buying used cars, then turning around to report them stolen to insurance companies, before exporting them to another country.

Related: Top 10 Stolen Cars in Canada

Lock your car too, and don't leave it running while you run in for a coffee. "No point in having an immobilizer if you're going to leave it running in the driveway," he says.


Kate McCaffery is a freelance writer, editor and former urbanite, now living somewhere in between the lake, the ski hill and some farmer's cow path. mccaffery.ca/kate2.0/ for more information.

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