SGI releases top five insurance fraud schemes from past year

Fraudsters burned when trying to scam their way into thousands in coverage

From a bogus $25,000 loss to suspicious burning vehicle claims that went up in smoke, SGI has released its top five insurance fraud schemes as it marks Fraud Awareness Month.

SGI’s special investigations unit compiled a list of some of its more memorable or interesting cases from the past year. According to the Crown agency, the unit’s sleuthing of suspicious insurance claims saved more than $7 million in 2017.

“Unfortunately, property and automobile insurance fraud is still a reality for every insurance company,” Penny McCune, executive vice-president and chief operating officer of the Auto Fund, said in a release Thursday. “There’s this misconception that it’s a victimless crime and if it hurts anyone, it’s only affecting a big corporation. But insurance fraud means higher insurance rates for you, your family, friends and neighbours.”

Here are SGI’s picks for the top five frauds of 2017:

Deceitful receipts:

A theft claim was made under an SGI Canada property policy for a number of expensive items, including clothing, computer equipment and jewelry. This fraudster provided several receipts to show the value of the items.

While most things added up, one receipt — for an expensive diamond ring — raised concern. The jewelry store was legitimate and the address correct, but a postal code was missing. In its place was a line that read ZIP CODE.

It led SGI’s investigator to an online receipt generator. The format of the online fake receipt was exactly the same as the one provided for the ring. The site was American and wouldn’t accept a six-character Canadian postal code in the five-digit zip code field.

The jewelry store confirmed the receipt was fraudulent and the case was closed, with a total savings of close to $25,000. The customer’s entire claim was denied, and his name is flagged in SGI’s system as a risk. His fraudulent actions could also impact his ability to receive coverage elsewhere.

Data mining:

One vehicle owner dreamt up the perfect story — or so she thought. She claimed someone hit her parked vehicle and then took off, but her vehicle’s on-board computer told a different tale.

Using information downloaded from the event data recorder (EDR), the investigator learned not only was the vehicle moving at the time of the collision, but the collision also happened on a completely different day than the owner initially reported.

Presented with the findings, the vehicle owner withdrew the claim, which would have amounted to $8,000.

Caught on camera:

A claimant said his vehicle was stolen and found damaged near a local business. But SGI’s investigator located a security camera at the scene and reviewed footage from the night of the “theft.” It clearly revealed the owner driving the already-damaged vehicle and parking it in the exact spot it was found.

SGI denied the $14,000 claim, and the vehicle owner was charged criminally

A smokin’ scam:

Police and fire services responded to a call of a burning vehicle. The owner claimed he had no idea who would want to vandalize the vehicle. But the suspicion shifted when a neighbour shared security camera footage, which showed an individual approach the vehicle and tinker under the hood for a few moments before leaving the scene. The video showed the vehicle go up in flames moments later. Further investigation connected the owner of the vehicle to the fire. The owner’s claim was denied, saving an estimated $8,000, and he’s facing criminal charges.

Hot tip exposes arson:

A logging truck broke down on the side of a highway in northern Saskatchewan. According to the owner, they returned later to have it towed and found it completely burned.

Not long after the claim was made, SGI received an anonymous tip that the owner intentionally set the truck ablaze. Examination of the burnt remains revealed evidence the fire was intentionally set. Further investigation confirmed the owner was behind the scam. The tip helped expose a $60,000 fraud. The owner was also charged criminally.

SGI noted such bogus claims make it difficult for the scammers to get coverage from other insurers. In addition, the bill to fix that “stolen and damaged” property or vehicle is now the attempted fraudster’s responsibility.

SGI asks that anyone with information about potential insurance fraud to contact its special investigation unit at siu@sgi.sk.ca or 1-800-667-8015, ext. 6887. To report anonymously, call Saskatchewan Crime Stoppers at 1-800222-8477.