• Insurance Investigation

  • Private Mortgage Insurance Fraud

    Fraud in its simplest form is deliberate misrepresentation and deception: One party deceives another by misrepresenting information, facts, and figures. So, mortgage fraud is not just predatory lending practices that target certain borrowers.

    Housing or mortgage fraud can be committed by individuals who intend to occupy a property as a primary residence or by groups of investors who defraud via rental properties or commit appraisal fraud when flipping homes.

    According to the Federal Bureau of Investigation (FBI), it is any sort of "material misstatement, misrepresentation, or omission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase, or insure a loan." With this working definition, we see that mortgage fraud can be committed by both individual borrowers and industry professionals. And the sums involved are high. For example, in Sacramento, Calif., seven people were convicted in a $10 million mortgage scam in early 2019.

     

    Workers Compensation Fraud

    Accidents can happen in the workplace. When an employee gets a work-related injury or illness, your business could be on the line. Workers’ compensation insurance protects you by reimbursing employees when accidents take place. But, employees, employers, and even health care providers can take advantage of the system by committing workers’ compensation fraud.

    Workers’ comp fraud can lead to higher insurance premiums and penalties, so it’s important to know how to protect your business and avoid costly mistakes.   

    Life Insurance Fraud

    Many people don’t realize it, but life insurance fraud is a serious crime with potentially serious consequences. It’s surprisingly common, and it’s more difficult to get away with than you might think. It’s very important to know what the law is surrounding life insurance so that you don’t commit fraud unintentionally. Insurance agents can also commit fraud, and it’s important to be aware of it as a customer so that you can report them if it happens. Here are the most common types of life insurance fraud and the potential consequences that you need to watch out for.

    Health Care Insurance Fraud

    In this type of fraud‚ false or misleading information is provided to a health insurance company in an attempt to have them pay unauthorized benefits to the policy holder‚ another party‚ or the entity providing services. The offense can be committed by the insured individual or the provider of health services.

    An individual subscriber can commit health insurance fraud by:

    • allowing someone else to use his or her identity and insurance information to obtain health care services
    • using benefits to pay for prescriptions that were not prescribed by his or
      her doctor

    Health care providers can commit fraudulent acts by:

    • billing for services‚ procedures and/or supplies that were never rendered
    • charging for more expensive services than those actually provided
    • performing unnecessary services for the purpose of financial gain
    • misrepresenting non–covered treatments as a medical necessity
    • falsifying a patient’s diagnosis to justify tests‚ surgeries‚ or other procedures
    • billing each step of a single procedure as if it were a separate procedure
    • charging a patient more than the co–pay agreed to under the insurer’s terms
    • paying “kickbacks” for referral of motor vehicle accident victims for treatment

     

    Automobile Insurance Fraud

     

    1. Vehicle dumping, aka "owner give-up"

    This type of car insurance fraud occurs when the owner disposes of the vehicle by leaving it somewhere, burning it, dumping it in a lake, or even selling it, and then claiming it was stolen.

    In situations where the car was sold before being reported stolen, the fraud is intended to pay in 2 ways: through an insurance settlement to replace the stolen vehicle and through the sale of the original car.

    2. False registration

    Where you live affects what you pay for car insurance, and this car insurance scam is designed to mislead insurers and avoid higher premiums.

    Drivers who partake in this scam often live in expensive parts of the country or in neighborhoods with higher theft rates, so they register their cars in other states or counties where insurance premiums can be lower.

    3. Exaggerated repair costs after a car accident

    This one is committed by less-than-upstanding repair shops. Let's say you bring your car to the shop after an accident, and the mechanics use shoddy parts to make the necessary repairs. By repairing your car with cheaper, possibly unsafe parts and billing your car insurance company for new parts they never used or work they never performed, they're committing fraud for financial gain.

    Body shops can also commit exaggerated repair cost fraud by overcharging an insurer (and a customer) for necessary repairs. By purposely overstating the accident damages, the shop can make money after unneeded repairs.

    4. Faulty airbag replacement

    This is another type of car repair scam. It happens when mechanics don't replace the airbag after an accident. Instead, they stuff the compartment with other objects, such as beer cans (yup, you read that right) or packing peanuts to keep the sensors working.

    Some states, like California, passed protective laws regarding airbag replacement. Replacing an airbag with a fraudulent one can be penalized by a year in prison and up to $5,000 in fines.

    5. Faulty windshield replacement

    Windshield fraud can take unsuspecting drivers by surprise. Usually, someone claiming to be a windshield repair specialist will approach you in a parking lot, trying to convince you that your windshield is damaged and you need a new one ASAP. But good news: you're in luck because this friendly expert just so happens to have your type of windshield on hand. And it gets better because this service will be completely covered by your insurance company. Yep, you won't even have to pay a dime. You better take advantage of this now, right?

    Wrong. This is a scam that may drive up your car insurance rates and possibly put you in danger. These people aren't the real deal and will most likely replace your perfectly fine windshield with a shabby one. You might even lose your car insurance coverage if you fall for this type of scheme, especially if this "specialist" uses your insurance information to submit several windshield replacement claims under your name.

    Property Insurance Fraud

    Possible motivations for this can include obtaining payment that is worth more than the value of the property destroyed, or to destroy and subsequently receive payment for goods that could not otherwise be sold. According to Alfred Manes, the majority of property insurance crimes involve arson. One reason for this is that any evidence that a fire was started by arson is often destroyed by the fire itself. According to the United States Fire Administration, in the United States there were approximately 31,000 fires caused by arson in 2006, resulting in losses of $755 million.