By EMMA BROWN
Special to Focus
It’s hardly an insider secret that insurance companies charge a higher premium for drivers who live in an area with a higher rate of auto accidents, and as Brampton’s population continues to grow an increase in accidents is inevitable, but add to this the high level of insurance fraud that occurs each year in the Greater Toronto Area, and you’ll know why the cost of car insurance is skyrocketing.
Auto insurance fraud costs Ontario drivers $1.3 billion per year, according to a report by the Auditor General of Ontario.
It occurs when criminals submit phony insurance claims for injuries and damage due to accidents that either did not occur, or were staged, then collect financial benefits from insurance companies.
One of the most common types of auto insurance fraud is the ‘staged collision.’
This type of fraud is so pervasive in the GTA, that Rick Dubin, vice-president of investigative services for the Insurance Bureau of Canada has dubbed it “the staged collision capital of Canada”.
These phony accidents can be extremely lucrative, earning fraudsters as much as $50,000 per scam, said Toronto Police Sgt Mike McCulloch.
The Insurance Bureau of Canada (IBC) has recently identified several common types of staged collisions as the following:
• The Drive Down: In this type of collision, the criminal waves a hand or gives some sign to an innocent driver to proceed with a merge or lane change. As the victim changes lanes, the criminal drives into his or her car and then denies that he or she gave any such sign.
• The Swoop and Squat: Here a “swoop car,” driven by the criminal, suddenly speeds up and cuts off the “squat car,” driven by an innocent person or an ally of the criminal. The squat car can’t stop in time and collides with the swoop car. The purpose is to create a relatively minor “fender bender,” although, sometimes innocent people are killed on highways in such incidents. After the collision, the criminals and their allies claim some sort of injury and make an auto insurance claim.
• The SideSwipe: In busy intersections with dual left or right turn lanes, the criminal intentionally runs into a target vehicle if the victim in the inner lane drifts a little into the outer lane.
• The Seat Sales: Here the criminal driver sells the passenger a seat or seats in the car for a percent age of the passengers’ insurance claim. They then fake a collision together, claim the money from the insurer, and share it among themselves.
Unfortunately, for Brampton driver-staged collisions are now on the rise here.
“We have seen this become a problem in the last couple years,” said Det Robert Lusty, a fraud investigator at Peel Regional Police.
“The Americans came down really hard on these guys and they’ve moved north into the GTA, into Toronto and into Peel,” said Lusty.
Staged collisions are part of a type of fraud known as ‘ring fraud’, said Lusty, because of the vast network of criminals involved in carrying them out.
Corrupt drivers, passengers, mechanics, tow truck drivers, rehabilitation professionals, and paralegals all conspire to defraud insurance companies.
“The insurance company pays out for injuries that didn’t occur, for damage that didn’t occur, and the monies are shared out amongst the participants,” said Lusty. “That’s how the money gets from the insurance companies into the pockets of the criminals — they all agree to lie about a collision that didn’t happen.”
There have even been incidences of police officers allegedly involved in these rings.
Last April a Peel police constable from 21 Division was charged in connection with a fraud investigation into three Brampton area rehabilitation clinics after allegations surfaced that the clinics were filing fraudulent insurance claims.
As investigations into staged collisions have become more common, police have learned to identify some obvious indicators; one being an unusually high number of passengers in the cars involved, as more passengers allow for more insurance to be claimed for personal injury.
“If you see two cars in a collision with six people in each car that’s pretty suspicious stuff,” said Lusty.
In these types of situations police will ask the driver the following questions: Who are these people in the car? What are their last names? How long have you known them? Drivers who have been recruited by a fraud ring often won’t know this information said Lusty.
“It boils down to ordinary police work, where you watch, listen, ask the right questions, and it should be pretty obvious to you that there’s something up,” he said.
Unfortunately, would-be fraudsters do not have to be part of a fraud ring in order to try and scam honest drivers.
Brampton resident Jolene Brincat was almost the victim of a phony insurance scam a few years ago when a man lost control of his bike close to where she was driving.
After Brincat had assisted the man safely to the curb, he tried to allege she had hit him with her car.
According to Brincat, the police arrived and found no reason for her to be charged.
“They told me I could counter sue for fraud, but I never did,” she said.
Brincat said she has heard of many similar such cases in Brampton.
“I know of several cases where people are being sued for allegedly hitting someone with their car, when they haven’t even come into contact with them,” she said.
Brincat said that these sorts of phony claims are making Brampton drivers nervous.
“I think people overall are scared of driving here now because of all the lawsuits in Brampton.”
Sam Vancardo also had a similar experience happen to him when the car he was driving slipped on some ice and slightly tapped the car in front of him.
“I rear-ended a car at the intersection at Mackay and Williams Pkwy, but I barely dented their licence plate. There were four people in the car who all claimed whiplash. I had to wait as all these people were slowly removed from the car when the ambulance and fire truck arrived. A couple of them went off on stretchers, but I wasn’t charged,” he said.
Recently, Toronto Police have taken serious measures to combat auto insurance fraud.
Some of these steps include the creation of Project Whiplash.
Project Whiplash — a joint task force with Toronto Police, Insurance Bureau of Canada (IBC) and Financial Services Commission of Ontario (FISCO) — uncovered a multi-million dollar scam ring operating primarily in the GTA’s Tamil community, which led to the arrests of 37 people in February, who now face 130 charges as a result of 77 collisions police said were staged.
Some of the accused worked as paralegals, helping to file false insurance claims, while others operated rehabilitation or medical clinics and are accused of submitting false invoices to insurers.
“The victims of this crime are all of us who operate motor vehicles,” said Toronto Police Chief Bill Blair at the time the arrests were made.
Recently, the provincial government has also taken steps to crack down on insurance fraud.
In 2010 significant changes to the auto insurance system were made in an effort to reduce premiums and make roads safer.
“Those reforms targeted assessment and minor injury costs that have been increasingly getting out of control in the province,” said Scott Blodgett, senior media advisor at the Ministry of Finance.
The creation of an Auto Insurance Anti-Fraud Task Force announced in the 2011 Ontario Budget, seeks to build on those reforms, said Blodgett.
According to the website, the task force will make concrete recommendations to help address fraud; focusing on the areas of prevention, detection, investigation and enforcement, as well as regulatory practices and consumer education.
Last December, the task force delivered an interim report recommending preliminary measures to reduce fraud, and identified several major issues that it will examine in the coming months, including:
• The licensing and/or regulation of health clinics, and other possible gaps in regulation;
• The establishment of a dedicated fraud investigation unit;
• The development of a consumer engagement and education strategy; and
• The creation of a single web portal for Ontario auto insurance claimants.
Finance Minister Dwight Duncan said he looks forward to the task force’s final recommendations next fall.
In the meantime though, honest drivers are still being forced to pay extremely high premiums.
A recent study by The Fraser Institute — an independent Canadian public policy research and educational organization — stated that the average net auto insurance premium for Ontario drivers was the highest in the country at $1,281, compared to Quebec drivers who pay the lowest at $642.
Ramil Madarang, general sales manager at Yorkdale Toyota, said that high premiums are costing him business.
“I deal with situations where people can afford the car, but can’t afford the premiums, and I see this happen everyday,” he said.
Jim McWilliams said he couldn’t believe how much he saved on auto insurance after he left Brampton for Georgetown.
“When I lived in Springdale I had a 2003 VW Jetta,” said McWilliams. “When I moved to Georgetown, I bought a 2004 BMW 325CI. The BMW and house insurance combined was cheaper than the VW insurance living in Brampton, with my parents,” he said.
Colleen Comerford-Hayes also noted a significant drop in her car insurance when she moved to Georgetown, but said she was more excited about getting away from the growing volume of traffic in Brampton.
“I lived in Brampton for 30 years, but it is just so busy now that I feel safer driving in Georgetown.”
— Metroland News Service
By EMMA BROWN