Posts Tagged ‘fake accident’

Suspicious accidents, PIP claims soar in Florida, National Insurance Crime Bureau says

Tuesday, June 29th, 2010

The number of suspicious auto accidents that were staged or deliberately caused by criminals in Florida has increased dramatically in the past year, according to the National Insurance Crime Bureau (NICB). The independent organization said on June 29, 2010, the number of questionable claims submitted to its insurance company members shows a 58 percent jump from 2008 to 2009.

This comes to no surprise to those of us at United Automobile Insurance Co. (UAIC) who fight insurance fraud every day. We see fake accidents and fake injuries all the time.

The report, shows the following trends in Florida:

  • Tampa had 487 questionable claims related to staged or caused accidents in 2009, a 290 percent increase over the previous year.
  • Miami had 258 questionable claims, an 11 percent increase year to year.
  • Orlando had 240 questionable claims, a 24 percent increase.

South Florida was the hotbed of staged crashes, according to the bureau. While the Miami and Hialeah areas continue to show increased activity, criminals have moved north and Tampa Bay is now the center of this crime trend.

The number of questionable claims for all insurance fraud increased 15 percent from 2008 to 2009 in Florida. But the 58 percent jump in the staged accident category shows that criminals are taking advantage of the state’s no-fault auto accident coverage, the bureau said. Florida had the highest rates of fraud in both bodily injury and personal injury protection among states with no-fault insurance.

We have been telling legislators, regulators and law enforcement officials for years that Florida is the epicenter of PIP fraud. Now we have the numbers to back that up.

To combat the problem, the bureau created a task force in South Florida in 2002. The success of the program pushed criminals to Tampa and Orlando areas. Staying in pursuit, the bureau will soon open another major medical fraud task force in Tampa.

The bureau has launched a public awareness campaign in the Tampa Bay area, using billboard and bus shelter ads, as well as radio spots to urge people who suspect a staged accident scheme to call 1-800-TEL-NICB or text their information to TIP411, keyword “fraud.”

We urge every driver in the Tampa Bay area and around the state to report fraud when you see it. You will be bringing criminals to justice and could see your insurance premiums drop if we all do enough to stamp out fake claims.

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Staged accidents put Florida at top of scammer list

Friday, June 25th, 2010

It comes to no surprise to us that Florida leads the nation in phony accident claims. The National Insurance Crime Bureau says that these types of rip-offs increased 46 percent between 2007 and 2009.

Florida was the leader with 3,006 staged accidents over the two-year period. Tampa was the worst city for fraud, followed by Miami and Orlando.

The Miami CBS affiliate reports that the problem is huge in South Florida. The video report shows how unsuspecting drivers can become victims of fraud.

And the South Florida Sun-Sentinel quoted the NICB report as saying, “Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected.”

We have long been suspicious of these type of accidents, and of the claims filed by medical service providers. As we previously reported, people will recruit insured drivers to fake accidents so that bogus Personal Injury Protection (PIP) claims can be filed. In these cases, the people involved never suffer any injury and never see a doctor or receive medical treatment.

The rise in staged accidents means insurance premiums are also going up. Insurance companies like ours must pass along the costs to safe, honest drivers. Part of the solution is stronger law enforcement. This year, the Florida Department of Financial Services worked with NICB and local police to arrest 27 people who were charged in faking accidents and medical claims.

The other step that’s needed: legal reform. The Florida legislature must make it harder for drivers and medical clinics to set up phony schemes. And the state must eliminate the financial incentives for plaintiff attorneys to sue when claims are not paid. Right now, the clinics and attorneys have all to gain and little to lose when an insurance company challenges their claims. Until there are strong deterrents to fraud, Florida drivers will continue to pay for drivers, clinics and lawyers who cheat.

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Tampa arrests inside look at PIP fraud

Wednesday, April 28th, 2010

Thank you to the Hillsborough Sheriff’s department for telling the public what automobile insurers know: Staged accidents are a huge source of insurance fraud.

Undercover agents broke up a ring of at least 55 people on April 21, 2010, with arrests relating to staged accidents, insurance fraud and racketeering. Based on what we have heard about widespread fraud in the Tampa Bay area, more investigations and arrests are needed.

Personal Injury Protection (PIP) fraud is a huge problem, not just in Tampa Bay, but across the state. Drivers pay hundreds of dollars more in insurance premiums to cover medical claims that either overstated or outright fraudulent. State legislators need to take action to protect drivers, the courts and insurers from fraudulent PIP claims and baseless lawsuits. There should be funding for investigations that uncover phony medical clinics, recruiters for faked auto accidents, and the attorneys who file unfounded lawsuits on behalf of the clinics.

In announcing the arrests, the Sheriff’s office gave the media an inside look at how these rings operate, complete with a video of a staged accident.  Here is a summary from the Tampa Bay Tribune’s article:

“Deputies released the video, showing an SUV and a car pulling into a parking lot at night. The SUV parks; the car stops behind it. The driver gets out of the SUV and walks to the driver’s side of the car.

After a short conversation, the driver returns to the SUV. The car then positions itself and the SUV drives away. Three people get out of the car. The car parks and the driver turns off the headlights and gets out.

Almost immediately, the SUV drives toward the car at a high speed, and strikes it on the driver’s side. The SUV drives away and the four people get back in the car.”

The arrests follow another crackdown by federal, state and local authorities that involved a Tampa Bay treatment clinic. Our company and every other auto insurer in Florida can document that almost identical criminal activity takes place across the state. It’s time to stamp out PIP fraud with more arrests and fewer economic incentives to try to rip off Florida insurers.

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Florida’s CFO steps up fight against PIP fraud, staged accidents

Monday, March 22nd, 2010

Just how prevalent are phony car wrecks? Just ask Alex Sink, Florida’s CFO, who caught 19 suspects in Florida in just one week. Her Division of Insurance Fraud has found staged accidents in every corner of the state.

If Sink could conduct a sweep every week, she would probably have 1,000 suspects or more in custody. Staged accidents are just the first step in an illegal scheme that starts on the streets and ends in the courtroom. The people paid to fake car crashes are sent to health clinics that in turn send phony medical bills to car insurance companies for personal injury protection (PIP) benefits.

When insurance companies fight back against fraud, the health clinics and their attorneys go to court. The plaintiff lawyers charge as much as $500 an hour for filing paperwork in claims that can be for less than $2.

Since July 2009, state investigators have arrested 259 people for PIP fraud, culminating in 156 convictions, Sink says. Insurance fraud is a third degree felony, punishable by up to five years in prison.

According to Sink’s Division of Insurance Fraud, PIP fraud is the most reported type of fraud, accounting for 30 percent of all referrals received in fiscal year 2008-09. The division made over 830 insurance fraud-related arrests in the same fiscal year.

The division has seven fraud squads dedicated solely to investigating PIP fraud across the state. These squads are in the division’s central and South Florida regional offices where PIP fraud is most prevalent. Each squad works in cooperation with local law enforcement and consumer groups.

In the latest sweep, Sink’s squads nabbed suspects across the state:

  • Fort Myers (4 arrests)

  • Orlando (3)

  • Pensacola (1)

  • South Florida (8)

“Staged accidents put every Floridian at risk, both physically and financially,” Sink said in a press release. “I am taking aggressive action every day to get these scammers off our streets and behind bars where they belong.”

You can do your part to fight PIP fraud and protect law-abiding drivers, some of whom are victims in staged accidents. If you suspect insurance fraud, call CFO Sink’s Fraud Fighters Hotline at 800-378-0445 or visit www.MyFloridaCFO.com/fraud.

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Police investigation exposes staged car crashes

Tuesday, March 16th, 2010

Staged car crashes are big business. Just ask Josue Baez of Tampa. The 23-year-old told investigators he was paid $500 to pretend to be a crash victim and was promised $10,000 when a lawsuit went through.

His faked accident, which led to an arrest and guilty plea, was one of hundreds in Florida in 2009, say authorities trying to crack down on staged car wrecks.

The accidents have only one purpose: to rip off insurance companies. Crime rings see an easy way to make money through Personal Injury Protection (PIP) coverage.

About 30 percent of the roughly 12,000 complaints to Florida’s state insurance fraud division in 2009 were for PIP fraud, Alex Sink, the state’s chief financial officer, told the Tampa Tribune.

Here’s how the fraud works, according to investigators: A person offers cash to individuals to stage a car accident. The same person directs the individuals to a specific health clinic for diagnosis and treatment, even if there are no injuries.

The clinic files PIP insurance claims that can total more than $10,000 per person, the legal limit for PIP coverage. A clinic can make millions of dollars per year filing claims, Captain Steven Smith of the state Division of Insurance Fraud told the Tribune.

In some instances, the supposedly injured individuals sign over their legal claims to the clinic, which then sues the insurance company. Their attorneys earn as much as $500 an hour for filing legal paperwork on these fraudulent claims.

Drivers pay $200 to $300 per year in higher insurance premiums because of fraudulent claims, Amy Moore, a spokesperson for Allstate, told the Tampa Tribune.

UAIC is committed to getting PIP premiums under control. The company cannot do it alone and neither can law enforcement officers at state and local levels. Florida needs court reform and laws that remove the financial incentive for fraud. And those that abuse the legal system need to be punished.

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