Recently, an I've Been Mugged reader wrote asking what to do. She had been the innocent victim in an auto insurance scam:
"Two days ago, I was surprised to find myself in a situation that I believe is a clever scam. It involves auto insurance and a trumped up claim. Although the situation is still unfolding, and my carrier may not pay once they investigate, I am shaken at being on the business end of such a scheme. I'm afraid to drive. I feel unsafe because this person has my address and who knows what else such a person might do."
While I had heard about these scams, I have never been involved in an auto accident insurance scam. And, I had not thought about an insurance claim scam as also being a potential identity theft risk, too. It stands to reason that if some criminals are willing to stage a bogus accident, intentionally cause a collision, and/or submit bogus medical claims after an accident, then they are also willing to abuse the other driver's personal data.
So, what should a consumer do to protect yourself? What can a consumer do to protect yourself after a staged accident?
First, I did some online research to learn about the types of auto insurance scams. My thinking is that by understanding them, it would be easier to recognize them and not get tricked. The Allstate Insurance page lists the types of auto insurance scams and fraud schemes:
- Swoop & Squat
- Shady Helpers
I am not going to repeat the scam descriptions here. You can visit the site and read them for yourself. Some are intentional collisions. Sadly, criminals will stage bogus accidents or cause intentional collisions. In 2010, Florida led the nation in the number of complaints about insurance fraud related to staged accidents.
Second, I found that auto insurance company websites often provide advice for their policyholders about how to protect yourself, and what to do if you suspect fraud. The State Farm site lists the types of auto insurance frauds and provides instructions for its policyholders:
"To report suspected insurance fraud, call State Farm or the National Insurance Crime Bureau (NICB) hotline: 1-800-TEL-NICB / 1-800-835-6422"
So, if you suspect fraud, you should inform both your auto insurance company and the NICB. I visited the NICB website to learn more.
The NICB, based in Des Plaines, Illinois, is a non-profit organization dedicated to preventing, detecting, and defeating insurance fraud and vehicle theft. The NICB works with more than 1,100 property and casualty insurance companies. The NICB offers an Apple iPhone app for consumers to report suspected insurance fraud.According to the NICB, staged accidents occur in every state in the nation. In 2010, the top five cities with the most staged accidents and related auto insurance fraud schemes were:
- New York, New York
- Tampa, Florida
- Miami, Florida
- Orlando, Florida
- Houston, Texas
And, the top five states were:
- New York
The NICB also describes the types auto insurance scams:
- Swoop & Squat
- Panic Stop
- Drive Down
While at the site, I downloaded the NICB Staged Automobile Accident Fraud brochure (Adobe PDF) to learn more. It sounded to me like the I've Been Mugged reader had experienced a "Drive Down" scam.
The NICB also offers a really good flyer for consumers about what to do after an auto accident. Download the Accident Checklist (Adobe PDF). The NICB advises consumers to:
- Tend to the injured. Call emergency and/or ambulance personnel if needed
- Keep a disposable camera in your auto. Take photos of the entire accident scene, and damage to your car, the other car(s), and any buildings affected. Take photos of all cars' license plates and Vehicle Identification Numbers.
- Notify the police immediately, and call them to the scene
- Get the information (e.g., name, address, phone, insurance certificates) of all other drivers involved, and of any witnesses. Either write down the informaton, or take photos of any documents, especially if the driver is not the registered owner of the other car
- Notify your insurance company immediately
- Don't disclose your Social Security Number or bank account information
If you suspect that others involved in the (staged) accident have abused your personal information or committed identity fraud, file a report with local police and get a copy of that police report. I have used the Identity Theft Resource Center (ITRC) website before, and highly recommend it. The site provides plenty of information and advice for a variety of identity theft and fraud situations. If you suspect other drivers in the (staged) accident are abusing your personal information, then Fact Sheet 110 seems to apply. It makes sens to file fraud complaints with your insurance company and with the U.S. Federal Trade Commission (FTC).
If you are feeling particularly vulnerable, you might arrange a consultation with an attorney to get advice about what to do next. Get an attorney referral from somebody you trust and know. I also visited the websites for several states' Attorney General offices, as these websites often contain advice and resources for consumers. For example, the New York State Attorney General website provides advice for consumers about how to fight auto insurance fraud.
I am sure that some I've Been Mugged readers have opinions or experience with auto insurance claim scams. If you were a victim in a staged auto accident auto insurance scam, what did you do to protect yourself? What resources did you find most helpful?