Why worry about fraud?

Victims and damage revealed in Hall of Shame

Ok, so insurance fraud steals $80 billion a year.

Impressive number. Helpful to know — though hardly a rousing battle cry.

As a wise person said … Stats are like a drunk using a lamppost — for support, not illumination.

So what makes our blood boil? Let’s look at true-life fraud cases. They show how seedy and sleazy fraud really is. And the innocent people who are damaged by this supposedly victimless crime.

Check out the Insurance Fraud Hall of Shame — the No-Class of 2015. Real cases … real victims … real damage.

Will you be next?

Financially strapped, Mark Leonard tried to burn down his Indianapolis home for $300,000 of insurance money. He blew it — literally. The home exploded, leveling much of the neighborhood and incinerating two neighbors.

Dion Longworth lived next door. He was trapped inside his burning basement, begging firefighters to free him. Too late — Dion was burned alive. His wife Jennifer died when the super-heated insurance blast first crashed into their home.

Gloria Lee tried to burn 28 terrified puppies in their cages at her Las Vegas pet store. Luckily Lee’s own fire sprinklers helped douse the flames in time.

Spine surgeon Dr. Aria Sabit sliced open perfectly healthy people, pretending to operate on their spines. The Detroit doc also botched surgeries of patients who needed spine fusions. All for $32 million of insurance money.

Patients were left disfigured and in permanent pain. Some needed more pain-filled surgeries to correct the damage Sabit caused.

Sure, these are the extremest schemers … the masters of disaster. Yet many more innocent people are being scammed around the U.S. Some more, some less — though victims all.

So why worry about insurance fraud? We all could be next. In fact you already are … higher insurance premiums are draining your bank accounts.

Stay alert and fight back. Let’s all help make insurance fraud a dead-end street instead of a fast road to riches.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Committing insurance fraud is funny, no big deal

That’s the message of crude TV programs

I’m no fan of Fox TV’s The Family Guy. To me, it’s crude, moronic and not very funny. But I recently found myself watching a rerun that featured a plot involving insurance fraud. The three main characters got caught burning down their friend’s financially troubled pharmacy.

They pleaded with the arresting officer to let them go. “Insurance agencies are all scumbags. They deserve to get hurt,” one character says. After thinking about how his health insurer had screwed him, the cop destroys the evidence and lets the trio go on their merry way.

Cringe factor aside, I realize that this is only a cartoon and few people take the messages seriously. Yet, those messages do have an impact. They plant seeds. And over time, as other similar messages pile on, they reinforce the idea that committing insurance fraud is no big deal.

More than five million people watched this episode of The Family Guy when it first ran — the most popular program on TV that evening. The fraud-fighting community struggles to reach five million people in a year with anti-fraud messages.

I was reminded of this episode today when I saw the tweet below from a young woman who wants to secretly push her car off a cliff. How did these ideas form in her head? How can we discourage such destructive thinking?

For one, public outreach needs to be beefed up bigtime. And secondly, let’s keep our young children from watching such crude and socially irresponsible TV programs like The Family Guy. What shows are your kids watching?

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“Looking for tips and pointers on committing insurance fraud”

Having fun with people who tweet about fraud

Most people who go online looking for help in committing insurance fraud probably aren’t serious, but it’s still an opportunity for a teaching moment.

At the Coalition, we troll Twitter at least once a day and finds all kinds of conversations about committing fraud. Some people are seriously seeking co-conspirators while others are just having fun.

Last night we saw a tweet from someone named Addison, whose photo appears to be a young women:

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Pretty straight forward. Rather than judge or condemn people who cheat, we think a better approach is to give them ideas to consider.

In this case, we suggested she set aside a few dollars for bail money:

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Usually, our tweets don’t get a reply, or if they do, they insist they were just kidding. Some Twitterers, though, say nasty things about us.

In this case, Addison retweeted our reply! She obviously thought it was funny.

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Thus, Addison received a subtle message about the seriousness of committing fraud and so did her 275 followers. In a small way, we hope this warns the online world that committing insurance fraud is a lousy idea that can lead to big trouble.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Consumer education key to combating home contractor fraud

New book gives homeowners step-by-step details on dealing with contractors

contractor bookThis time of year historically has not been kind to insurers and property owners. In the past we have seen Hurricanes Andrew and Katrina as well as Superstorm Sandy wreck havoc on everywhere from South Florida, the Gulf Coast and the Jersey Shore, New York and Connecticut. This year we have the Napa, California earthquake, plus tornados and hail storms in the Midwest.

These and other events underscore the importance of helping homeowners prevent becoming victimized a second time by crooked contractors. Many of these fraudsters are fly-by-night operators who prey on vulnerable property owners desperately wanting to get their lives back to normal again.

The Coalition partners with insurers, consumer groups and government agencies in targeting shady contractors. We support strong legislation giving consumers the ability to rescind a contract if the repairs are deemed unnecessary by their insurer. The contract also must clearly state that the consumer has the right to rescind the agreement within a specified number of days.

We also want to make sure that contractors do not act as unlicensed adjusters to 
act as a “go-between” with the homeowner and their insurer, as well as stopping adjusters from acting as contractors for the repair. Contractors also should be penalized for offering any inducement including waiving an insurance deductible to get a consumer to sign a contract.

Anti-fraud legislation helps a lot, but just as vital is public education. Consumers need to equip themselves with information on preventing contractor fraud — and that needs to happen long before the loss occurs.

A good place to start that education is with a just-published book, Don’t Even Think About Ripping Me Off. It’s a step-by-step guide to help consumers navigate the often-confusing process of dealing with contractors and home repair.

The book was published by Phae Moore, executive director of the National Center for the Prevention of Home Improvement Fraud, who became an advocate after her grandmother was badly victimized by a shady contractor.

The books makes for a good gift, especially for seniors and young homeowners. Insurance professionals should also consider distributing the book to their policyholders and clients. You can order the book online at NCPHIF’s website.

I have one on my bookshelf. Shouldn’t you?

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Sandy victim in New Jersey beats shady adjuster in court

Jury rules against Texas adjuster for charging thousands for doing no work

Soon after Megastorm Sandy struck New Jersey in October 2012, unsavory contractors and public adjusters began coming out of the woodwork to reap the riches from stricken homeowners and their insurance companies.

While most contractors and adjusters are honest and honorable, natural disasters tend to bring out the ethically challenged ones, even some that are unlicensed and from far-away states.

That’s a reality that resident Mike Kramer lived through for the last year or so as he battled a Texas-based public adjuster who showed up at his doorstep after the storm. The surge from Sandy brought two feet of water into Mike’s bay-front summer home in Harvey Cedars, N.J. An affable and convincing salesperson used the typical sales line that Mike was apt to get a lot more out of his insurance company by hiring a public adjuster.

Having neither the experience of a major loss nor working with a public adjuster, Mike signed on — even though his insurer already had given him a $12,000 check as a down payment on his claim.

Months passed, the water receded and soon the insurance company paid the remainder of the claim — a total of $80,000. Mike began to rebuild. Then a bill for $10,700 from the public adjuster showed up in Mike’s mailbox. He refused to pay.

“There was no evidence that the public adjuster did anything to help settle my claim,” Mike told me in a phone interview last week.

The public adjuster sued Mike, telling him that he’d better pay up because it would cost him more to hire a lawyer to fight the suit. Little did the public adjuster know that Mike had a good friend who was an ace attorney and who was just as outraged over the public adjuster’s arrogance. He took Mike’s case pro bono.

The drama played out last week in a New Jersey courtroom.The adjuster couldn’t produce any evidence that he did any work on Mike’s behalf. In fact, he apparently didn’t even send Mike’s insurer a letter of representation. Still, Mike did sign a legal contract to pay.

But that didn’t matter in the end. The jury decisively ruled against the adjuster, dismissing his suit. In effect, the jury said “Don’t come into our state, make promises and take advantage of people by failing to do any work.”

Mike also hopes others will learn from his experience. He’s posted a YouTube video, advising storm victims to:

• Don’t sign on with a public adjuster until after you’ve received a settlement offer from your insurer. Know that you have up to a year to negotiate a claim with the insurer.

• Give the insurer adequate time to fully respond to your claim. That could take months during a significant weather event. Hire a public adjuster if the insurer doesn’t respond to your claim.

• If you sign on with a public adjuster, request weekly updates with time sheets and e-mail logs to ensure the adjuster is working on your behalf.

Good advice — and a warning to would-be scammers.

Note: For more tips on avoiding scams by public adjuster, visit the consumer section of InsuranceFraud.org.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Arson dogs sniff tiny clues in blackened rubble

Trained canines’ acute sense of smell exposes insurance arsons

The bronze statue stands proudly. A firefighter gazes down on his devoted arson dog. Depending on what you see, they’ve just finished an investigation or are ready for action.

But one thing is clear: The statue signals the close bond between these highly trained canines and their handlers.

The national memorial to America’s four-legged fraud fighters was unveiled outside of Engine Company 2 in downtown Washington, D.C. recently. It’s a tribute to the unique skills that arson dogs bring to investigations of burned-up buildings.

These dogs and their handlers carefully comb the rubble. The pooches sniff for clues that validate an honest insurance claim or expose a fraudulent one. Or maybe the fire was an act of vandalism, or a hate crime.

Key is the dog’s ability to detect accelerants such as gasoline or lighter fluid that fraudsters typically use to start fires. Dogs have a remarkably keen sense of smell. They can detect the smallest clues buried deep in smoking, black rubble.

A canine’s sense of smell is 100,000 times more acute than a human’s, says research. We might notice if a teaspoon of sugar was added to our coffee. Your average dog can detect a teaspoon of sugar in a million gallons of water, or two Olympic-sized pools worth.

Fraudsters often set several fires in a building. They also might just splash accelerant on the floor, or spill a trail and light it.

Arson dogs can discover these clues, which suggest an abnormal spread pattern or startup point of flames. The pooches signal their handler when they find a clue. Samples then go to the lab for tests that might signal an arson for insurance money or another cause.

The memorial was co-sponsored by Coalition founding member State Farm, and the American Human Association. State Farm has long sponsored the acquisition and training of arson dogs for law enforcement agencies around the U.S.

The insurer’s program has put more than 325 dogs and their partners to work in 44 states, the District of Columbia and three Canadian provinces. In fact several State Farm-sponsored dogs and their handlers in uniform attended the unveiling.

The statue was created by a Colorado firefighter named Austin Weishel. The whole memorial concept was the brainchild of Jerry Means, an arson investigator with the Colorado Bureau of Investigations. The dog in the statue is modeled after his arson pooch.

These canines have helped put thousands of arsonists in jail and made America a safer place. Insurance arsons steal millions of dollars a year. Firefighters and innocent occupants of the building also are injured and even killed. Arson dogs help bring the arson criminals to justice.

Fittingly, man’s best friend is an arsonist’s worst enemy.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Masters of disaster inducted into Hall of Shame

No-Class of 2012 helps brand fraud as a socially deviant crime

HOS_blogCalvin Jones set a Detroit office building on fire for an insurance payday. The structure collapsed onto firefighters caught inside. Seven were seriously injured, including one who was paralyzed.

It’s best to don hazmat suits before reading about the eight extreme schemers like Jones who were elected to the Insurance Fraud Hall of Shame.

The Hall of Shame annually dishonors the year’s most brazen, vicious or plain klutzy convicted insurance criminals. These are the year’s barons of bleak.

Their induction into the No-Class of 2012 puts a human face on this supposedly victimless crime. It helps brand insurance fraud as a costly and socially deviant offense by detailing true-life cases — and the damage these masters of disaster cause.

All were convicted or had other legal closure in the last year.

Read the full Profiles of Discourage at the online cellblock — but buy smelling salts and avoid heavy meals before visiting. Here are several hints of things to come…

Crooks fingered. Two cohorts sliced off a mentally disabled man’s hand with a tree-trimming saw to collect more than $670,000 in insurance money. Porky Weaver trusted one cohort like a father figure, who exploited that friendship in a crime that Porky only dimly understood.

Airbag con deflated. Dai Zhensong tried to flood the U.S. with useless knockoff Chinese airbags from his base in Chattanooga, Tenn. He thus exposed innocent motorists to potential death or injury during crashes. Several of his airbags spewed flames and shrapnel at crash dummies in federal tests after Zhensong was busted. Crooked body shops and others typically install such knockoffs but charge insurers full price.

X-rated park romp. Modupe Adunni Martin said she had a bad ankle injury and started collecting workers comp money. But surveillance caught her strolling out of the doctor’s office without crutches. Then she ran to a public park — in high heals — to meet her boyfriend, and gave him oral sex in a position that was medically impossible with her supposed injury.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Celebrating 20 years of uniting the fraud fight

Alerting consumers about fake health plans is a public-outreach priority.

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The year: 1993

The setting: Insurers and consumer leaders gathered in a conference room to hammer out a new anti-fraud group, still waiting for a name.

The need: Insurers and consumer groups may not always see eye to eye about a range of issues. But insurance fraud cheated insurers and consumers alike — and raised premiums around the U.S. It made sense to join forces against this crime.

What happened next: The Coalition Against Insurance Fraud was founded as the nation’s only insurance anti-fraud group whose members include insurers, consumer leaders and government agencies.

It’s a unique role, a unifying role that adds credibility to America’s fraud fight.

It was an unusual and far-sighted idea in 1993, and risky. Could the founders pull it off?

In 2013, the Coalition is celebrating its 20th anniversary of impact. Successful fraudsters steal insurance money with urgency and purpose. The Coalition has pursued this crime with the same urgency and purpose for two decades.

The Coalition’s work has rested atop three pillars: Legislation, public outreach and research. The focus is on all forms and all lines of insurance fraud, though in the early years the emphasis was on property-casualty fraud.

Just one example: Passing state laws tightening the noose around shady medical clinics, staged-crash gangs and contractors has been a large target of our legislative operations. Numerous laws have gone onto the books since the Coalition began working with statehouses.

But fraud is rife everywhere. So as a unifying force, the Coalition has expanded deeper into health and other forms of insurance. The Coalition’s insights and credibility have opened numerous doors to collaboration with all levels of government.

The same cheaters, for instance, are robbing insurers with false medical claims in all lines of medical insurance, for instance. Co-founding and growing a formal partnership for government and private insurers to combat medical swindlers is just one key Coalition initiative underway.

And alerting consumers about fake health plans is a public-outreach priority. A Coalition media push helped spur a U.S. Senate investigation and GAO report.

This is a tall order. It’s cooking up a full plate that’s only getting fuller.

It’s also an energizing order. If you want to get something done then find the busiest person around, the maxim goes.

But large challenges abound. Leaner budgets are hampering more government anti-fraud agencies — most fraudsters have no such budget limits. Too many consumers also are indifferent that fraud is a personal threat. Organized crime is digging deeper into insurance as well.

But that leaves much more to achieve.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

6 mobile apps with fraud-fighting potential

BLOG_crashAppsA suspect vehicle suddenly swoops in front of you and jams on the brakes, causing a rear-end collision. Funny, you were going slow, and that car appeared out of nowhere. You think you’re being scammed, but what can you do? Having a smartphone may help. Not only do these devices make calls, track to-do lists, and help you find the nearest restaurant, a few recent apps may even help fight fraud. Some have been created for other purposes, but have fraud-fighting potential. Here we’ve chosen a few of our favorites.

1. iCarBlackBox 
What it is: This app turns your phone into a virtual black box. Using GPS, video, audio, and an impact sensor, iCar Black Box can record all the details of a crash as it takes place. Using the phoneʼs accelerometer, the app can tell when thereʼs been a sudden stop, and will verbally ask the user if they wish to save the footage of the incident. It only saves footage when instructed to do so, thereby conserving space. Users can check the speed of the moving vehicle, date and time, location, road conditions and more through audio/video.

Why it’s a fraud-buster: If you can show what really happened, you might have a better case of proving fraud.details of a crash as it takes place. Using the phone’s accelerometer, the app can tell when there’s been a sudden stop, and will verbally ask the user if they wish to save the footage of the incident. It only saves footage when instructed to do so, thereby conserving space. Users can check the speed of the moving vehicle, date and time, location, road conditions and more through audio/video.

2. iWrecked
What it is: iWrecked allows users to log all the details of a crash, including unlimited pictures, other driver’s insurance information, police information, even witness data and weather conditions. It allows users to create crash diagrams. The app can then generate a pdf report detailing the accident, and send directly from the app to the user’s insurance company.

Why it’s a fraud-buster: Knowledge is power. The app’s reminder to get witnesses’ contact info, capture photos, and take down all the details of a crash may help provide a more comprehensive report.

3. NICB fraud tips

What it is: Reporting fraud just got way easier. This app allows users to anonymously report fraud from the convenience of their phones, on the go. Users can have a chat-style conversation to explain their circumstances, or send an anonymous email-like message including pictures and descriptions.

Why it’s a fraud-buster: Convenience is key, and users are can now snap pictures on their phones, or discuss a fraud tip without making a sound.

4. DBPR Mobile
What it is: Floridians who are approached by shady contractors after storms now have an instant licensing check on their phone. Consumers can verify whether businesses and professionals are licensed, searching by name or license number.

Why it’s a fraud-buster: It’s the first step in determining who to work with. Consumers are still advised to contact their insurer to get referrals on trusted contractors, but turning to this app can give an instant read on what contractors are being honest about licensing.

5. Oklahoma Insurance Department app
What it is: An Android-based app, this allows users to carry important insurance information with them. Consumers can report fraud, search for seasonal insurance topics, check licensing, nominate an insurance professional of the month, and contact the department directly.

Why it’s a fraud-buster: Users can check key fraud info, and can report fraud if they catch it.

6. Scam Detector
What it is: An app that allows users to verify telltale signs of scams to protect themselves from being defrauded. Detailing more than 525 scams, organized by industry, it’s updated in real time. The search function also lets users browse based on their circumstances. Auto scams, internet scams, financial scams, property scams and more.

Why it’s a fraud-buster: Knowing about a fraud can stop the crime in its tracks, and allow users to take action.

Are there any similar apps you are using that should be on this list?
Let us know in the comments.

The science of saying ‘no’ to fraud

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There’s a question about whether well-aimed doses of public outreach can persuade people that insurance fraud is a dead-end street.

We have little to go on, because almost nobody applies true science. First you need enough juice ― the money to launch a steady blitz of TV ads, radio spots and other tactics. Then you test your messages and commercials before they’re launched. Will people think the spots effectively gnaw at your sense of right and wrong? Next you measure if people’s attitudes have shifted after the campaign is over. Researchers swing back into action, polling consumers about the ads.

It’s a tall order, but that’s how you know if you moved the needle.

One state agency uses just this science. The promising result: Public outreach can make people decide they don’t want to commit fraud. Look to the Pennsylvania Insurance Fraud Prevention Agency (IFPA) for a glimpse at what’s possible.

IFPA recently finished an 18-month outreach campaign. The effort was aimed at everyday people who commit smalltime scams that add up to bigtime dollars. The commercials avoided bully pulpits and preaching against fraud. They took a subtle but hard-nosed approach called Know the Risks ― Know the Penalties. Several spots simply showed average people who did a dumb thing, got caught and paid a price they came to regret.

One woman, for example, lost a job she was applying for. The spot was called Permanent Record. The effort built on an earlier campaign. In one emotional spot, an angry kid called his busted father a liar.

The agency carefully measured the latest campaign results. More people realized fraud was a felony and one of the most serious crimes. So far so good.

But another telling stat showed up. People who said they’d likely commit fraud decreased two percent. That seems like a small number, but generalize that sample to the whole state: 160,000 Pennsylvanians aren’t likely to inflate or invent a claim.

How many millions of insurance dollars not stolen could that add up to? How many lives and families could be spared wreckage and ruin because of one stupid act? IFPA’s campaigns, cumulatively, are building results. Most state agencies can’t afford the kind of money IFPA spends, nor do results in one state necessarily speak for everyone else. But there’s some promise, here.

Public outreach, if done right, could be a profitable investment and steer people down the right path of life. Insurers and government budget directors, take note.