Let’s Put a Lid on Shady Roofers

BLOG_films Hurricane season is fast approaching and we’re in the midst of tornado season. Let’s also remember that with warmer weather we tend to have other storms that could wreck havoc on homes and properties.

Homeowners and property owners can be victimized by these storms yet a second time by shady contractors. These storm chasers tend to be unlicensed and incompetent. They perform shoddy repairs, disappear before finishing the job, and sometimes even causing more damage to a home to inflate their fees.

States, insurers and consumer groups are clamoring to crack down on these storm chasers. And, recent legislative action shows that growing numbers of state lawmakers are getting the message.

States vary widely in how they regulate and license contractors such as roofers to repair homes. But even the most stringent rules may not protect a homeowner from being required to pay for substandard repair, because a contract is a contract. Unless state laws explicitly allow homeowners to rescind or cancel a contract, homeowners may be on the hook for the payment whether the insurer is willing to pay for the repair or denies the claim.

So, how do we help victimized homeowners whose property is damaged by a tornado, hurricane or hail storm?

First, let’s agree that most contractors are upright and honest. But we need partnerships among organizations to get the message out to consumers about the bad apples. And those messages must get out before storms hit. It’s basic consumer advice: how to recognize the warning signs of a shady contractor, and how to properly vet the contractor before signing on the dotted line.

After a storm hits, homeowners are in shock and want to put their live back to normal as quickly as possible. They can be vulnerable a shady contractors who seem helpful and decent, and offer a safe lifeline during a highly stressful time. It’s usually too late to try to educate consumers in these chaotic conditions.

These homeowners might easily buy into a shady contractor’s sales pitch without checking whether he’s properly licensed or has a history of complaints. The contractor may not even have a business card or company name.

So consumer groups, insurers, state insurance regulators, attorneys general, Better Business Bureaus and other viable groups must work on PR campaigns with local and state media to get a message out early and often before storms hit.

State insurance regulators, AGs and insurance organizations in numerous states do send out consumer alerts. Facebook, Twitter and other social outlets also are deployed. But, that is only part of our job.

We also need enact state laws that protect consumers from dishonest contractors.

More lawmakers have decided this is the year to send the message that the crooks must go.

The Coalition has identified several states that have bills, with varying degrees of promise. Most measures have two things in common: First, consumers can cancel a signed contract if their insurer denies the claim for fraud or unneeded repairs. Second, contracts also must clearly display the cancelation right. Here’s the action so far:

- Indiana, Nebraska, South Dakota and Kentucky have enacted laws;

- An Iowa bill has passed both chambers. Consumers could cancel a contract if the contractor uses inducements to convince the consumer to sign, or acts as an intermediary with the consumer’s insurer (i.e., illegally acting as an adjuster). The latest version also would protect the AG’s right to prosecute shady contractors,

- Tennessee is debating bills in both chambers;

- A Colorado bill has passed the Senate and awaits action in the House.

We applaud states that have enacted laws, and encourage legislators in states with active bills to pass them as soon as possible. Consumers shouldn’t pay a potentially terrible price for a contract that a shady contractor tricked them into signing.
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For consumers, this is protection. For insurers, this is good business sense.

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

The novel idea of a non-addictive painkiller

BLOG_nonaddictiveMore than 600 people gathered in Orlando last week for an inaugural summit on prescription drug abuse. There were high-level government officials (including the surgeon general, congressmen and administration officials). There also were lots of medical types with impressive credentials, a bevy of vendors selling anti-drug wares, and a few stoic parents who had lost sons and daughters to drug overdoses.

Only a couple of insurers attended, even though the general consensus of attendees was that much of the illicit use of painkillers is insurer-paid.

What was evident from the week-long conference is that prescription drug abuse and fraud in the U.S. is a huge, complex problem with many facets. And the problem likely is still growing. It touches the urban core, suburban bedroom communities and rural America. Drug diversion is an equal opportunity scam perpetrated by druggies, honor society high schoolers, soccer moms, celebrities, physicians, pharmacists, and increasingly, organized criminal enterprises. The power of addiction plus high profit makes this incarnation of drug abuse perhaps the most sweeping ever.

I was asked to speak about the high cost of drug diversion — specifically painkillers — on employers and insurers. There’s a strong need for more anti-fraud measures, including prescription monitoring programs (PMPs) in states and general awareness all around, I noted. Organizations attending the conference also must get more involved in the political process to enact stronger anti-drug diversion legislation.

Then I threw out perhaps a not-novel and even naive idea: The government, medical community and insurance industry should launch a Manhattan Project to develop an effective non-addictive painkiller. It would take the profit motive out of drug diversion — yet still help those who are in pain obtain relief. Plus it might save a lot of lives.

I asked the audience, which numbered in the hundreds, if anyone was working on such an effort. One person raised her hand. Others shrugged. Perhaps it’s not such a naive idea after all.

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.