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Insurance Fraud Red Flags

There is a growing trend in identity theft. Recently, some individuals are using stolen identities and/or straw (fictitious) customers to finance vehicles and acquire automobile insurance policies for illegal purposes. Usually, to secure high-end vehicles from dealerships and illegally ship them overseas.  

Combatting fraud is everyone’s responsibility. Our continued focus is to safeguard and minimize risk to our business. We also ask that you monitor new business for the following red flags, as we continue to investigate and monitor the situation closely.

If you suspect a case of ID Theft and/or a straw customer, immediately send a report to http://clearviewconnects.ca/ (an independent third party company).

What to Look Out For

Before Binding:

• The urgency in obtaining auto insurance - typically requested the end of the day, month end, quarter end and/ or when staff is limited, and there is a need to pick up the car from a dealership immediately
• Monoline Auto business – no cross-file
• Cost of Insurance – no price objections
• The client does not appear to know their information -  the client is unsure or stumbles providing their information (insurance history, address, etc.) or details that should come easily
• A third party is directing the insurance purchase – A third party joins the customer and directs the purchase of insurance (where no communication barrier exists).  Alternatively, the third-party directly handles the purchase of the insurance policy on behalf of the named insured.
• Common straw/fabricated profile- client profile is increasingly an international or foreign exchange student in a recent presentation at the Canadian Association of Special Investigation Units (CASIU) Fraud forum
• Address/location inconsistencies - between policy address, brokerage and dealership locations (not in close or realistic proximity to one another)
• Email address discrepancies - does not appear to relate to named insured (e.g. jsmith@gmail.com for Mike Jones’s policy)
• High-end vehicles - BMW, Range Rover, Audi, Mercedes, etc. (Does not show a history of similar vehicle types previously insured by the individual) 
• The urgency for a binder letter to be issued –to release a high-end vehicle from the dealership. Alternatively, in some cases, the dealership may be pressuring us for a binder letter.

After Binding or Policy Activation:

• Credit card chargebacks and/or invalid banking information - any returned payments with invalid transactions or in combination with other red flags 
• The consumer calls in to question why they are receiving paperwork from Pembridge or Pafco- a consumer calls to report they receive bills, policy documentation, or an Autoplus report that shows a policy or vehicle they did not purchase/own and/or didn’t authorize a policy
• Finance company calls to validate a binder letter and
  • The information provided does not exactly match the records, e.g. the insured’s name, policy number, address, vehicle insured or any other information does not match.
  • No such policy of insurance appears to exist within the systems (searched by either customer name, policy number, quote number, telephone number, etc. in our systems)
  • The signatory of the binder letter does not work for Pembridge, Pafco or the brokerage.
  • The signatory of the binder letter works for Pembridge, Pafco or the brokerage but did not generate the binder letter provided.

Please note:  Though we have listed indicators of risk relating to potential ID theft and/or straw customers, these are not absolute, however.  Your own ‘true risk’ assessment (where something doesn’t “feel right”) combined with any of these red flags may warrant further risk validation questions. It is recommended that you proceed with caution before binding.

We thank you for your cooperation and support in helping us address the rising risks associated with fraud activity.