March is Fraud Prevention Month, and as a result, the Insurance Bureau of Canada (IBC) is calling on Canadians to protect themselves from insurance fraud, particularly given the many scams that are circulating today due to the COVID-19 pandemic.
According to IBC’s “COVID-19 Fraud Report,” there’s been an increase in fraud and scams across Canada since the health crisis hit the country. These fraud schemes include staged collisions, body shop and towing scams, and cyberattacks on businesses.
The first two scams are often connected, noted Bryan Gast, IBC’s national director of investigative services. On the towing scheme front, IBC has supported a law enforcement initiative called “Know Your Tow.” If a predatory tow company tows a vehicle, the owner can lose control of their car, as it could go to an unknown storage facility that neither the owner nor their insurance company can track down, in turn accumulating storage fees for days, weeks, and months on end.
Moreover, not all collisions are accidental, added Gast. There are many collisions where those involved have staged one or both of the vehicles getting into an accident, sometimes inflicting damage on innocent victims.
“The ones that participated in the scam and knew that it was an intentional act potentially will also seek medical treatment, and they will submit claims that are bogus,” continued Gast. “And that can expand to lawsuits … so it’s something that could easily cost over $100,000 just from payouts, and if you include the law enforcement and emergency services that go along with that, the cost can really jump.”
To fight back against fraudsters, IBC is working alongside the insurance industry to investigate the veracity of insurance claims and weed out staged collisions.
IBC’s fraud report also highlighted the threat of cyberattacks, which leaped with the onset of the pandemic. Back in March 2020, fraudsters started to capitalize on the fact that Canadians’ personal and professional lives became even more dependent on the internet. In fact, technology company Dell noted that in the first quarter of 2020, 66% of all global phishing attacks were targeted at Canadians, while the next closest country faced just 7% of total phishing attacks.
“When it comes to vulnerability and opportunity, the pandemic has opened up many opportunities for criminals out there when it comes to cyberattacks – and this can not only affect individuals, but businesses as well,” said Gast. “Sometimes, it’s called social engineering, where fraudsters have done a bit of a work-up on the individual and they’ve identified who you are, and they will send out these phishing emails, hoping that somebody will respond.”
There have likewise been payroll scams involving bogus job offers, impacting people who may already be out of work and are even more vulnerable.
To fight against cyber fraud, Gast highlighted the work of the Canadian Anti-Fraud Centre, which provides ways that people can protect themselves and serves as a resource for reporting incidents, should individuals or businesses be targeted by a scam.
“Fraud is such an underreported problem, that it’s really hard sometimes to put a finger on how widespread it is,” said Gast. “People are embarrassed … but if everybody was more informed, it might be able to at least curb some of the success that the criminals are having.”
Brokers can help in the fight against fraud, too, according to Gast.
“They can educate their customers and their employees, especially when it comes to cyberattacks, as to what type of attacks are out there and what to look for,” said Gast, adding that on the towing side, “Brokers can try to get the message out that the individual does have their choice of which tow they want … They can also highlight the link to ‘Know Your Tow,’ where there’s a two-sided postcard that shows what people’s rights are when it comes to a tow. If those precautions and recommendations could be publicized and understood, it would save a lot of problems.”
Brokers can also let their clients know that if they get in a collision, they need to make sure to document it by taking photos and understand who’s in the other vehicles.
The key to all of IBC’s work on fraud is to spread awareness, during the month of March and beyond. After all, said Gast, “Even though March is designated as Fraud Prevention Month, it’s a year-round issue, and one of the best things that people can do [to protect themselves] is to become informed.”
