Insurance fraud costs the industry more than a billion dollars a year in Canada – and stories like a woman turning a broken big toe into a nine-year-long payday only underlines the worldwide problem.
A San Diego woman who was caught carrying heavy boxes around while claiming that she was wheelchair-bound for nine years was sentenced to a year in jail and ordered to pay restitution this month for workers compensation fraud and other charges.
“Fraud impacts your industry’s bottom line, eats into consumers’ pocketbooks and ultimately affects everyone’s credibility,” says Kristen Rose, the senior communications officer with the Financial Services Commission of Ontario. “Fighting all forms of insurance fraud is a shared responsibility, and insurers, agents and brokers need to be vigilant in the course of their business and identify and report potentially fraudulent activity. It is in your best interest to proactively detect and report cases of suspected fraud.”
The San Diego woman, Yolandi Kohrumel, reportedly broke her toe in 2002 while working for office supply retailer Staples Inc. Kohrumel reportedly had surgery for her toe, but claimed she was unable to use crutches that were provided for her after the procedure.
When Kohrumel was provided a manual wheelchair, she demanded an electric wheelchair – claiming the manual one gave her carpal tunnel syndrome. She also claimed to suffer numerous health conditions, including depression and hypersensitive feet – keeping her in the chair for almost a decade.
In Ontario, the provincial government introduced a new regulation that includes a requirement that gives health care providers 10 days to provide Ontario insurers with information the insurer may need to determine liability for payment. Another new provision forbids claimants from applying for mediation if they fail to comply with the insurer’s request for an insurer examination – a move that has drawn approval from the insurance sector.
“We are pleased that our industry will have additional resources with which to combat fraudulent activity which affects the insurance industry, and most importantly, the consumers we serve,” says Ralph Palumbo, Ontario vice-president of Insurance Bureau of Canada. “We commend the work of the Financial Services Commission of Ontario in this regard, and, of course, the government for taking this timely and appropriate action.”
According to the IBC and a 1993 study, 15 percent of all auto insurance claims in that year had some element of fraud in them. In 2000, a poll conducted by the Canadian Coalition Against Insurance Fraud found that 46 percent of Canadians thought it was easy to submit a fraudulent claim.
Reporting fraud is crucial to reducing those numbers, FSCO’s Rose told InsuranceBusiness.ca.
“Recently, FSCO launched a new Fraud Hotline that allows people to easily and anonymously report suspected auto insurance fraud over the phone by calling 1-855-5TIP-NOW or via the web at www.fsco.gov.on.ca/TIPNOW,” she says. “This hotline responds to a recommendation of the Automobile Insurance Anti-Fraud Task Force.”
In the case of the woman from San Diego, the scheme was uncovered when movers saw Kohrumel get out of her chair and lift heavy boxes while moving into a bigger house that she had requested from AIG, as she had asked for the larger space to accommodate her wheelchair.
Kohrumel's 65-year-old father, Anton Buitendag, also participated in the scheme, claiming to provide his 35-year-old daughter with around-the-clock health care. He sought payments of $324,000 from third-party administrator Esis Inc. and insurer American International Group Inc. for his services.
Kohrumel pleaded guilty to insurance fraud, while Buitendag pleaded guilty to attempted grand theft. The pair was ordered during their sentencing to repay $1.6 to Esis.
