Tracy Martin, a custodian living near Detroit, Michigan, thought she was acting responsibly when obtaining insurance backed by one of the largest auto carriers in the U.S. after purchasing a 2004 Ford.
Much to Martin’s surprise, however, police towed the truck out of her possession because of fraudulent auto insurance, according to an investigative report conducted by The Intercept. It turns out that a hoaxer posed as an insurance agent to sell the policy, which was offered at a discounted rate to intentionally appeal to working-class demographics.
These impersonators, who are increasing in number throughout North America, purchase a legitimate policy with falsified forms of payment, and retain it until they obtain an insurance card.
She tried to contact the insurance company where the fraudster claimed to have received backing, but was told, “…it’s a whole lot of you all in Detroit. There are many victims there.”
Although Martin was unknowingly prey to this scam, authorities have told her that the only way she can regain her vehicle is by buying it back from an automobile auction. Not only is Martin subjected to this financial doom, but she would have been completely unprotected if she ever became involved in a collision.
Consumer advocates argue that police contribute to the egregious nature of this crime by targeting victims, who are “far easier to track down than the original perpetrators.”
Although low-income populations are the primary target of this scam, providers note that auto insurance fraud affects everybody.
In fact, fraudulent claims cost Ontario $1.6 billion in 2013, and experts estimate that elimination of these payouts would save every driver between $116 and $236 in premiums every year.
