In observance of Fraud Prevention Month, the Canadian Insurance Services Regulatory Organizations (CISRO) is spotlighting the importance of consumer vigilance in the insurance marketplace.
The annual prevention campaign aims to enlighten Canadians about ways to identify, avoid, and report fraudulent activities. According to data from the Canadian Anti-Fraud Centre, the year 2022 saw over 50,000 incidents of fraud reported, tallying losses exceeding $400 million.
CISRO chair Patrick Ballantyne emphasized the critical role of skepticism in safeguarding against scams, particularly regarding insurance transactions.
He said: “When it comes to detecting fraud, the old adage ‘if it sounds too good to be true, it probably is’ can be a guiding principle. It can also apply to shopping for insurance.”
Ballantyne highlighted the security benefits of dealing with licensed professionals in the field.
“Licensing adds a layer of protection by requiring applicants to meet certain education requirements and provide criminal background checks,” he noted. “Checking whether your agent and broker are licensed is a simple first step you can take to protect yourself.”
According to CISRO, warning signs include unusually large discounts on insurance premiums and demands for payment through unconventional means such as cryptocurrency, wire transfers, or gift cards.
The trade body stressed the importance of buying insurance only from licensed agents, brokers, or directly from insurers, with it being imperative to verify the licensing status of these intermediaries with provincial regulators.
Ballantyne also cited the need for would-be policyholders to have a clear understanding of their insurance needs before looking at who to be insured with.
“Not all providers offer the same products or services, and not everyone will be a good personal fit,” he declared. “They’re working for you, so make sure you’re comfortable with them.
“Before signing a contract, you should always make sure to verify the licence, read through the paperwork, and ask questions to make sure you understand what you are signing.”
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