It's Fraud Prevention Month, and Insurance Bureau of Canada (IBC) is asking Canadians to protect themselves from insurance fraud. In times of financial hardship, such as the economic downturn caused by the COVID-19 pandemic, instances of fraud tend to rise.
IBC's COVID-19 Fraud Report, released last fall, indicates that some fraudsters view the pandemic as an opportunity to profit.
"We're seeing an increase in fraud and scams across Canada," said Maria Dalcin, Senior Vice-President, Insurance Fraud & Operations, IBC. "IBC wants to help consumers avoid falling victim to insurance fraud. The more people report fraud, the more fraudsters we can bring to justice."
IBC cites three areas where consumers may be exposed to fraudulent schemes that could directly affect them and their insurance: staged collisions, body shop and towing scams, and cyber attacks.
Staged Collisions
These planned auto collisions put innocent people at risk and support false insurance claims that affects unsuspecting victims. False claims filed by fraudsters, also needlessly use up valuable law enforcement, court and health care resources.
Insurance fraud costs Canadians well over $1 billion a year in added insurance premiums, and strain our already burdened health care, emergency services and court systems.
Video: Staged Collisions: What You Need To Know
Learn more about Staged Collisions on IBC's website.
Body Shop and Towing Scams
In some cases, body shops, preying on consumers' fear of contracting COVID-19, may charge exorbitant fees for cleaning the vehicles, and they may store vehicles for longer than needed before commencing repairs.
People who take their vehicles in for repairs should ensure the auto shop is properly doing the agreed upon repairs. Unregulated and dishonest practices in the towing and storage industry drive up the cost of auto insurance paid by consumers.
IBC encourages drivers to Know Your Tow and keep the Know Your Tow tips card for reference. They should also refer to the provincial consumer protection act and be aware of their rights when their vehicle is being towed from the scene of a collision or taken to an auto body shop for repairs.
Cyber Attacks
Due to the pandemic, many Canadians are working from home, causing a dramatic surge in the volume of business being conducted online away from usual business premises. Hackers are taking advantage of this new reality. Experts have noted dramatic increases in the number of cyber attacks on organizations.
Criminals continue to aggressively target small and medium-sized commercial enterprises. It's more important than ever that business owners take steps to ensure they're protected against cyber crime.
Video: Importance of Cyber Insurance during COVID-19
Learn more about Cyber Risks: An Increased Threat During COVID-19.
"Protecting yourself against fraud that has insurance implications, such as staged collision or a cyber attack, doesn't only protect you, it protects everyone. These schemes waste resources and can contribute to rising costs for insurance and public services. These are not victimless crimes," added Dalcin.
It's easy to report a suspected exaggerated claim, a staged auto collision or another insurance crime. Call IBC's anonymous, toll-free TIPS Line at 1-877-IBC-TIPS (1-877-422-8477) or submit a tip online at ibc.ca.
