‘Giant denial’ about fraud risk in corporate Canada, warns ex-RCMP investigator

‘Giant denial’ about fraud risk in corporate Canada, warns ex-RCMP investigator

Shane McNeil, BNN.ca

Canadian businesses are in the midst of “a dangerous combination of overconfidence and naiveté when it comes to detecting fraud,” according to a new survey.

Half of Canadian businesses “either suspect or know for certain that their business has experienced fraud or scams in the last year,” according to a survey by Ipsos Reid conducted on behalf of tax and business consultant MNP.

However, the same study revealed that 80 per cent of the businesses polled are confident they can put a stop to it. The number of businesses that feel “at least somewhat” able to deal with fraud was even higher at 90 per cent. Twice as many respondents believed fraud was an industry problem than those that believed it was an issue with their own companies.

“This kind of ‘it won’t happen to me’ optimism puts the advantage in the hands of criminals and makes Canadian businesses tremendously vulnerable,” said Greg Draper, MNP’s vice-president of valuations, forensics and litigation support, in a release.

“The reality is that no organization is immune from either internal or external fraud.”

Draper, a former RCMP investigator, added there is a “giant denial” in Canada when it comes to preventing business fraud.

“Fraudsters will go to great lengths to assume the identity of company executives or trusted vendors; spoofing company email messages, researching employees who are responsible for money management and using language specific to the company being targeted,” said Lynn Danis, criminal intelligence analyst with the Canadian Anti-Fraud Centre, in a release. “Ultimately, fraud prevention falls on the business.”

The survey polled a combination of small business executives and C-suite execs from companies with 100 or more employees over a 10-day span in January.

 

Double Costs Awarded After Trial Judgement Nearly Doubles Plaintiff Formal Offer

Today’s guest post comes from B.C. injury claims lawyer Erik Magraken

Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff double costs after obtaining judgement nearly doubling her pre trial formal settlement offer.

In the recent case (Risling v. Riches-Glazema) the Plaintiff was inured in a motor vehicle collision and prior to trial made a formal settlement offer of $315,000.  The Defendants rejected the offer and proceeded to trial where damages of $622,500 were awarded.  The Plaintiff sought and was granted post offer double costs.  In agreeing these were warranted Mr. Justice Affleck provided the following reasons:

[7]             In my view:

a)              The plaintiff’s case was well known to the defendants at the time of the offer. The plaintiff had been examined for discovery on two occasions; had attended two medical examinations at the request of the defendants, and a mediation had taken place in June 2016;

b)              the offer was made one week before the trial began which gave the defendants a full opportunity to consider it;

c)               the offer had a relationship to the claim and could not be characterized as a “nuisance offer”; and

d)              the offer was expressed in plain language and thus easily evaluated.

[8]             The final judgment of the court greatly exceeded the offer. The plaintiff submits her offer was a true attempt to reach a reasonable compromise of the claim and that the rationale for the double cost rule is to encourage parties to settle by taking a realistic view of the probable outcome of a trial. The plaintiff submits that rationale would be thwarted if in the present circumstances she is not entitled to double costs.

[10]         The defendants submit their limited understanding of the case made it difficult to quantify the claim and that, while the rationale for the rule for double costs is acknowledged, the defendants ought not to have been deterred from defending the claim for fear of a “punishing costs award”. Currie v. McKinnon, 2012 BCSC 1165 is relied on in support of that argument.

[11]         The defendants also submit that “no rationale for the offer was provided” in the plaintiff’s letter of August 15, 2016.

[12]         I do not agree that no rationale was provided. The plaintiff described the heads of damages she would advance at the trial and advised that the offer took into account “Part 7 Benefits paid or payable pursuant to Section 83 of the Insurance (Vehicle) Act”. Furthermore, the defendants had an opportunity on the mediation to canvas fully with the plaintiff’s legal advisers the extent of the plaintiff’s claim and the evidence at trial which would be advanced to support the claim.

[13]         I am also mindful that in Hartshorne the Court of Appeal expressed the view that the list of factors described in para. 27 of its reasons need not be relevant in every case.

[14]         Currie v. McKinnon does not help the defendants on this application. That case involved a personal injury claim with an award of damages which fell within the monetary jurisdiction of the Small Claims Court. Double costs were not awarded. In short Currie v. McKinnon is distinguishable on its facts from the matter before me to such an extent that it cannot usefully be called in aid of the defendants’ argument.

[15]         The plaintiff is entitled to the costs of this action including double costs from the date of the offer.

ICBC steps up fight against auto insurance fraud in 2017

ICBC steps up fight against auto insurance fraud in 2017

ICBC continues to fight insurance fraud in 2017, with a new education campaign to support its increased fraud prevention efforts.

Following December’s news that ICBC had generated its first results from a new high-tech tool which will help identify and target fraudulent claims, the corporation is now reminding British Columbians, through a new advertising campaign, of the serious nature and cost of insurance fraud.

“The goal of this information campaign is to show British Columbians that exaggerating an injury for financial gain is wrong,” said Chris Fairbridge, ICBC’s manager of the Special Investigation Unit (SIU).

Most claims are honest, but insurance industry studies estimate that fraudulent or exaggerated claims make up about 10 to 20 per cent of all claims costs. Applying those estimates means that fraud and exaggeration is costing ICBC customers up to $600 million a year, or more than $100 a year for each ICBC policyholder.

The 2016 public information campaign sparked a 70 per cent increase to ICBC’s fraud tips line in the first quarter. Overall last year, the fraud tips line received nearly 1,900 calls – a 66 per cent increase over the volume of tips in 2015.

“We want the public to better understand the role they can play so we can work together to best prevent fraud,” added Fairbridge. “Tips help us take action by investigating suspicious situations in order to protect the majority of our customers who file honest claims.”

In 2016, ICBC’s Special Investigation Unit completed close to 10,000 investigations.

ICBC expects fraud detection and enforcement activities to reduce ICBC’s basic insurance claims costs by $21 million for policies written over the next year. And ICBC estimates all of these activities, including use of the analytics tool, will save up to $44 million a year by 2019.

The most common types of insurance fraud include false claims, exaggerated claims and organized fraud. An example of a false claim is when an owner fabricates a story about their vehicle being stolen when it was actually disposed of by the owner. Exaggerated claims are when a driver or passenger embellishes a claim by overstating their injuries or the damage to their vehicle. And organized fraud is a planned event such as a staged collision.

British Columbians can further protect their wallets by reporting suspicious activities related to insurance fraud to ICBC’s toll-free tips line at 1-800-661-6844. Tip information is confidential and callers can remain anonymous. For more information, visit icbc.com/fraud.

Here are some of ICBC’s 2016 fraud files:

Exaggerating the impact

A woman involved in a minor rear-end crash in 2013, which caused approximately $1,100 worth of damage to her vehicle, claimed more than $200,000 in pain and suffering and other damages. The B.C. Supreme Court judge had serious concerns about the woman’s credibility and found she “attempted to mislead the court and exaggerated the impact of the accident on her physical condition and her ability to work.” In the end, the judge awarded less than 20 per cent of what she was demanding in her claim. Because the judge’s award was less than what ICBC had offered before she took the case to trial, she is also responsible to pay two times ICBC’s legal costs.

Fraud – a serious offence in the courts

A Provincial Court case concluded in November 2016, where four people involved in a 2013 crash were all convicted for making false injury claims with ICBC. The fines ranged from $2,000 to $3,000 and three of the four were sentenced to one day in jail. The fourth received a sentence of three days in jail.

In this case, injury claims were presented to ICBC, even though two of the occupants who said they were in the vehicle involved in the crash, weren’t actually in the vehicle. In fact, only two people were in the vehicle along with two dogs.

Cell phone reports were used in this case indicating that those making claims were talking to each other at the time of the crash.

In his reasons for sentence, B.C. Provincial Court Judge, John Lenaghan said the case was “in many ways, a very serious offence because it is a fraud perpetrated upon everyone in the province who relies upon the Insurance Corporation.”

Who smashed up the BMW?

A 21-year-old man reported his mother’s 2010 BMW 750 had been vandalized while it was in his possession and parked at his relatives’ house in New Westminster when visiting them on the evening of October 31, 2016.

The man claimed he found the vehicle with smashed windows, dented exterior body panels, broken head and tail lights, slashed leather seats and a smashed dashboard and navigation system. The $35,000 car was a write off.

However, no one inside the house had heard any noise outside where the vehicle was parked during the two-hour period that the vandalism was said to have happened. And none of the four other expensive cars in the driveway had been damaged. And ICBC didn’t have any other reports of vandalism in the area.

The vehicle owner claimed that the BMW was in excellent working condition, but an inspection at ICBC’s Centralized Estimating Facility showed an engine-warning light on the dash. The mechanical inspection later revealed the car suffered from disintegrating drive clutches in the transmission, excessive oil consumption, excessive engine and transmission oil leaks and two engine fault codes that had set off the engine warning light. Follow-up discussions with the owner resulted in information that didn’t match the mechanical inspection of the car.

Due to false statements about the condition of the car, ICBC denied the claim.

Engaged couple engage in fake pedestrian crash

While out for a leisurely walk in East Vancouver, a man said a car struck him. He claimed a variety of injuries but didn’t have any witnesses and emergency vehicles didn’t attend the scene. The man was anxious to settle his injury claim and became angry when the ICBC adjuster said ICBC needed to talk to the insured motorist. Suddenly, a woman called to report a claim and admitted to striking the pedestrian. She didn’t have the name and said she didn’t know who he was.

The man tried again to settle his claim quickly, a further review showed the man had filed three previous pedestrian knockdown claims. Again, he said he didn’t know the driver. But when the Special Investigation Unit took on the case, investigators discovered Facebook posts that revealed the two were in fact a happy couple and were engaged to be married just two weeks before the incident. The man has abandoned his claim.

Trio of staged crashes

Three crashes in Surrey close to a local auto body repair shop raised the suspicions of ICBC investigators.

In a complex web of relationships and links involving six people, it turns out one of the claimants responsible for the first crash and claiming to be injured in the third crash works at the repair shop with another man who was claiming to be injured in both the second and third crashes.

A woman claiming to be hurt in the first crash and the man responsible for crash number two were dating each other. And another woman claiming to be hurt in the first crash called another man, claiming to be injured in the second and third crashes, to drive her home after crash number one.

After an ICBC investigation, it turns out the crashes were all staged and deliberate resulting in $58,000 in vehicle damage claims and injury benefits. ICBC has denied all of the injury claims and is now pursuing legal action to recover the costs of the damage and injury benefits paid.

Media contact

Sam Corea
604-982-2480

Everything a Bride-to-Be Needs to Know About Ring Insurance

Everything a Bride-to-Be Needs to Know About Ring Insurance

With great rings come great responsibility…

Excerpted article was written by Erin Celletti | BRIDES

From the moment you say “Yes!” chances are, you’ll be rocking a shiny new addition on your left hand. While it may be the last thing on your mind during such a happy time, with great rings come great responsibilities—including insurance. Here’s what you need to know.

Why You Should Have It
Jewelry insurance can offer coverage of your precious baubles in cases of theft, loss, damage, and even disappearance. Whether you’ve left it behind on the beach, lost a stone at the gym, or had your ring stolen, ring insurance can offer financial protection and peace of mind when you need it most. While anything happening to your engagement or wedding ring is heartbreaking, knowing it’s properly insured can help to soften the blow.

Questions You Should Ask
When shopping for a ring insurance plan, you have to ask questions to know exactly what coverage you’ll be provided. Will you continue to be insured when out of the country? Are you covered for damage or just loss/theft? Will the policy adjust according to inflation? Will repairs or replacements be comparable? Can you use your own jeweler if you should need to? These and more should all be considered prior to selecting a plan.

What Will You Need?
You’ll need a certified appraisal that verifies and the size, specifications, diamond grading, cost, and purchase price—the whole nine yards. All of this information will be summed up in a formal appraisal, which jewelers and appraisers can provide. It’s a good idea to have one done whether or not you pursue insurance, but you’ll certainly need one for insurance.

When Should You Get It?
In short, the sooner the better. Your soon-to-be fiancé can insure the ring as soon as it is purchased and in his possession—much like you would insure a car prior to driving it off the lot. You might not initially be thinking of anything happening to your precious and sentimental token, but the sooner it’s insured, the sooner you’ll be protected. Once purchased, you or your fiancé can begin to shop for ring insurance providers, or purchase a rider (insurance extension) through existing homeowner or renter policies.

$110,000 Non-Pecuniary Assessment for “Likely Permanent” Vertigo

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, assessing non-pecuniary loss at $110,000 for chronic vertigo symptoms.

In today’s case (Wright v. Mistry) the Plaintiff was involved in a 2006 collision.  Liability was disputed but the Court found the Defendant fully at fault.

The Plaintiff suffered chronic vertigo and an exacerbation of pre-existing depression.  In assessing non-pecuniary damages t $110,000 Madam Justice Choi provided the following reasons:

[54]         While each case depends on its own facts, the award should be fair and measured against other similar cases. In Stapley v. Hesjlet, 2006 BCCA 34 at paras. 45-46, the Court of Appeal set out a non-exhaustive list of factors to be considered in making this award. These include the age of the plaintiff; the nature of the injury; severity and duration of the pain; disability; impairment of life; impairment of family, marital and social relationships; impairment of physical and mental abilities; and loss of lifestyle. The plaintiff’s stoicism should not penalize the plaintiff.

[55]         Mr. Wright was 56 at the time of the accident and was 65 at the time of trial.

[56]         Mr. Wright suffered a number of injuries in the accident. He had soft tissue injuries that resolved within six months of the accident. He developed vertigo which has lasted for ten years and is likely a permanent condition. In addition, he has ongoing testicular pain from a fall related to the vertigo. His impairment also caused exacerbation of his pre-existing depression.

[57]         Mr. Wright noted that his vertigo has robbed him of much of his enjoyment of life, especially by limiting how much time he can spend with his grandson, and how they can play together…

[60]         I find the facts in Moukhine to be most helpful here. Moukhine considered a 53- year-old computer programmer who developed Visual Vestibular Mismatch after a motor vehicle accident. Madam Justice Watchuk awarded $90,000 for general, non-pecuniary losses.

[61]         Non-pecuniary awards will always turn on a complex factual matrix. I find, considering all of the circumstances, that $110,000 is fair and just compensation for Mr. Wright’s loss.

Easy-to-install water sensors help protect Ontario homeowners against costly water damage

Water damage is the #1 reason home owners need to make an insurance claim – and many of these claims are preventable. To help customers protect their homes, Northbridge Insurance has launched a pilot project that offers customers annual savings of up to $150 on home insurance when they purchase an Alert Labs Home Solution package, consisting of a Flowie water sensor and a Floodie companion sensor. Alert Labs sensors can be installed by homeowners in less than two minutes on municipal water meters – no tools or technical expertise required. They’re now available at a special rate for Northbridge Insurance customers, just in time for spring weather.

Designed to detect potentially damaging incidents like leaks, power outages, temperature fluctuations, and floods, Alert Labs sensors send alerts to homeowners on their computer or mobile device in real-time when something goes wrong. Each sensor is equipped with a battery back-up and works using a cellular connection not Wi-Fi, so they’ll continue to work in a power outage – right when they’re needed the most.

“Our technology tracks and analyses water consumption, and customers are notified of incidents that could point to a leak, such as continuously running water,” explained Alert Labs CEO George Tsintzouras. “This makes us different from a lot of other solutions that focus on alerting customers after a flood has taken place. Our goal is to help homeowners avoid the expense and hassle of water damage in the first place with technology that’s easy to use.”

Alert Labs sensors also allow customers to capture and analyze water consumption, which can lead to important savings when it comes to costly utility bills. How significant are the savings Alert Labs customers stand to gain? “A single toilet leak can cost up to $600 per year in wasted water,” said Alert Labs CEO George Tsintzouras.

“While we’re here for our customers when they need us, we know that no one wants to come home and deal with a water damage claim,” said Ilda Dinis, VP of Customer Experience and Marketing for Northbridge Insurance. “We’re always looking for innovative ways to help our customers protect what matters to them, and partnering with Alert Labs is a great way for us to do that.”

“We’re excited about this opportunity to partner with Northbridge Insurance and their broker network,” added Tsintzouras. “In addition to saving money and avoiding damage, reducing wasted water saves valuable natural resources – which is a benefit to all of us.”

The pilot project is currently underway, and was launched in collaboration with Northbridge Insurance broker partners that focus on areas in Ontario where the risks of water damage are especially high. Ontario homeowners can visit www.nbins.com/alertlabs to learn how they can help protect their homes from water damage – and save on insurance.

About Alert Labs: Alert Labs is an IoT technology company based in Kitchener, Ontario. Alert Labs is building affordable and reliable sensor-networks for residential and commercial property owners. Alert Labs’ simple-to-deploy sensors can be placed on water meters, sump pumps, furnaces, near toilets and other appliances to detect water leaks, floods, power issues, and other events. Customers receive real-time alerts and insightful data analytics via SMS, email, and the Alert Labs app. Visit Alert Labs at www.alertlabs.com.

About Northbridge Insurance: Northbridge Insurance is one of Canada’s leading insurance companies. Working with our broker partners, we focus on understanding the needs of our customers and on creating solutions that help make their lives a little easier when it comes to protecting their homes, cars and businesses.

Northbridge Insurance Logo is a trademark of Northbridge Financial Corporation, licensed by Northbridge Personal Insurance Corporation (insurer of Northbridge Insurance policies).

SOURCE Northbridge Insurance

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