New ICBC survey shows that customers believe society simply tolerates people who commit insurance fraud

Source: ICBC

Results from a new ICBC customer survey* shows that 47 per cent of customers feel that committing auto insurance fraud is an accepted practice in B.C. In fact, 79 per cent believe that up to half of all claims made with ICBC contain an element of fraud.

While ICBC knows that the vast majority of its customers are honest, and that industry estimates say that fraud affects only about 10 to 20 per cent of all claims, the perception that British Columbians condone insurance fraud is troubling.

The survey showed that respondents:

  • believe that most ICBC claims contain an element of fraud,

  • have heard stories from other people of someone committing fraud (54 per cent), and

  • and personally know of someone who has intentionally committed fraud against ICBC (17 per cent).

    “It’s disturbing to hear from our customers that they feel our society has gotten to a point where committing fraud is simply accepted,” said Chris Fairbridge, manager of ICBC’s Special Investigations Unit. “To us, small lies and the exaggeration of truth are serious offenses and will not be tolerated. B.C. drivers are financially impacted by every case of insurance fraud, and we need the public’s help to identify and report fraud as soon as they suspect it.”

    The most common examples of fraudulent claims that ICBC sees are exaggerating the extent of injuries or damage to a vehicle, claiming old damage, claiming an inability to work despite having fully recovered from a crash, excluding a previous medical condition and providing a false or misleading account of how a crash happened.

    Last year, ICBC’s Special Investigations Unit completed more than 16,000 investigations for suspected fraud, of which 54% were found to contain an element of fraud. Guilty individuals have served jail time, paid substantial fines, had their claim denied or reduced, paid for the other party’s repair costs, denied future optional coverage and entered into a restorative justice program.

    “From using technology to catch anomalies, training our adjusters to sniff out scams and expanding our investigation team to catch fraud in the act, ICBC continues to ramp up its efforts to put an end to these dishonest acts, large and small,” said Fairbridge.

    Insurance industry studies estimate that fraudulent and exaggerated claims make up about 10 to 20 per cent of all claims costs, potentially adding more than $100 to everyone’s annual ICBC auto insurance bill.

    British Columbians can report suspicious activities related to insurance fraud to ICBC’s toll-free tips line at 1-800-661-6844 or submit a tip online. Tip information is confidential and callers can remain anonymous. For more information, visit icbc.com/fraud.

    *Survey conducted by ICBC through its Customer Advisory Panel. Total respondents = 1,373. Data collected April 12 – 19, 2018. 

Founder of Chinese company with billions in B.C. assets gets 18 years for fraud

SHANGHAI _ A court in Shanghai sentenced the founder of the Chinese insurance company that owns New York City’s Waldorf Hotel to 18 years in prison on Thursday after he pleaded guilty to fraudulently raising billions of dollars from investors, state media reported.

Shanghai’s No. 1 Intermediate People’s Court also ordered the confiscation of 10.5 billion yuan ($1.6 billion) in assets from Wu Xiaohui, the former chairman of Anbang Insurance Group, which had gained a reputation for ambitiously expanding into hotels, real estate and insurance from Canada to South Korea.

Wu, who founded privately owned Anbang in 2004, has been accused of misleading investors and diverting money for his own use. He was detained last year and regulators seized control of Anbang in February. He was shown on state TV in March admitting guilt.

Wu initially had denied his guilt at his one-day trial, according to an earlier court statement.

According to Xinhua, Wu concealed his ownership of shares in companies controlled by Anbang, filed false statements with financial authorities and lured investors by offering rates of return above that offered elsewhere. Much of the business relied on selling insurance products to raise investment capital.

It said he used more than 100 companies under his control to manage funds and authorities later recovered bank savings, real estate and other assets. Wu used his position to misappropriate 10 billion yuan ($1.5 billion) in Anbang’s deposits, according to Xinhua’s lengthy report.

Xinhua said the court determined the length of the sentence according to the facts of the case, the severity of the crime, and its “degree of social harm.” It said more than 50 people were present at the sentencing, including Wu’s relatives and journalists.

Anbang last month said it was receiving a $9.6 billion bailout from a government-run fund. That would mean the government fund owns 98 per cent of the company, wiping out most of the equity stake once held by Wu and other shareholders.

The company had engaged in a global asset-buying spree in recent years, raising questions about its stability. Anbang discussed possibly investing in a Manhattan skyscraper owned by the family of U.S. President Donald Trump’s son-in-law and adviser, Jared Kushner. Those talks ended last year with no deal.

The negotiations with Kushner Cos. about 666 Fifth Ave. prompted members of the U.S. Congress to raise ethics concerns.

The Anbang case is one of a string of scandals in what had been a stodgy Chinese insurance industry long-dominated by state-owned insurers. The industry’s former top regulator was charged in September with taking bribes and other insurers have been accused of reckless speculation in stocks and real estate.

The Communist Party has made reducing financial risk a priority this year after a surge in debt prompted rating agencies last year to cut Beijing’s credit rating for government borrowing.

Anbang is being run by a committee of officials from China’s insurance regulator, central bank and other agencies. They have said its obligations to policyholders and creditors are unaffected.

Over the years, Anbang grew to more than 30,000 employees with 35 million clients. It diversified into life insurance, banking, asset management, leasing and brokerage services.

Speculation is rife over possible sales of Anbang’s assets, which, in addition to the iconic Waldorf purchased for almost $2 billion include Dutch insurer Vivat NV, the San Francisco Westin St. Francis and hotels, real estate and insurance holdings in Canada, Belgium and South Korea.

Apparently cash, jewellery and gadgets aren’t the only valuables.

Read more

Fraudsters are misrepresenting themselves as IIROC-regulated investment dealers

The Investment Industry Regulatory Organization of Canada (IIROC) today warned Canadian investors not to be fooled by fraudsters attempting to illegally sell binary options under the guise of legitimate investment dealer firms regulated by IIROC.

“The investment firms and individuals regulated by IIROC must meet our high standards and deal fairly, honestly and in good faith with Canadian investors,” says IIROC President and CEO Andrew J. Kriegler. “Scammers are showing a reckless disregard for these very standards and are harming investors.”

Investors have recently contacted IIROC asking about organizations that claim to be regulated by IIROC, including organizations doing business as:

  • CDFtradeoption.com – operated by Westrade Holdings, Inc.
  • Globaloptionsmarket.net

These businesses are not regulated by IIROC. Binary options cannot be offered or sold to retail investors in Canada.  No IIROC dealers are authorized to sell binary options to retail investors in Canada. Investors contacted by anyone offering binary options should immediately report the incident to their provincial securities commissions. To learn more, visit: http://www.iiroc.ca/news/Pages/Useful-Links.aspx

Binary options typically originate as online scams, through ads on social media that point to seemingly legitimate websites. In some cases, victims receive unsolicited text messages or phone calls. To learn more about binary options fraud, visit: http://www.binaryoptionsfraud.ca/

Investors have also contacted IIROC about businesses selling bitcoin and other cryptocurrencies, claiming to be regulated by IIROC – and they are not. Some ask investors for dates of birth, Social Insurance Numbers and banking information for the purposes of identity theft. IIROC reminds investors to safeguard their personal information.

Investors can confirm the investment dealer firms regulated by IIROC by visiting its website: http://www.iiroc.ca/industry/Pages/Dealers-We-Regulate.aspx

Investors can also verify the background, qualifications and any disciplinary history of individual investment advisors registered with IIROC by checking its free, easy-to-use AdvisorReport database: http://www.iiroc.ca/investors/knowyouradvisor/

“Protecting investors and upholding the integrity of Canada’s capital markets are IIROC’s highest priorities,” adds Kriegler. “We urge investors to avoid ‘get rich quick’ scams and to be informed and intelligent consumers when shopping for investments or investment advice.”

***

IIROC is the national self-regulatory organization that oversees all investment dealers and their trading activity in Canada’s debt and equity markets. IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while supporting healthy Canadian capital markets. IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian debt and equity marketplaces.

SOURCE Investment Industry Regulatory Organization of Canada (IIROC) – General News

Toronto police allege four men involved in ‘sophisticated’ mortgage fraud

TORONTO _ A guilty plea from a lawyer who had fled the country gave investigators the information they needed to lay charges against four men in a $17 million alleged mortgage fraud involving high-end Toronto properties, police said Tuesday.

The men, who are all from the Toronto area and between the ages of 45 and 53, face charges including fraud, conspiracy, forgery and money laundering, police said.

Police allege the men took part in a “sophisticated and complex” scheme involving “several high-end properties.”

Lawyer Golnaz Vakili’s flight from Canada in March 2013 was the reason it took five years to bring charges against the men, said Det. Alan Fazeli.

“She was the lawyer that was registering a lot of these things,” Fazeli said. “She was a missing piece.”

Vakili has since pleaded guilty to charges related to facilitating the frauds, he said.

Fazeli said numerous different methods were used in the alleged frauds, many of which involved properties in Toronto’s upscale Bridle Path area.

“One of the methods that was used was fake individuals and shell companies had taken mortgages on some of these properties, and for all of them they had produced fake insurance and title insurance,” he said.

Police would not say how many properties were involved in the alleged scheme.

Law Society of Upper Canada documents say Vakili “participated in a massive fraud spree and multiple dishonest acts involving 13 different properties over a two-year period” beginning in 2011.

“She prepared and acted upon fake documents in support of other clearly fraudulent transactions,” a Law society hearing document states. “She repeatedly lied to her clients. She gave false testimony before the Deputy Director of Land Titles. Her clients lost just under $14 million as a result of her activities.”

Police said the four men two from Toronto and two from Richmond Hill, Ont. were arrested and charged last month.

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