Hamilton police break up insurance fraud ring
The Hamilton (Ontario) Police Service has completed a six-month insurance fraud investigation dubbed “Project Overhaul” that resulted in the search of two local auto body shops and the arrest of three local men.
In February, 2011 members of the Hamilton Police Service East End Detectives and the Major Fraud Unit joined in partnership with the Insurance Bureau of Canada (IBC) and insurance companies throughout the area to tackle a major fraud investigation involving fraudulent auto body repair work in the City of Hamilton.
This investigation was focused on local collision repair companies that were hiring the services of “Chasers” to attend collision scenes and Collision Reporting Centres to obtain business through fraudulent means and then inflating the cost of claims to defraud the insurance companies.
This investigation began after a 73 year old driver was flagged down on a city street by a ‘Chaser’ after she left the Mountain Police Station Collision Reporting Centre to report a minor collision. This driver was advised by the ‘Chaser’ that her vehicle was unsafe to drive, that he worked for a collision repair company, and that he would not only take care of her car and repair it, but that he would also put her into a rental vehicle while the work was being done.
When the insurance adjuster attended the auto body shop there was additional damage on the vehicle that had not been there when the collision had been reported to the police or when the car had been turned over to the body shop for repair.
At the same time, The City of Hamilton By-Law office had simultaneously began its own investigation into these shops after receiving several complaints with similar facts from other citizens involving the same ‘Chaser’ and collision repair businesses.
On August 24th, police arrested a 48 year old man, a 39 year old man and a 67 year old man, all of Hamilton. They were released on a Promise to Appear for a court date on September 26th, 2011 with a charge of Fraud Over $5,000.00 and Conspiracy to Commit Fraud. This investigation is ongoing and further arrests are expected.
“Today’s arrests are further evidence that insurance fraud is a real problem in Ontario,” said Ralph Palumbo, Vice-President, Ontario, IBC. “And when fraudsters cheat the system, honest policyholders end up paying in the form of higher premiums.”
Insurance fraud is big business in Ontario, said IBC. Today, IBC is investigating approximately 50 multi-case fraud projects in the Greater Toronto Area, many involving staged collisions and associated service provider fraud. But a recent IBC poll indicates that less than half of Ontarians – only 47% – understand the impact that insurance fraud has on premiums.
You might also be interested in: Ontario’s Auto Insurance Anti-Fraud Task Force builds on government initiatives
