Who’s Involved?

Paralegals/Lawyers

A legal representative can be an important resource for you as you pursue your insurance claim. Most lawyers and paralegals are honest, working in the best interest of their clients.

Regulators have issued Cease and Desist orders against specific paralegals for unfair business practices. One lawyer suspected of being involved in staged collisions left the country before there was an opportunity to have charges laid.

One scam involved a paralegal making off with their client’s insurance settlement. In this scenario, the legal representative negotiated a settlement with the insurance company for injuries suffered by their client, pockets the cheque and tells the client, a legitimate accident victim, that they got no compensation.

In response to inquiries from government about insurers’ experiences with paralegals, IBC recommended that there be rules in place dictating acceptable practices for paralegals, including a requirement for paralegals to have liability insurance to protect clients they treat unfairly.

Medical and rehabilitative care providers

The vast majority of medical providers are committed to helping their patients get better and only look to be fairly compensated for their work. However, there are those that, instead of healing the sick and protecting the innocent, abuse the public trust by "doctoring" insurance bills. They inflate bills or give unnecessary treatment in an attempt to collect as much money as possible. Participants may include chiropractors, physicians, physiotherapists, pharmacists and their office managers.

In many cases, the patient, satisfied that he or she is receiving quality treatment and service, is unaware of the fraud.

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Tow truck operators

An accident, no matter how minor, can be very stressful and confusing. And there are some people looking to take advantage of this time of uncertainty. Tow truck drivers may be paid a fee to refer accident victims to a particular paralegal. This is illegal.

A tow truck driver may also be paid a referral fee by a vehicle repair or body shop to have damaged vehicles towed there. This kind of tow truck driver is known in the industry as a “chaser.” Many “chasers” are owned or controlled by vehicle repair shops.

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Vehicle repair facilities

Vehicle repair facilities can be involved in a variety of insurance scams. Here are some of the more common ones:

• Burying the deductible - The car owner and collision repair shop conspire to make the insurance company pay the entire cost of the repair. One way to do this is for the body shop to install cheaper aftermarket, repaired or junk parts, but bill the insurer for original manufacturer parts. This may seem harmless, but repair with inferior parts could make a car unsafe. Also, proper use of deductibles keeps premiums affordable for all drivers.
• Chop shops - Collision repair shops sometimes serve as a front for an illegal operation where stolen cars are disassembled and sold piece-by-piece to other repair shops.
• Inflated damage estimates -Some dishonest shops will estimate charges for work that they don’t intend to complete. Shops may also inflate the estimate by purposely doing further damage to the vehicle.
• Kickbacks - Unscrupulous collision repair shop owners have been known to bribe insurance adjusters to send claimants their way.
• Airbag fraud - With airbags now coming standard in most new cars, airbag fraud is an emerging trend. Airbags are quite costly to replace and re-install, so if someone brings a car in for minor repairs after a minor fender-bender, a dishonest body shop can easily inflate the price of the repair by making it seem like the airbag deployed.
  
  A crooked repair shop can bill the insurance company $2,000 or more for a new airbag. If you’re lucky, they pocket the money and leave your airbag alone. A more greedy outfit might take your perfectly good airbag, sell it on the black market, and fill your airbag space with old rags, cardboard or beer cans. More likely, they will leave you with a stolen, previously deployed or salvaged airbag. You won’t know the difference until you are in an accident, but your family will be put at risk.