Accident scam bilking insurance companiesPeter Levy, vice-president-elect of the Insurance Association of Jamaica. (GP)
Sat, March 30, 2013 - 12:00 AM
KINGSTON – Still grappling to contain the scourge of the deadly lottery scam, Jamaican police say they have uncovered an emerging insurance scam which criminals are using to bilk local companies out of millions of dollars.
Insurance company executives and police investigators say the scam is being perpetrated by a “very organised” group, who pay individuals to make false reports claiming that they were passengers in motor vehicles which were involved in legitimate crashes.
According to one senior investigator, these “victims”, who usually complain about whiplash and other injuries common in crashes, are paid as much as JAM$1 million (BDS$20 492) by the insurance company to settle their claims.
“We don’t know how they get the information [about the legitimate crashes] . . . . This is something new to the police,” the senior investigator said.
The Insurance Association of Jamaica (IAJ) confirmed that it was aware of the practice, which it says drives up the cost of insurance for “all the innocent people and all the good drivers”.
Seeking to explain this increase, vice-president-elect of the IAJ Peter Levy said if insurance companies make payments on claims that are not genuine, then it adds to their costs and “we have to charge more premiums to cover those costs”.
Levy said: “If the insurance companies . . . collect JAM $1billion in premiums in a year and that was sufficient to cover the claims and then you add another significant level of claims for fraudulent activities, the premium is no longer sufficient.”
He said in recent years, local insurance companies had seen a “dramatic increase” in claims for soft-tissue injuries with a significant number of them “coming from a handful of attorneys who seem to specialise in this field”.
“The sums [of money] involved make it vulnerable to fraud, but it’s hard for us to find any direct evidence of fraud,” said Levy, who has responsibility for general insurance at the IAJ.
He said insurance companies were seeing cases where injuries were exaggerated. There were other cases in which the person filing the claim was never in the vehicle “at all”, and there were instances where an accident did not occur.
“You get two people to collaborate with a story and you don’t need the accident anymore. The two supposed drivers go to the police station and report it and now there is a police record,” the IAJ executive explained.
“Often, the police are not necessarily going to the scene, unless it is a serious accident with significant life-threatening injuries or fatalities, so it’s very easy to get that into the record,” he added.
Senior Superintendent Radcliffe Lewis, who heads the Police Traffic Division, revealed that the police were aware of the scam and said preliminary investigations have indicated that “several prominent lawyers and doctors” are involved.
According to Lewis, the lawyers are responsible for recruiting the “stagers” – the persons who find the volunteers to be used in the staged motor-vehicle crashes – while the doctors charge a fee of between JAM $250 000 and JAM $300 000 to supply “medical certificates” that attest to the injuries supposedly suffered by these “victims”.
One investigator disclosed that he was aware of one case in which a motorist who was involved in a crash reported receiving a telephone call shortly after and was told that he was “suffering from whiplash and pain in the lower part of his tummy”.
“That person [motorist] was told that they can earn as much as JAM$1 million and was instructed which doctor to visit,” the investigator revealed.
Lewis disclosed that the police were aware of several cases that would be turned over to the Major Organised Crime and Anti-Corruption Task Force (MOCA) and the Organised Crime Investigation Division (OCID) for a joint high-level investigation.
He explained that the probe was being turned over to MOCA and OCID because the police want to nip it in the bud before it turns violent like the lottery scam. (Jamaica Gleaner)
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