New Michigan Anti-Fraud Taskforce

Matthew Worley, Esq.

Michigan Secretary of State Ruth Johnson, in coordination with police, prosecutors, state officials, and industry leaders has launched a new anti-fraud task force.  Fighting Auto Insurance Rip-offs, referred to simply as FAIR, is aimed at combatting a growing trend in Michigan – auto insurance fraud.

The scam involves individuals selling fake auto insurance policies.  The perpetrators then set up fake help desks so when a call is made to verify a policy, a real person answers and vouches for the non-existent policy.  However, as soon as the motorist is in an accident or tries to make a claim, they realize that there is no policy and their premiums having been lining someone’s pocket.

In July, Secretary of State Johnson’s office conducted a one-day review of the 15,000 registration renewals submitted in all the branches.  Of the insurance policies verified that day, an astonishing 16% were found to be invalid or fraudulent.  These fakes turned up in more than half of Michigan’s 83 counties.

The burden of these uninsured motorists is felt by every law-abiding Michigan motorist who follows the law and carries a no-fault policy.  The costs of having these uninsured motorists on the road rise into the hundreds of millions of dollars – which translates to higher insurance premiums.

The FAIR task force will explore new means to combat insurance fraud through procedural changes, new investigative efforts, and potentially new legislation.  It will include representatives from the Secretary of State’s office, the Michigan State Police, Michigan prosecutors, and several insurance industry organizations.

If you have questions about auto insurance fraud, or any other legal matters, contact the experts at Fausone Bohn, LLP at (248) 380-0000 or online at www.fb-firm.com.

 

To learn more about the new fraud task force, visit: http://www.insurancejournal.com/news/midwest/2013/09/19/305718.htm.

Auto Industry Looking to Create Insurance Fraud Authority

Mark Mandell, Esq

Michigan’s auto insurance industry is looking to tackle the issue of fake medical claims relating to auto accidents and scams that involve the billing of insurance companies for procedures more expensive than those actually performed. There has been a recent increase in such questionable claims, and Michigan now ranks third in the nation in such claims. Even Gov. Rick Snyder is onboard, addressing both the issue of auto insurance fraud and no-fault insurance in general during his State of the State address last month.

The robust no-fault insurance provision can be a “magnet for unscrupulous and fraudulent claims activity,” says Meghan Cass, an Allstate Insurance spokeswoman. Under Michigan’s no-fault law, it is required of motorists to purchase unlimited, lifetime medical benefits. While the concept has worked well, it has resulted in steady premium increases.

The proposed Fraud Authority would involve the ferreting out of what scams are taking place while providing financial support to law enforcement, prosecutors, and insurance associations. While insurers may have to dedicate up to $15 million per year towards such an authority; it would save millions more. It is estimated that 10% of all claims in Michigan are fraudulent. The result: the opportunity to save at least $40 million per year.

The high fraud rate in Michigan may be the result of other states cracking down, driving con artists to find new stomping grounds. While Florida and New York grew more stringent, questionable auto insurance claims related to medical issues rose 70% in Michigan from 2010 to 2011.

If the issue of a fraud authority does not get too tied up in the more controversial debate over no-fault insurance in general, some say the creation of such an authority may stand a chance this year.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

To learn more and read the original article, please visit: http://www.freep.com/apps/pbcs.dll/article?AID=2013302170152