Michigan SOS Plans to Use Better Technology in Effort to Stamp Out Fraud

Mark Mandell, Esq.

Michigan’s Secretary of State Ruth Johnson recently announced new plans to combat scammers who take advantage of vulnerable citizens by selling fake insurance. Johnson is looking to utilize cutting-edge technology and expand best practices in a move that is a part of ongoing efforts to stamp out auto insurance fraud.
The details of the plan include:

• A comprehensive review of her department's processes, technology and structure to determine how best to detect and deter fraud.
• Data analysis to identify signs in transactions that may indicate fraud.
• Expanding the verification of the thousands of insurance certificates the department receives from customers daily.
• An upgrade in case management software to give department investigators the best tools for tracking down fraudulent activity.
• A roundtable discussion with business leaders about fraud to seek their advice and ensure the department is following best practices.

The Secretary of State’s office is looking to use data analysis to compare elements of transactions with those of previous fraudulent ones. Similarities between one transaction and past fraudulent transactions can flagged and then alert the office that a fraud investigation may be needed.

The department has received funding to add staff to a new unit that will verify the validity of the 10,000 to 20,000 insurance certificates that come in through the mail each day from customers renewing their vehicle registration, in addition to the reviews already being done in Secretary of State offices. Plans are also in place to upgrade its case management software so department investigators are best equipped for tracking down fraud.

Some of these new initiatives are the result of recent recommendations from a task force aimed at the fight against auto insurance fraud. To read more on this task force, check out my past post on the Secretary of State’s efforts: http://michiganfraudlawyer.blogspot.com/2014/10/mi-secretary-of-state-looking-to-crack.html

It is refreshing to see follow-through from the Secretary of State on this issue, which affects so many Michiganders. Recent data shows that a whopping 16% of documents filed by motorists from 2013-2014 were fake. The outreach to the business community is also a critical point in the effort to keep the department at the forefront of protecting Michigan consumers from fraud.

If you feel like you are a victim of insurance fraud, contact experienced Attorney Mark Mandell with Fausone Bohn, LLP, at (248) 380-0000. Mark has over a decade of experience fighting for his clients’ rights.

MI Secretary of State Looking to Crack Down on Insurance Fraud

Mark Mandell, Esq.

Michigan Secretary of State (SOS), Ruth Johnson, convened a 56 member task force dedicated to addressing insurance fraud in the state. The task force and the SOS recently announced their 17 recommendations.

The recommendations come amid the announcement that the SOS uncovered that a whopping 16% of the documents filed by motorists from 2013-2014 were fake. And you need proof of insurance to receive a license plate in Michigan.

With 16% of documents being fake, one has to ask how that number got so high.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, said he believes the high cost of insurance is driving the search for phony insurance coverage. He recommended a $3 fee to ramp up enforcement efforts against fraud. The SOS task force, however, did not address that.  

Secretary of State Johnson claims the problem is costing Michigan motorists around $220 million per year – which she says is a conservative figure. That's because if a driver with fake insurance coverage gets in an accident, the other drive must pick up the tab for those with no coverage.

Johnson said all sort of crooks are in the insurance fraud game, including a lady working out of a church netting some $30,000 a month to the sophisticated Internet fraud artists who produce documents that look real but are not.

The state police, local prosecutors and the state insurance director are all in on fighting back and the SOS has reported that some reforms have already cut the bogus percentage in half.

The task force’s recommendations also include: streamlining prosecution of offenders, assisting law enforcement in verifying insurance during traffic stops, cracking down on unlicensed insurance agents, and establishing a new “fraud commission.”

If you feel like you are a victim of insurance fraud, contact experienced Attorney Mark Mandell with Fausone Bohn, LLP, at (248) 380-0000. Mark has over a decade of experience fighting for his clients’ rights.