Local Investigators Learn Fraud Detection as Insurer Sets Car on Fire

Insurance fraud is the second most costly white collar crime in America (behind tax evasion), with auto insurance scams playing significantly into the scenario. Whether it’s a staged car crash, car arson or exaggerated injuries and suspect medical billing, criminals are creating new ways to cheat the auto insurance system, necessitating the creation of groups like the Mercury Insurance Special Investigations Unit (SIU).

Mercury Insurance intentionally torched a car on Monday to highlight auto insurance fraud. The torched car was then used at a three-day clinic in which Mercury SIU investigators and law enforcement learned how to inspect cars for possible fraud. The training took place at the St. Petersburg Fire Training Academy.

“Insurance fraud is not a victimless crime,” says Ray Gomes, Mercury’s SIU manager in Florida. “These types of rip-offs annually cost families an average of $400 – $700 in increased premiums.”

Florida ranks first nationally in most staged auto accidents, with Tampa, Miami and Orlando currently placing in the top-five. The Insurance Information Institute estimates that auto insurance fraud will cost Floridian auto policyholders up to $1 billion in 2012.

“Florida is a hotbed for auto insurance fraud, and oftentimes it’s very difficult to detect,” says Gomes, a former regional vice commander of the Air Force Office of Special Investigations.“There are some telltale signs, however, and we wanted fellow investigators and law enforcement personnel to be able to identify them. This is why we burned a car to the ground and then worked with local investigators to help them identify arson-related fraud. “It’s a non-stop battle against organized crime syndicates and everyday rip-off artists,” says Gomes. We’re the CSI guys from the insurance industry – but with a lot less notoriety.”

Source: Mercury Insurance