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July 14, 2011

Insurance Fraud

The front page of the Toronto Star today headlines "Shady clinics bilk $1.3 billion in bogus car insurance claims scam".

The related article states:

Ontario’s car insurance industry is under attack by bogus medical clinics that use fake accident treatment charges to milk the system...

Travel around Toronto and you will see more and more of these rehabilitation clinics popping up. Anybody can open one and they are not regulated. One New York man with an auto insurance fraud conviction is listed as administrator of a Mississauga clinic.

...Here’s how it typically works.

Tow truck drivers or paralegals direct accident victims — drivers and passengers — to rehab clinics. They might get a finder’s fee of $1,000 cash or, in the case of paralegals, a percentage of the payout. It is not uncommon for a clinic to bill an insurer $40,000 over the life of a claim.

The accident victims the Star found often spoke little or no English. At the clinic they were handed forms to sign that gave the clinic the right to submit claims to their insurance firm and receive payments.

Here is a link to the Toronto Star's website.

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