When it comes to address fraud, the concept is fairly simple on paper, but in reality, a fairly innocuous action and thought process could prove hugely financial and legally detrimental to all parties involved.
So you live in Etobicoke, a community in the west-end of Toronto (great choice), but you work downtown. Thankfully the parking you would’ve had to pay for, is covered by your work and the drive you make each morning is all the better for it. And just to save some extra cash, your insurance is registered to your brother’s house who lives in Peterborough. It’s expensive to live in the city so you fib a little, no biggie. Except for the fact that you’ve now committed address fraud, which under Canadian law, could land you a hefty fine or extreme cases, jail time.
And I know, it seems rote and a little outlandish, because hey, it’s car insurance after all. But as we found out after speaking with an insurance broker, who throughout the piece, goes by the name of Zach* out of respect for their privacy, you trying to save a few hundred dollars on car insurance is causing giant headaches for everyone else.
“Many people may not consider it fraud per say, due to the soft nature of how it works, like it’s almost this accepted thing, to own a car in a higher risk area,” Zach said in an email interview. “ Further, I truly believe very few of these people realize the repercussion of this, and have little idea they could potentially end up in jail.”
One of the systemic issues that feed into insurance fraud, is this issue of false documentation, specifically where you’ve registered car. Because while underwriters are focused with traditional scams and fake claims (think staged accidents or overbilling practices on accident benefits) very rarely are they equipped with the right tools to deal with the amount of address fraud they seem to be seeing. Without a sure-fire denial and facing a court case, insurance companies are likely to settle and eventually we’ll bare those consequences in rising rates.
“The underwriters who are on the front lines of approval, do not have really have the tools to combat address fraud, as it’s not really something that insurance reports and driving records will show,” Zach said. “Realistically, there is very little data to underwrite on. Sure, if the client has previously lived in Toronto, and now is setting up a policy in Northern Ontario, it could be ‘suspicious’ but they could have also legitimately moved.”
I know this sounds grave and self-righteous even, but to be honest, while I knew address fraud existed before writing this piece, I couldn’t necessarily quantify it on an everyday level as it could pertain to me. And in no way is this piece a condemnation or an attempt to make people feel stupid, we at Canadian Fraud News just thought this could topic would make for an interesting article.
The thing that Zach stressed throughout our interview was the need to educate people on the easy-to-miss pitfalls that could land you in an unnecessary situation. And while there’s certainly a lot of avoidable mistakes an excerpt a piece that InsuranceHotline.com ran recently, breaks down highlights the potential upside to all of this.
“When you shop around for car insurance rates, you’re looking for the best price possible. If fewer fraudulent claims make it through the system, insurance companies can instead lower rates and offer everyone a better deal.”
Yes, this sounds like common sense. But hey, what’s a reminder if not to set your mind at ease.
Read our last CFN original: New to Netflix, two fraud films with polka music at the heart of the matter.