Turning up the heat on fraud
Crime Stoppers teaming up with fraud coalition
FACT FILE
Insurance fraud costs Canadians close to $1.3 billion per year in increased premiums.
An additional $1 billion is paid out for police and fire investigations, doctors visits and court costs.
Fraudulent claims represent approximately 10 to 15 per cent of claims paid out.
Since the Insurance Fraud Coalition allied with Crime Stoppers in Ontario, anonymous tips have resulted in the prevention of $1 million in payouts for fraudulent claims, 37 arrests and 43 denied claims.

by Derek Neary
Northern News Services

NNSL (Mar 13/98) - From staged car accidents to inflated claims, insurance fraud is extremely costly to Northerners and other Canadians.

In an effort to "stop the bleeding" Crime Stoppers in the NWT and the Canadian Coalition Against Insurance Fraud announced a partnership Thursday morning.

"We intend to use the Crime Stoppers formula to fight insurance fraud across the Northwest Territories," said RCMP Sgt. Tom Steggles, who coordinates the program for Yellowknife's G division. Tips regarding cheating on home, business and car insurance are encouraged.

The Crime Stoppers program offers cash rewards for anonymous tips. Previously, the cash rewards were only payable for information that led to a criminal charge. Now, tips that lead to denied insurance claims will be eligible for payouts. Insurance investigators will judge the validity of the information offered.

The coalition will provide financial support to help cover the cost of the rewards. However, Steggles noted that only 10 to 20 per cent of informants claim their Crime Stoppers bounty.

According to Mary Lou O'Reilly, the executive director for the coalition, if insurance fraud was legal, it would be the second largest industry in Canada, second only to another illegal practice -- the drug trade.

"So for those people who are committing it, it's a pretty lucrative enterprise," she said. "It's just too costly a crime ... they're robbing the honest policy-holder."

Steggles said that, generally, suspicion of fraud of upwards of $2,000 range will trigger an RCMP investigation. Lesser crimes will be handled by the Insurance Crime Prevention Bureau, unless it involves a crime ring or another major crime such as arson.

Money saved through the partnership may translate into lower premiums for the consumer because insurance is a highly competitive industry, O'Reilly said.

"Realistically, would you expect your premium to go down tomorrow? No," she said.