Paul Sanchez
Insurance fraud is a common scam that affects many people. Scammers often pretend to be insurance agents or companies and use high-pressure tactics to steal personal information or money from their victims. Seniors are often targeted by these scams, especially for life and health insurance. Other common insurance scams include towing and auto repair scams, COVID-19 scams, and contractors offering to waive deductibles after a disaster. It is important to be vigilant and report any suspected fraud to the relevant authorities. Some signs of a potential insurance call settlement scam include requests for personal information, aggressive sales tactics, and unsolicited calls or emails. It is always better to be safe than sorry when dealing with potential scams.
| Characteristics | Values |
|---|---|
| Scammers pretending to be insurance agents | Asking for personal information, threatening to cancel policies, offering deals, selling policies over the phone |
| Scams targeting seniors | Life and health insurance scams, high-pressure sales tactics, requests for personal and financial information |
| Staged accidents | Intentionally causing accidents to file fraudulent or inflated insurance claims |
| Towing and auto repair scams | Uncalled-for tow truck drivers, disreputable repair shops |
| COVID-19 scams | Offering vaccines, testing, or vaccination cards in exchange for financial information |
| Scam format | Phone calls, emails, mail |
| Spam calls | Pre-recorded messages, robocalls, auto-dialers |
| Scam actions | Withholding settlement checks, forging signatures, stealing insurance payouts, depositing money in their account, not presenting claims truthfully |
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What You'll Learn
Unlicensed insurance companies
Unlicensed insurers often try to sell policies over the phone, and may use high-pressure sales tactics, requesting personal and financial information. They may also offer to waive deductibles, which is illegal without the insurer's consent. They may also try to sell fraudulent policies to businesses, or sell policies for medical malpractice, commercial general liability, contractor performance bonds, and auto liability coverage for truckers.
To avoid these scams, do your research. Verify the company's license with the relevant state authority, such as the Texas Department of Insurance (TDI), which has a License Lookup Tool. Be suspicious of unsolicited offers, and never give out financial or personal information over the phone. If you suspect fraud, report it to the relevant fraud unit or helpline.
It is also important to be aware of other common scams. For example, scammers may pose as insurance agents or attorneys and ask for personal information or money, or they may pretend to be looking for love online and then ask for money. Be cautious of tow truck drivers that you or the police did not call, and always do your research before choosing a repair shop.
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COVID-19 scams
Since the start of the pandemic, thousands of fraudulent insurance schemes have emerged, all promising insurance for some type of COVID-19 coverage. Scammers are pitching low-cost "coronavirus" or "COVID-19" health coverage, promising full coverage at affordable prices. They use robocalls to falsely claim to be legitimate, mainstream insurance companies. People are asked to call a toll-free number, where a trained marketer may try to sell them coverage. Clicking a link to the so-called insurer may also load malware onto a person's device.
COVID-19 scammers have been contacting people through robocalls, regular phone calls, text messages, email, and even in person. They have targeted consumers of all ages to pitch fake COVID-19 insurance deals, but they appear to be contacting senior citizens more often than others. Seniors are being targeted by COVID-19 robocalls and other scams that ask for their Medicare numbers. Scammers later make bogus claims against the senior's Medicare account.
Scammers may also use COVID-19 as an excuse to pose as health authorities and demand sensitive personal information that could be used in a bogus claim. Victims may then get their identity stolen or used for illegal activities. Bogus travel insurance policies that claim coverage for trip cancellations related to COVID-19 are also on the rise. It is important to note that most travel insurance policies do not cover pandemics, so COVID-19 coverage is an immediate red flag.
If you think you have been scammed, report the incident to the Federal Trade Commission. You can also submit an official complaint to the Coalition Against Insurance Fraud. Write down as much information as you can about the scam, including how much money you lost. Then, contact a local insurance attorney for assistance.
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Contractor fraud
One common scam involves a contractor knocking on your door and offering a great deal on an ad hoc project, such as paving your driveway, because they claim to have leftover materials from a previous job. They may then disappear with your money, delay the project, or do shoddy work that is not worth the price you paid.
Another scam involves contractors going door-to-door after a natural disaster, offering to manage your insurance claim and repair your home. They may take your insurance money and perform substandard repairs, pocketing the difference as profit, or they may simply take the money and leave town.
To protect yourself from contractor fraud, it is important to conduct thorough due diligence when selecting a contractor. Ask for references and check them carefully. Get multiple estimates in writing and ensure you have a comprehensive written and signed contract before any work begins. The contract should include contact information, start and completion dates, a detailed description of the work, material costs, payment arrangements, warranty information, and all verbal promises by the contractor. Verify the contractor's licenses and insurance and confirm they have obtained the necessary building permits.
If you suspect contractor fraud, gather evidence such as invoices, receipts, emails, text messages, photos, and videos of the work done. Keep detailed records of all communications and transactions related to the project. Consult with an attorney who has experience in real estate and construction law to discuss your options, which may include filing a lawsuit, pursuing arbitration or mediation, or filing a claim with your insurance company.
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Scams targeting seniors
- Telemarketing Scams: These scams involve fraudsters posing as authority figures over the phone to gain the victim's trust and solicit personal information or money. Successful telemarketing scams can lead to the victim's name being shared with other scammers, making them a repeated target.
- Investment Schemes: Scammers target seniors looking to safeguard their retirement savings with various fraudulent investment schemes, such as pyramid schemes or complex financial products. They may also take advantage of seniors who own their homes, increasing the potential dollar value of the scam.
- Impersonation Scams: Fraudsters pretend to be government officials or representatives from agencies like the IRS to steal sensitive personal information and money. They may pressure victims into making immediate payments through unconventional methods like gift cards or wire transfers.
- Charity Scams: Scammers approach seniors in person or via phone calls, claiming to be collecting donations for a worthy cause. However, they have no association with the charity and are only interested in taking the victim's money. These scams often occur after natural disasters or local emergencies.
- Internet Scams: Seniors may be targeted by automated internet scams, such as fake virus-scanning software that installs malware or tricks victims into paying for unnecessary programs. They may also receive phishing emails pretending to be from legitimate companies or institutions, requesting updates to their personal information.
- Insurance Scams: Seniors are particularly vulnerable to insurance fraud, especially life and health insurance scams. Be cautious of unsolicited calls or emails from insurance companies or agents trying to sell policies or requesting personal and financial information. Unlicensed insurance agents may also threaten to cancel your policy if you don't provide certain information.
It is important for seniors and their loved ones to be vigilant and informed about these scams to protect their financial well-being and personal information.
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Spam calls and robocalls
Phone companies and apps use advanced tools to try to identify and block these unwanted calls. They look at call behaviour and spam reports to determine whether to flag a number. Caller ID screens may display warnings such as "Spam Risk", "Scam Likely", or "Scam Risk" to indicate that an incoming call is likely spam. These labels are generally accurate, but not perfect, and legitimate calls can sometimes be wrongly labelled.
To avoid spam calls and robocalls, you can utilise the following methods:
- Join the National Do Not Call Registry by calling 888-382-1222 or registering online at DoNotCall.gov.
- Use a spam-filtering app, such as Mr. Number or AT&T Call Protect, which blocks known spam numbers and scam calls.
- Utilise built-in phone tools, such as "Silence Unknown Callers" on iPhones or spam protection on Android devices, to automatically filter unknown numbers and suspicious calls.
- Samsung phones offer Smart Call, which informs you if an incoming call is from a known robocaller.
- Report fraudulent calls to local authorities or consumer protection agencies to improve spam detection systems and protect others.
By combining these methods, you can significantly reduce the number of spam calls and robocalls you receive and protect yourself from potential scams and fraud.
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Frequently asked questions
Here are some common ways to identify insurance scams:
- Unlicensed insurance: It is illegal to sell insurance in some states without a license.
- Telephone and email scams: Be wary of phone calls and emails from people claiming to be your insurance company or agent wanting your personal information.
- COVID-19 scams: Beware of calls and emails offering COVID-19 vaccines, testing, or vaccination cards in exchange for your financial information over the phone.
- Offers to waive the deductible: It is a crime for contractors to offer to waive the deductible without your insurer’s consent.
- Staged accidents: This is when a person intentionally causes an accident to file a fraudulent or inflated insurance claim.
- Towing and auto repair scams: Be cautious of tow truck drivers that show up at the scene of an accident without being called.
- Medical identity theft: Do not give out your personal medical information and health insurance policy information.
Some red flags of insurance scams include:
- Delays in responding: You deserve prompt responses and updates.
- Aggressive solicitation: Be suspicious of attorneys who aggressively approach you immediately after an auto crash or calamity.
- High-pressure sales tactics: Be cautious when an insurance company or agent you don’t know contacts you out of the blue using high-pressure sales tactics.
- Requests for personal and financial information: Do not provide personal and financial information to unsolicited callers.
If you suspect an insurance scam, you should:
- Contact your insurer, state insurance fraud bureau, and the police.
- Notify your auto insurer if you suspect a towing scam.
- Keep a phone log, all emails, paperwork, and correspondence.
- Insist on seeing and signing all insurance checks.
- Require a written settlement statement.
