Alleged Insurance Fraud Makes a Big Splash

Albert Conforzi

Toronto Personal Injury Lawyer Albert Conforzi - I read with interest about the recent arrests made in alleged fraudulent staged collisions in the GTA. It is likely we will never hear whether a single conviction takes place.

The Insurance Bureau of Canada (IBC) spent a total of 18 months investigating 9 collisions before they turned it over to the police. One of these collisions involved a van that sat 5 passengers where there were 7 claims. One wonders how long it took for that investigation. The IBC claims that claimants would receive up to $75,000 for participating in the scam.

Those who are in the system know that this cannot be factually correct. These were "soft tissue claims," which are routinely treated as minor injury claims by the insurance industry. For these injuries, there is a treatment cap of $3,500, including assessments. A treatment cap means that claimants don't get the money - it goes to the clinics. A clinic would not stay in business very long by paying people $75,000 for a maximum return of $3,500.

That's not all. A soft tissue claim in tort would be subject to a $30,000 deductible. Insurance companies like Aviva - the biggest insurer in Ontario -  refuse to pay these type of claims all the time. It is again difficult to believe that this scam would work against such a sophisticated and organized industry.

Insurers are supposed to treat their customers with the utmost good faith, and not as adverse claimants. Unfortunately, that's not the way it is.

It isn't a stretch to believe that the insurance industry is doing some of their usual fear mongering. They have trotted out the same fraud statistics for the last 20 years.

Keep in mind that the cost of fraud is simply passed on to the consumer by insurance companies, and it's been that way forever. Think about it. If fraud has been roughly the same annual component of gross premiums since at least 1990 when they started crying about it, the very first year's increase in premiums would have covered and continued to cover fraud to today. Instead, the IBC continues to raise the fraud flag as the lever to extract reductions in coverage from successive governments that affect all consumers.

I'm not suggesting that fraud doesn't exist, nor that the people who practice it shouldn't be punished. But it is getting to the point where if a claimant has the temerity to make a claim for benefits which the insurance industry doesn't want to cover, then you, your doctor, your treatment facility and your legal representative are tarred with the same brush -- suspicion of fraud.

Those of us who practice in this area know that there is a 35,000 case backlog for mediation at the Financial Services Commission of Ontario (FSCO), the largest, longest (1 year) backlog since it was created in 1990. The backlog is there because the insurance industry lives in a culture of denial, treating every claim and claimant with scepticism and doubt. Insurers are supposed to treat their customers with the utmost good faith, and not as adverse claimants. Unfortunately, that's not the way it is.

Consumers and claimants should not be subject to intimidation, which stops them from advancing a legitimate claim. I have dedicated my legal career to making sure that injured claimants get what they deserve for their injuries, and I will continue to fight for my clients' rights, no matter how long it takes. I just wish they weren't made to feel like criminals in the process.

Albert Conforzi is a personal injury lawyer with Pace Law Firm in Toronto. His posts generally appear on Mondays.