Toronto area police announced today that they have laid nearly 200 charges, including First Degree Murder, against members of “several organized crime groups working within the towing industry.” In a video released this morning, Superintendent Mike Slack of the York Regional Police reported that the crime groups “have used violence and property damage as a means to gain control and territory.” It is not just the revenue from the towing of vehicles that drives the criminal behaviour, he said, but “a more significant source of profit from the frauds following the initial tow.” Those involved would “stage collisions using drivers they recruited.” (See more below.) Also the tow companies partnered with auto repair shops as well as car and truck rental companies to carry out their frauds.
A leading Canadian insurer, Aviva, previously carried out its own investigation into auto insurance fraud which it estimated costs Canadians more than $2 billion a year and Ontario consumers approximately $547 million annually.
Aviva carried out a yearlong secret operation using its fraud investigation team. Throughout 2017, Aviva purchased ten cars which investigators and automotive experts deliberately crashed and damaged. It then retained experts who carefully examined and assessed each car to calculate the actual extent and cost of repair. Equipped with hidden cameras, the damaged cars were positioned near provincial highways at random locations in the Toronto area to simulate collisions. Undercover investigators posing as drivers, equipped with recording equipment, waited for assistance. Using this equipment they recorded and tracked the entire process from the time assistance arrived at the collision scene until damaged cars were repaired and invoices submitted. The evidence gathered during this investigation revealed nine out of ten cases involved fraud.
The techniques included causing additional deliberate damage (hidden camera footage caught auto body shop employees deliberately causing damage to cars), wrongful billing and repairs, and billing for services not provided.
Commenting on the investigation, Gordon Rasbach, Aviva Canada’s Vice President of Fraud Management, said, “This amounts to a national scandal. However, we recognize that not every tow truck operator or body shop is fraudulent.”
Staged accidents – how to recognize them and what to do
Contributing to the insurance cost burden on consumers is the deliberate causing of accidents to generate claims for property damage and personal injury. This is not a new phenomenon by any means – I recall when I practised law in the 70s and 80s handling insurance company defence work, investigation established that a small number of accident claims arose from such staged accidents. However, as reported today, it has become a more prevalent activity of organized crime. The most common technique, used to cause rear end collisions, is known as the “swoop and squat.” The Insurance Bureau of Canada has posted a helpful primer on this subject on its website which includes videos showing the various types of fraudulent collisions. Click here to view.
Ontario drivers, who pay the highest prices in Canada for auto insurance premiums, should hope that recommendations made by Aviva and others will contribute to reducing the loading resulting from criminal activity.
photo kitchenertoday.com