How to avoid tow-truck scams and auto-insurance fraud | Blog

How to avoid tow-truck scams and auto-insurance fraud

By Staff Writer | July 15, 2020

Toronto Police Service (TPS) has laid more than 50 charges against 11 people, including a police officer, for fraud involving tow-truck companies.

Constable Ronald Joseph, 47 from Toronto, faces charges for breach of trust and theft, according to a TPS statement issued on June 22. 

The arrests were made as part of Project Platinum, a joint-forces investigation on organized crime groups working within the towing industry. Tow-truck companies have been engaging in a violent rivalry, fighting over financial profits from towing vehicles in the Greater Toronto Area.

Several tow-truck employees from different companies used stolen police radios to learn about traffic collisions so that they can arrive on the scene before other tow-truck drivers. A TPS officer stole at least one radio. One driver broadcasted the radio’s encrypted transmissions to other tow-truck drivers for a monthly fee. 

The latest arrests cast the spotlight on auto-insurance fraud involving tow companies, auto-repair shops and car and truck rental companies. 

Bryan Gast, national director of investigative services with the Insurance Bureau of Canada (IBC), said criminal actions stemming from insurance fraud not only put consumer safety at risk but also hurt their pockets. 

“Insurance fraud costs Canadians in added insurance premiums and strains our already burdened health care, emergency services and court systems,” said Gast. 

At a TPS press conference held on June 22, Superintendent Domenic Sinopoli responded to a question on how deep-rooted corruption is in the towing industry. “The industry is rife with corruption. That doesn’t necessarily mean that all tow truck drivers are corrupt,” said Superintendent Sinopoli. “There are certain individuals that are taking advantage of the system and the opportunities available to them to facilitate their business interests.” 

Insurance fraud scams cost Canadians well over $1 billion a year in added insurance premiums, according to IBC. Auto-insurance scams are commonly perpetuated in five ways

  • Overbill insurers by inflating repair costs;
  • Stage collisions with unsuspecting drivers to make them seem at fault;
  • Sell stolen cars with false vehicle identification numbers to unsuspecting consumers;
  • Provide false information on auto-insurance policies to reduce the driver’s risk profile and the amount of premium paid; and 
  • Get claimants to sign blank accident-benefit forms or forge the signatures of medical practitioners to bill insurers for services that were not provided.

To avoid being a victim of such scams, the IBC recommends that drivers call their insurance representative as soon as possible to report the collision and seek advice on towing and repair options.

Drivers have the right to decide who can tow their vehicles and to which location, unless otherwise directed by police. Before towing, the driver must sign a permission-to-tow form, and the towing company must provide an itemized invoice to the driver, who can pay with a debit or credit card. 

Drivers are also advised to decline offers to store their vehicles in a compound yard unless directed by an insurance representative to do so, refrain from signing a blank contract and take referrals from towing companies.

Other ways to avoid being defrauded after a collision include: 

  • Contact your insurance company if a stranger tries to steer you to an unknown body shop, doctor, chiropractor or legal representative;
  • See medical and legal professionals you know and trust;
  • Contact medical and legal licensing regulators in your province to ensure that your service providers are licensed and that no complaints have been lodged against them;
  • Know what your medical benefits cover; 
  • Keep detailed records of medical appointments, including locations, names of practitioners, diagnoses, services rendered, and medication and equipment prescribed.
  • Compare records against statements from the insurance company to ensure the bills are accurate.