Beware Of Insurance ‘Seller Fraud’, which is common in Canada

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When you hear “insurance fraud” you probably think first of claims fraud – where people make bogus claims to try and get money from insurance companies for accidents or damage which never actually occurred.

Seller fraud is common in many regions of Canada. All Canadians are at risk for being targeted, especially those that are newcomers to the country and are less likely to know local insurance regulations.

Unlike claims fraud, seller fraud takes place when forged or fraudulent insurance policies are sold to unsuspecting Canadians.

Fraudsters offer discounted insurance in exchange for pink slips that are invalid or forged leaving victims open to a high degree of personal risk. Unfortunately, victims aren’t often aware of these risks until it’s too late.

Sonnet  – a new online insurance firm and part of Economical Insurance is releasing this information to empower Canadians to recognize and prevent potentially harmful scams before they happen by identifying and raising awareness of the two main kinds of seller fraud;

• Ghost brokers take money upfront, provide a pink slip showing proof of insurance then disappear on the customer. Sometimes the pink slip is a forgery, other times the fraudster sets up the policy and cancels it without the knowledge of the victim.

• Fake brokers will purchase policies with the name of the client. However, the policy will include incorrect information such as unlisted high-risk drivers or the wrong address to obtain favorable rates – making it invalid and worthless in a time of need.