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Accident Reconstruction Research: Insurance Fraud

ICBC UNCOVERS VICTORIA-BASED ALLEGED STAGED ACCIDENT RING

12 Area Residents Face Civil Action to Recover Settlements, Costs

VANCOUVER, March 12 /CNW/ - Twelve Victoria residents face civil action initiated by ICBC in the wake of allegations that they conspired to stage five accidents between 1993 and 1996 with the intent to collect payments for injuries and damages to their vehicles.

The civil suit, filed at the Victoria court registry this morning, alleges the men and women were, at various times, involved in minor accidents some of which were staged on quiet streets after dark when it was unlikely that any independent witnesses would see the incidents. The proceedings against all 12 are ``joint and several'', which means each individual is potentially responsible for the total damages that a judge may deem appropriate.

Nearly $204,000 was paid out or reserved in claims settlements, mostly in relation to ``non-objective'' injury claims - injuries such as whiplash which are difficult to objectively measure by medical practitioners. Additional costs associated with adjusting, investigating and taking legal action in the case could be $250,000.

ICBC is seeking repayment of the claims settlements, recovery of the cost of investigation and the administration of these allegedly fraudulent claims. As well, ICBC is seeking punitive damages and special costs.

``We will do everything in our power to ensure that honest claimants do not have to bear the burden of costs associated with fraud,'' says Neil Weatherston, ICBC Senior Vice-President of Claims Operations. ``By taking civil action in this and other cases, we are shutting down what we allege are operations designed solely to defraud ICBC and all other B.C. motorists.''

Weatherston credits the work of an observant adjuster in the Victoria Royal Oak Claims Centre who noticed a number of similarities in the circumstances surrounding claims filed by a small group of people. She subsequently worked with Bodily Injury Specialist Fraud Unit (BISFU) investigator Jim Kwan who was able to help piece together the evidence to take civil action.

``Our investigation has revealed a series of connections between these people that strongly suggests the accidents were staged,'' says Kwan.

Weatherston notes that filing a writ in civil court not only shuts down the alleged staged accident operation but it also serves as a warning to others who might try to defraud ICBC and its policyholders. Criminal charges, while still a possibility, have not been laid against the individuals at this time.

``We're convinced that taking strong action against fraud is `the right thing to do','' he adds. ``Not only does it help control insurance costs, but it also helps us provide better and more efficient service for the vast majority of legitimate claims that we handle.''

ICBC has several ongoing initiatives designed to prevent fraud and punish those who commit fraud - whether as individuals or part of a group. Last year, ICBC anti-fraud activities saved nearly $31 million from being paid out.

The Canadian Coalition Against Insurance Fraud estimates insurance fraud costs Canadians up to $2.3 billion each year. The coalition adds its public opinion polling indicates that the public agree that strong action should be taken against those who commit fraud and increase costs for honest policyholders.

The provincial government last year passed tough new legislation to increase penalties (fines up to $25,000, two years jail) against those found guilty in criminal court of defrauding ICBC. The July 31, 1997 law is part of the government's effort to keep auto insurance rates affordable through strong road safety and anti-crime measures.

People with information about auto insurance fraud can call ICBC's tips line at 1-800-661-6844 (toll-free) or 661-6844 in the Lower Mainland.

Backgrounder

• The individuals named in the suit filed today are: Robert John Galbraith, Wing Chun (Raymond) Wong, Wing Cheong (Steven) Wong, Bang Tu Lam, Ming Juen (Annie) Chang, Hue Trang Hua, Tinh Hon Truong, Tuyet Tran, Van Hiep (Kim) Tran, Gee Kong (Jimmy) Lam, Tat Yuen (Jerry) Ng, Mei Sim (Sandy) Ng, all of Victoria.

• The cost impact of insurance fraud on ICBC policyholders alone was estimated at up to $150 per Autoplan policy. ICBC anti-fraud work is helping reduce this figure.

• The Insurance Bureau of Canada's Coalition Against Insurance Fraud estimates insurance fraud costs Canadians up to $2.3 billion every year and that between 10 and 15 per cent of all types of insurance claims are either exaggerated or fraudulent.

• ICBC was one of the first Canadian insurers to establish a Special Investigation Unit to combat insurance fraud. Since 1975, SIU investigators have worked with ICBC adjusters who are trained to watch for signs of potential fraud.

• The work of SIU investigators and adjusters helped save ICBC and its customers an estimated $31 million in 1997 that otherwise could have been paid out in connection with fraudulent claims.

• SIU investigators work with police and other agencies when appropriate. Evidence gathered through investigations can result in criminal charges, civil actions or both. In other situations, a claim can be denied or, when confronted with evidence of potential fraud, a claimant may abandon the claim.

• ICBC uncovered a staged accident ring in the Lower Mainland last year. A favourable court ruling in a civil suit filed against more than 50 people enables ICBC to seize assets to recover costs of funds fraudulently obtained as well as costs of the investigation.

• Since it was introduced in October 1992, more than 16,000 people have called ICBC's anonymous telephone tip line (661-6844/1-800-661-6844) to report suspicious claims and other instances of potential fraud.

For further information: Brian Geary or Sam Corea or Wayne Ferguson at (604) 443-4650 (813-5166 cell) or (604) 661-1289 or (604) 661-6993 or Toll-Free 1-800-720-NEWS