Auto Insurance Scams

Auto Insurance Scams

OUR OPINION: GOAL SHOULD BE TO SHUT DOWN THE OPERATIONS ALTOGETHER

Cheating insurance companies is a preferred scam among white-collar criminals because the risks of being caught and punished are low and the payoffs high.

For this reason, the arrest of eight men in Broward and Miami-Dade counties in an alleged insurance-fraud scheme this week is encouraging news.

The arrests are part of a strategy to increase the risks to those who engage in insurance fraud. Success, however, will require more than a law-enforcement crackdown. Judges must play their part by issuing tougher sentences to those convicted. Professional associations that license doctors, lawyers and health facilities must get tougher, too, by suspending or revoking the licenses of their members found guilty in the schemes. Only through such cooperation will the word spread that this type of crime no longer is low-risk, high-reward.

The men arrested this week were ''runners'' who allegedly gathered data from restricted traffic reports to defraud auto-insurance companies. They are believed to be part of a team that includes doctors, lawyers, medical clinics and body shops that collude to file bogus claims and collect settlements from insurers. In the past, some insurers have been unwittingly complicit because they were reluctant to go after the gangs and content simply to pass on the losses to customers in the form of higher insurance rates.

But that scenario is changing fast. Insurers are collaborating with police to put the scam teams -- believed to number more than 300 in South Florida alone -- out of business. In the past two months, 50 such arrests have been made across the state and 900 in the past five years. Altogether, the losses caused by the scams statewide involve hundreds of millions of dollars. Still, the law hasn't caught up with the scope of the problem.

Two years ago, state lawmakers joined the hunt by beefing up laws against auto-insurance fraud. Violators now are subject to mandatory two-year sentences. But that's just a start. Lawmakers should adopt tougher laws that target those who organize and stage the scams.
Judges should forgo the slap-on-the-wrist treatment typically given to white-collar criminals. Ditto for professional associations. Doctors, lawyers or clinic owners who participate in this type of activity should know that they risk losing their license.