Jan 8, 2009

1. Phoney coverage. There have been scams preying on people with bad driving records attempting to lure them away from a legitimate company with a lower rate. A few years ago one such scam had people wiring money to pay their premiums. No legitimate company ever operates this way and those unfortunate enough to fall for this scam ended up paying thousands of dollars for coverage that never existed.
2. Cancellation scams. Lately, the approach has been to call people up, tell them their Insurance is being cancelled and get them to provide credit card or banking information over the phone. The caller will threaten to cancel the policy on the spot if the information is not received. Again, no company ever operates in this manner - even if a policy is cancelled for non-payment, you are given 15 days notice by law. Remember if you are in doubt about the legitimacy of the call, hang up and call your company or broker directly. As a general rule, never provide this information to an inbound call - always make the call yourself to the company/brokerage. That is the only way to know for certain who you are talking to.
3. Phoney products. A recent scheme was to sell 'insurance for a loan.' The approach was made to people with poor credit records, offering them a loan, but only if they first purchased 'loan insurance.' This coverage was usually quoted anywhere from $500 - $1,000 and again, the payment was usually done by wire transfers. There is no such coverage and sadly, many of the people who fell for this scam actually borrowed money to pay the 'Insurance' only to find the whole thing never existed and there would be no loan.