Tag Archives: NICB

Who Is the MIG (Manufacturer’s Information) Group?

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Imagine you’re one of our law enforcement partners, and you’ve just pulled up and witnessed the final moments of a hit and run accident. It happened so fast, you didn’t have time to write down the license plate, or even get a good look at the driver. You look at the scene of the crime and notice a few pieces of the vehicle scattered all over the street. You have no identifiers for this vehicle, except you know it was a red Ford.

Amazingly… NICB can help! You call our Investigative Assistance (IA) Group directly or work with one of our Field Agents. The IA Group traces these parts back to their original Vehicle Identification Number (VIN). Many times, the Investigative Assistant can match component parts in our system, but if they are not successful, they call upon the Manufacturer’s Information Group (MIG) for help! You will soon realize that even though the MIG group isn’t made up of your typical crime fighters, they are a critical part in our fight against vehicle fraud and crime.

After the IA completes an extensive search in our database, a Manufacturer’s Liaison will then reach out to their contact at the manufacturer and request a VIN match to the component part numbers found at the scene. Once the search has been returned from the manufacturer, the Manufacturer Liaison notifies the IA, who in turn, notifies you, our law enforcement partner, or the case Agent. You are provided the full VIN for further investigation. The solution to this puzzle comes to play when you realize that the MIG Group has helped you positively identify this vehicle. Armed with this intelligence, you are able to tie this VIN to a fatal hit and run accident that occurred earlier in the day. You also match this VIN to an active theft from a neighboring state. Your ability to alert local authorities, in multiple jurisdictions, results in the recovery of this stolen vehicle and the arrest of the alleged criminal. Our member company is also pleased, as you’ve helped recover their insured’s vehicle and identified the person allegedly responsible for these crimes.

This was all possible by the great work done by the MIG Department. So you ask, “Who are these masked employees?” They’re five amazing team members, all working closely together with their participating manufacturing contacts. Specifically, they download, research, analyze, and process manufacturers’ shipping and assembly records. They then process and data enter VIN decoding into our VIN Editing Database (VED) files, where the Lone Ranger of shipping requests provides the final piece! This team works together like a well oiled machine, each gear dependent on the other, to make the full VIN journey.

They’re always searching for new ways to provide data assistance. For example, they recently unveiled their newest achievement, NICB’s Boat Database! Our MIG Technical Analyst initiated this one of a kind Boat database, in partnership with the National Marine Manufacturer’s Association (NMMA). Similar to the information captured from our vehicle manufacturers, this boat database provides a single resource for identifying marine vessels.

Many are not aware that the MIG Department also creates and produces our various NICB manuals. All of the data gathered from the group’s multiple manufacturing contacts are compiled and published in NICB’s passenger, heavy equipment and commercial manuals. In fact recently, the MIG Support Analyst has been working hard to transition these hard copy manuals, into the 21st Century. Electronic versions of the manuals will allow the content to be more accessible and convenient to users with current technology devices.

So, keep a look out…coming soon, to a smart phone or tablet device near you, might just be a downloadable E-Book version of one of our most popular manuals! Kudos to the MIG group and a big thank you, for all of the behind the scenes work they do!

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Tax Identity Theft: Yet Another Threat to the Public

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Tax Identity Theft

It’s tax time. And with the deadline for filing, April 15, looming in the not so distant future, many last minute filers scramble to get their returns completed. For many, there may already exist a great deal of anxiety around preparing their tax returns. However, as a USA Today article points out, there may be an even greater cause for anxiety. That’s finding out that someone else has used your name and Social Security number to file a return – and collect a fraudulent refund.

How prevalent is the problem? The USA Today opinion piece cites that in 2012, there were 1.8 million such incidents. Reportedly, one address in Lansing, Mich. was used to file 2,137 tax returns in 2010, and one bank account had been used to receive 590 direct-deposit refunds that totaled over $900,000. The article further goes on to cite that victims may spend six months or more than a year to resolve an identity theft case.

In response to the article, Beth Tucker, deputy commissioner of the IRS, acknowledged that identity theft is a complex issue to fight. However, the IRS has taken new steps to stop fraudulent refunds from being issued in the first place. For example, the IRS has strengthened its security filters for fraudulent indicators such as thieves attempting to file multiple returns to the same address or for a single bank account. With these stronger protections and security filters in place, Tucker asserts that the IRS has already blocked 2 million suspicious returns, and last year the IRS blocked more than $20 billion in fraudulent refunds compared to $14 billion in 2011. As for victims, the IRS reportedly issued 770,000 identity theft PIN numbers to protect confirmed victims to help resolve 500,000 cases from last year and an additional 200,000 cases have been sorted through and closed since January of 2013.

To learn more about Tax Identity Theft, visit the IRS website, or to learn more about other Identity Theft schemes, visit the NICB website.

Reference: USA Today, Friday, April 12, 2013, “As identity thieves thrive, IRS ‘moving backward’

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Just How Much Fraud Is There in the P & C Industry?

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Every week I get this question from some member of the media, “How much fraud occurs each year in the property and casualty industry?” My response is always the same, “About $30 billion,” and then I hope that the reporter doesn’t ask how that figure is determined.

The truth is, no one really knows how much fraud is perpetrated each year. We use that familiar figure because it’s been used forever. But do we really know what the fraud picture is?

According to research conducted in 1992 by the Battelle Seattle Research Center for the Insurance Information Institute, fraud accounts for about 10 percent of the property/casualty insurance industry’s incurred losses and loss adjustment expenses each year. A good number of potentially fraudulent claims are paid each year without being investigated due to the desire and requirements to make payments in a timely fashion and the difficulty in proving fraud. As a result, we only see a small percentage of those claims—and an even smaller percent are ever prosecuted.

The following graph shows incurred losses and loss adjustment expenses since 2006:
P/C Industry, Income Analysis, Source: “The Insurance Fact Book 2012 & 2013” with data from ISO, a Verisk Analytics company. ($ in billions).

So while the average estimated fraud loss over these six years is $31.33 billion, the annual figure swings from $28.39 billion to $34.45 billion—a $6 billion variance.

Taken as a whole, the average fraud loss of $31.33 billion is within parameters, especially when using imprecise language like “about $30 billion.” That is made painfully clear whenever a reporter who’s been around for a while observes that the number hasn’t changed in years.

That is generally followed by another inevitable observation that goes something like this: “It seems odd that for an industry loaded with analysts, data-mining tools, actuaries and claims professionals that it can’t develop a more reliable method to determine how much fraud it sees in a given year.” Good point.

If we approach this data from the perspective of a fraud-fighting metric, how do we describe the industry’s effectiveness? Since we’re identifying the scope of fraud as 10 percent of a number that is based on two loss-related variables, then any movement up or down is just a function of those variables and not at all tied to the industry’s fraud-fighting prowess.

Yet, we see case after case where multi-million dollar insurance fraud rings are busted all across the nation. The cases that NICB works with its SIU and law enforcement partners are complex. They run the gamut from local, significant loss episodes to national, multi-carrier, multi-claim scams that drain hundreds of millions of dollars from insurance companies and the federal government.

Maybe $30 billion is just the tip of the “fraudberg.” Maybe not, but who really knows?

ISO receives more than 235,000 claims a day. With that amount of data and the analytical and investigative talent available to the industry, it does seem awkward that we can’t do the research that realistically and reliably answers the question, “How much fraud occurs each year in the property and casualty industry?”

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NICB’s Legislative Efforts for Licensing and Regulating Roofing Contractors

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NICB’s legislative advocacy team leads the property/casualty industry’s anti-fraud and vehicle theft legislative and regulatory agenda. Our legislative efforts help bring about tangible solutions to protect the American public from potential scams and unfair practices. An example of this is seen in our current efforts in the licensing and regulation of roofing contractors.

The NICB supports legislation that would license and regulate roofing contractors in the state of Texas.  This year, two bills have been introduced –HB 888 and SB 311.  If passed, Texas would establish a roofing contractors’ advisory board under the Texas Commission of Licensing and Regulation.  The new law would establish license requirements; require criminal history background checks; and a public accessible license holder database.  More importantly, the law would prohibit rebating of any applicable insurance deductible and prohibit a roofing contractor from acting as a public insurance adjuster.        

Currently under Texas law, there is no authorized agency to assure consumer protections from those roofing contractors who receive pay for services never rendered, or deliberately cause damage to a structure.

NICB proposed the following recommendations:

  1. Require basic registration and licensing of roofing contractors in the state of Texas. 
  2. Require a written and signed contract between property owner and the roofing contractor which must include: scope of work and materials, cost of work and materials, and approximate dates of services.
  3. Roofing contractors must provide contact information, including a physical address.
  4. Roofing contractors must provide identification of the contractor’s surety and liability coverage insurer and their contact information.
  5. Roofing contractors must establish and provide notice of their policy regarding cancellation of a contract and refunding of any deposit.
  6. Roofing contractors must allow the property owner to rescind the contract and obtain a full refund within 72 hours of entering the contract.
  7. Roofing contractors cannot pay, waive, or rebate the property owner’s insurance deductible.
  8. Roofing contractors must hold in trust any payment until the contractor has delivered roofing materials to the jobsite or has performed a majority of the roofing work. 

NICB feels a roofing contractor should not act directly or indirectly as a public adjuster or act on the behalf of an insured to negotiate or affect the settlement of an insurance claim.  However, this does not mean that a roofing contractor should not discuss the scope of work with an insurer or insured.
 
While the significance of what happens in the state of Texas may not be readily apparent to those living in other states, we consider the whole picture. We all pay the cost for insurance fraud. Change in one state opens the door to effectively bring about change in others. To date, we have been successful in getting similar legislation passed in other states.

 

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Problem Child

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Have you ever witnessed a child exhibiting disruptive or antisocial behavior in the supermarket, retail store, or some other public place? It’s an unpleasant sight to watch, and it’s an even more embarrassing and agonizing experience for the parent who has to deal with it. What’s your typical response? Do you quickly walk past, grateful that it’s not your child? Do you empathize with the parent and offer assistance? Do you shake your head in disgust and blame the parents? Or does the thought cross your mind of what you would do in the situation to stop the inappropriate behavior? Well imagine that the problem child is fraud.

Fraud is a multi-billion dollar a year problem child that impacts each and every one of us. The NICB, its member companies, law enforcement, and other fraud-fighting agencies deal with its disruptive and egregious behavior every single day. The behavior isn’t in the form of a child having a tantrum, kicking, or screaming. Rather, it’s the multitude of costly and sometimes life-threatening fraudulent schemes that are perpetrated against the public. On any given day, disaster victims may be victimized twice when they’re taken advantage of by a dishonest contractor. A person’s financial stability and credit may be ruined by identity thieves. Innocent people may suffer injury or even lose their lives when individuals stage accidents. Consumers may pay more for goods and services when businesses are targeted for slip-and-fall and other fraudulent claims. There is no shortage of schemes, and sadly new ones emerge each day. The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.

Make no mistake: fraud is a problem child. But unlike those scenarios in which it’s someone else’s child and therefore their responsibility to deal with, we all pay the price for fraud. This problem child will continue to get bigger if the public and even organizations choose to ignore it, point the finger of blame in someone else’s direction, or wait for someone else to deal with it.

Take a stand against fraud. If you suspect fraud has occurred or witness fraudulent activities, report it. Contact the NICB at 1-800-TEL-NICB (835-6422), your insurance provider, or a local law enforcement agency.

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Sandy Flood Vehicles May Wash Up in Distant States

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With any significant flooding event many vehicles get inundated with water. Whether it’s for a few hours or several days, exposure to water is unhealthy for a vehicle’s electronic components. With the count of damaged vehicles from Sandy already at 230,000—the risk of flood vehicles entering the commerce stream as used vehicles is high. Even as programs like NICB’s VINCheck and the National Motor Vehicle Title Information System have come online since Hurricane Katrina to prevent this sort of fraud, the possibility still exists for individuals to take flooded vehicles and resell them to unsuspecting consumers.

While the threat from this kind of scam is very real, consumers can protect themselves by following these tips.

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NICB Blue – The First Female Agents: Part II

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Sr. Special Agent Heidi J. (18 Years of Service)
What was your occupation prior to joining the NICB?
Prior to NICB, I was with the Hanover Insurance Company for eight years within the claim department. Most of the claims I investigated involved complex coverage issues, commercial liability and fatalities. I was very fortunate in my career there to have supervisors who allowed me to run with an investigation rather than referring the claim over to SIU whenever fraud was found.

Prior to that, I had a background as a medical assistant. However, one of the key things that helped me was having a brother who was eight years older than I. One of us was always under the hood of a vehicle that needed mechanical attention or that we’d damaged. That could have been a car, truck or snowmobile. So, I always had an interest in anything with an engine.

Why did you decide to work for the NICB?
In my years at Hanover, I thoroughly enjoyed the complex investigations. However, investigations were not necessarily the focus of my position. One of Hanover’s long-time SIU investigators knew that I had a strong interest in investigations and recommended me for the position when NICB’s “New England Region” office had an opening for New Hampshire. It was a perfect fit as I had just moved to New Hampshire. I’ve always appreciated NICB’s willingness to take the chance on me given that I did not have a law enforcement background.

What were your early experiences as an agent?
One experience that I’ll always remember was spending a frozen New England winter day with a former NICB/NATB (National Auto Theft Bureau) Agent who walked me through a salvage yard for hours and hours, looking at SVINs on every model of vehicle imaginable. I wondered how I could ever retain all of the information. I also recall working on the largest vehicle theft and fraud case the State of New Hampshire ever had. Part of the investigation allowed me to participate in a federal wire tap as a civilian ‘expert.’ Not coming from a law enforcement background was a mental challenge for me in getting my foot in the door with numerous agencies. I always had a comfort level interacting with the member companies. Once the officers knew that I was willing to be in the mud or snow or under a burned vehicle to identify it, enabling them to stay clean, they were very welcoming.

What has been the most important thing that you’ve learned in your time as an agent?
I’ve learned to be flexible and willing to learn something new every day. Criminals have plenty of free time each day to initiate new schemes, so it’s a challenge to keep up with the trends. Also, each day you think you will be doing A, B and C. But at the end of the day, you’ve completed C, D and part of E!

What advice would you give to future women agents?
Recognize that you have a unique skill set that you bring to the job. Be tenacious and never give up. Being able to provide assistance and expertise is very rewarding. You will be treated as an equal and a respected partner in your investigations.  It’s an interesting and challenging job. And after almost 18 years, I can honestly say I still love it and wouldn’t want to do anything else.

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NICB Blue – The First Female Agents: Part I

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A few short weeks ago, the FBI commemorated the 40th anniversary of the first female agents serving in the field. We at the NICB would also like to pay tribute to four of our own female colleagues who are pioneers and have demonstrated excellence in their field as investigators. Over the next few weeks, we’ll be highlighting their stories as they provide insight into their experiences.

Sr. Special Agent Colleen C. (23 Years of Service)
Before joining NICB’s predecessor organization, the Insurance Crime Prevention Institute (ICPI), I was a local police officer. I was a patrol officer, photographer and identification officer (predecessor to CSI) and investigated sexual assaults. An agent from the National Auto Theft Bureau (NATB) came to teach my academy class about auto theft. I had actually heard of them before that because my father was a local police officer and had a knack for recovering stolen cars. I had majored in legal studies and received my masters in criminal justice while in the department. Prior to the police department, I worked for Family Planning. This helped me familiarize myself with medical forms and terminology which is now useful in medical investigations.

I saw ICPI as the good part of police work. I could investigate cases, but no one was bleeding on me, throwing up on me or threatening to kill me. I could be a detective and didn’t have to wear a bullet proof vest anymore.

The first ICPI meeting I went to, I looked around the room and realized I was the only woman there. I asked if the company had any women and was told there was one in Chicago. I was used to being one of a few women. My police department had three female officers. But my first agent’s meeting consisted of 75 men and me.

Women agents had to be very professional, always conscious of the image they were presenting. We had to remember that anything we did reflected on all the other women working with us. For a while, we formed the WNICB (Women of NICB), and I was honorary president. We would just meet for dinner when we found ourselves in the same part of the country. We had a lot of fun.

When I started, we had no computers. We kept paper case files, and we snail-mailed index cards to New York to the Property Insurance Loss Register (PILR) and Central Index Bureau (CIB ) to find out a subject’s claims history. I had a tour of the facility once. There were literally floors of giant rolodexes of index cards and lots of women running around in tennis shoes filing the cards. Our office had a teletype machine in it where we could check the Registry of Motor vehicles for stolen vehicles. We used typewriters back then and, in fact, I still have a NICB typewriter. We had so much paper. We all had storage issues. Eventually we got computers and dial up capability. I remember one agent from a rural area asking what you were supposed to do if the only phone was a “crank it up” phone.

All in all, we have come a long way in a relatively short time. We added the all claims database. Today we are mostly paperless, and we’ve gone from marveling at the addition of an exciting new dedicated fax machine plugged into a phone line to sending faxes from laptops using a wireless connection.  In addition, NICB’s image with the insurance carriers, law enforcement and the public has greatly improved. And we have improved their understanding of insurance fraud. When I first started, I brought a case to a police chief who told me it was a civil issue. I had to show him the law. In the beginning, there were no fraud bureaus. Often there were no laws against insurance fraud and no immunity statutes. Now, in my experience, juries don’t have any trouble comprehending the impact of insurance fraud, and they are oftentimes irate about the insurance fraud they see.

I have had some interesting cases. A postal inspector and I started the investigation that was later called “Plunderdome.” It was a body shop case that branched into public corruption. I had a staged accident ring case that had some links to terrorists. I have had cases that started with insurance fraud and included extortion, kidnapping, rape, murder, environmental violations, structuring, money laundering, tax evasion, arson, drugs, guns and prostitution. Witnesses and suspects have committed suicide, been murdered, gone to prison, returned to their native country, died of natural causes, and disappeared, presumed dead. I have been threatened a few times, subjected to veiled threats of violence, but more often threats of litigation. I have worked with law enforcement agencies at the local, state, federal and even international level. 

I have been with NICB almost 23 years now. Overall, it has been a good experience. I was able to travel a bit. I have met a lot of dedicated and talented people. We have accomplished a lot. Sometimes the job is frustrating. Unfortunately, not every case turns out the way we want it to. But we have had a lot of successes, too, and they make it all worthwhile.

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VINCheck–Seven Years of Free Consumer Protection

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Even as much of New Orleans remained underwater from Hurricane Katrina’s rampage, NICB went about preventing another calamity–the expected flood of water-damaged vehicles being sold to unsuspecting consumers around the nation. With estimates of Katrina-damaged vehicles approaching half a million units, NICB realized the public safety challenge that many of these vehicles would present if not quickly identified and tracked.

So it was against that backdrop that our member companies were asked to participate in a voluntary vehicle identification number (VIN) tracking project. Most of our member companies saw the benefit not only for public safety but for positive public relations that such a venture would inspire and they agreed to assist.

Thus the “Katrina Flood Vehicle Database” was launched on NICB’s website on October 17, 2005. It was an industry first and gave consumers unprecedented, free access to insurance company claims data on vehicles and boats that were damaged by Hurricane Katrina.

This resource was an immediate hit with consumers and numerous local, state and federal agencies and private sector entities across the nation linked their websites to NICB’s to allow their constituents easy access to this resource.

On November 7, 2007, NICB expanded this service to include information on unrecovered stolen vehicles and renamed it–VINCheck. In June, 2008, VINCheck was expanded yet again to provide data on vehicles that have been previously declared as salvage by participating NICB member insurance companies.

As it nears its seventh birthday, VINCheck remains the most visited page on NICB’s website receiving in the last 12 months over 1.6 million page visits. It is also frequently referenced in all kinds of media from local talk shows to national network radio and television stations and cable outlets.

A consumer recently posted her thoughts on our “Tell Us Your VINCheck Success Story” link on the NICB website. Here is an excerpt:

“It [2011 Mazda3i] had few miles and the seller kept telling me that the title was clean. He seemed suspicious though, and the price was a little too low. I decided to look up the vin number and through this site [VINCheck] I found out that it had had a salvaged title. The seller had been lying to me each time I asked. I didn’t purchase from him because he had lied repeatedly and didn’t know what else he could be lying about. I’m so glad that this site is around. It gives you the basic information for free! But the basic information was just enough to help me with this particular car. It then advises you to have the vehicle inspected if you are still thinking of purchasing it, and advises to have a full report done so you can see all the details. This site was easy to use, extremely useful, and free. I use this site on all vin numbers of vehicles that I am seriously contemplating. It has made my car search less intimidating. Thank you!”

This consumer is exactly the kind of person we had in mind back in 2005 when the Katrina Flood Vehicle Database came to life. We’re happy to say that today’s VINCheck continues to provide that same free access to millions of vehicle records–all made possible by participating NICB member companies and NICB’s 100-year commitment to fighting insurance crimes and vehicle theft.

For the price–nothing!–VINCheck remains the best vehicle history service in existence.

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NICB Named to New Fraud Prevention Partnership

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CEO Joe Wehrle to Represent Property/Casualty Insurers
NICB Press Release, Roger Morris.

The National Insurance Crime Bureau (NICB) has been named to the Executive Board of the newly formed Fraud Prevention Partnership, which was unveiled today in Washington, D.C.

“For the past two years, we have been working with the Secretary of Health and Human Services, the Attorney General and others in Washington to establish an information and data sharing effort aimed at detecting and preventing insurance fraud at the public and private sector levels,” said NICB President and CEO Joe Wehrle.

 “We are pleased to be asked to serve on the Council’s Executive Board to represent our 1,100 member companies who have a vital interest in preventing medical-related fraud. Every year, property and casualty companies pay out over $45 billion for medical coverage for their customers and other injured parties primarily related to automobile and workers’ compensation insurance policies. Unfortunately, there are medical providers, clinics and others who defraud the system, just as they do Medicare, Medicaid and the private health insurance industry.

“We know from our experience in investigating fraud in the property and casualty industry that there is a significant amount of crossover. The fraudsters don’t discriminate and they will steal from anyone. By sharing data and investigations among all insurers, we will be able to make a much more significant impact in the fight against these organized criminal rings.”

CEO Joe Wehrle will represent NICB on the Executive Committee.

About the National Insurance Crime Bureau: headquartered in Des Plaines, Ill., the NICB is the nation’s leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness. The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $339 billion in insurance premiums in 2011, or approximately 80 percent of the nation’s property/casualty insurance. That includes more than 94 percent ($156 billion) of the nation’s personal auto insurance. To learn more visit www.nicb.org.

 

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