Fraud Files: Colorado Contractor Arrested for Scamming the Elderly

A Denver, Colorado contractor has been charged with several counts of felony theft after allegedly scamming elderly homeowners through his roofing and restoration business.

Jonathan McMillan, 41, is the owner of Lifetime Roofing and Restoration. According to Jefferson County court documents, McMillan hired sales people to go door-to-door soliciting roofing business from homeowners with houses damaged primarily by hailstorms. Those employees were instructed by McMillan to have the homeowners sign contracts and collect as much insurance claim payments as quickly as possible.

To view more episodes of Fraud Files click here.

Fraud Files: Multi-Million Dollar Health Care Fraud

In this edition of Fraud Files we focus on a multi-million dollar scam in south Florida. Seven defendants including owners, doctors, a manager, and a laboratory representative of sober homes and alcohol and drug addiction treatment centers were charged for their participation in a health care fraud and money laundering scheme that involved the filing of fraudulent insurance claim forms and defrauded health care benefit programs.

Know Before You Tow!

As we’ve written in the past tow trucks scams are becoming a major issue across the country. The National Insurance Crime Bureau (NICB) is warning and educating consumers about unethical and illegal practices among some rogue towing and storage operators and repair shops around the nation.

In our latest episode of Fraud Files we take a look at how states are cracking down on illegal towing fees.

Here’s a list of the most recent legislative activity involving towing laws across the country:

California – Assembly Bill 1222, Signed Into Law – September 2015

* Prohibits a towing company from stopping at an accident scene unless summoned to the scene by the owner of the vehicle, owner/operator, or requested by law enforcement
* Establishing requirements to provide proof that a tow truck driver was summoned to the scene
* Require towing companies to provide a written estimate of all charges to the vehicle operator and a signature by the vehicle operator before proceeding with the tow and maintaining a cap on the amount of the tow
* Require towing companies to maintain a record of all towing documents for a period of 3 years and to make those records available for inspection by law enforcement
* Misdemeanor penalties

Illinois – Senate Bill 2261, Signed into Law – August 2016

* Penalties on towers who illegally solicit accident victims – Class 4 Felony
* Towers who violate the accident scene solicitation law can be sued by the vehicle owner and/or the owner’s insurer.
* Also created a statewide relocation towing commission tasked with examining the towing laws of the state and to make recommendations

Missouri – House Bill 1976 – Law Effective November 2016

* Prohibits a towing company from stopping at an accident scene unless summoned to the scene by the owner of the vehicle, owner/operator, or requested by law enforcement, unless it’s an emergency situation
* Allow vehicle owners access to storage yard and sets requirements for when storage yards to be open
* Requires towers to make available upon request a written estimate of all tow-related charges
* Requires a tow rotation list be maintained and utilized by the Missouri State Police, but local jurisdictions are not mandated to use that list
* Misdemeanor penalties for 1st offense, felony on 2nd

Ohio – House Bill 341, Signed into Law – January 2017

* Allows a civil action by insurers against a towing company operator to recover a vehicle. The vehicle is released within 2 days of the insurance company paying the “undisputed amount” of the bill from the towing company.

Pennsylvania

* NICB is working with a state lawmaker from the Pittsburgh area on legislation in 2017 to address towing abuses in Pennsylvania. The problem is most prominent in Philadelphia and Pittsburgh.

Anyone with information concerning tow scams can report it anonymously by calling toll-free 1-800-TEL-NICB (1-800-835-6422), texting keyword “fraud” to TIP411 (847411) or by visiting our web site at www.nicb.org.

When Hail Hits Storm Chasers Arrive

The recent hail storm that damaged thousands of homes and vehicles in the Colorado Springs area has once again attracted an onslaught of “storm chasers” – unscrupulous contractors going door-to-door to try to get victims to let them repair their roofs or other hail damage.

The National Insurance Crime Bureau (NICB) says Colorado was second only to Texas in the number of hail damage insurance claims from 2013 to 2015 (Hail Claims).

NICB warns that the thousands of homeowner damage claims and millions of dollars that are being paid out by their insurance companies have resulted in a dramatic increase in the number of contractors claiming to be “licensed” and going door-to-door, without being invited, to solicit business. All too frequently, victims will allow them to go up on their roofs to inspect for damage, without knowing if the company has a valid license or has proper business insurance. Homeowners may find themselves liable if someone is injured on the roof without proper workers compensation or business insurance.

In some cases, the contractors will take the victim’s money, make limited repairs or no repairs at all, and disappear – leaving the property owner victimized a second time.

Working with a coalition of insurance industry, consumer, contractor industry and government groups, NICB is urging consumers to know their rights under legislation passed in the state in 2014 to protect them from high pressure tactics. Those include the right to know the following:

  • Scope of work and materials to be provided.
  • Cost for same based on damages known at the time the contract is entered into.
  • Approximate dates of service.
  • Roofing contractor’s contact information.
  • Identification of contractor’s surety and liability coverage insurer and their contact information.
  • Contractor’s policy regarding cancellation of contract and refund of any deposit including a rescission clause allowing the property owner to rescind the contract for roofing services and obtain a full refund of any deposit within 72 hours after entering the contract.
  • A statement that if the property owner plans to pay for the roofing services through an insurance claim, the contractor cannot pay, waive or rebate the homeowner’s insurance deductible in part or in whole.
  • A statement that the contractor shall hold in trust any payment from the property owner until the contractor has delivered roofing materials to the job site or has performed a majority of the roofing work on the property.
NICB reminds victims to do their homework and resist the pressure from unwelcomed contractors. Remember, if you didn’t request it, reject it! For more information on the Colorado campaign on social media search #NoRoofScams.

NICB Urges Illinois Governor to Sign Measure Aimed at Towing Fraud

vintage-tow-wrecker-pick-up-truck_G1Q8XPUO_LThe National Insurance Crime Bureau (NICB) urges Illinois Governor Bruce Rauner to sign into law Senate Bill 2261 to help protect consumers from the rampant towing fraud that has long plagued the state.

The bill, which has passed both the House and Senate, was supported by NICB, the Illinois Insurance Association and others.

If signed by the Governor, it would create a Statewide Relocation Towing Licensure Commission — a task force that will work over the next year to fully examine the towing laws in the state and report back to the legislature. The commission would have representation from the auto insurance industry in addition to state lawmakers, the towing industry and law enforcement.

In addition SB 2261:

  • Makes it a class 4 felony for a tower to illegally solicit business at an accident scene; and
  • Allows a vehicle owner or the owner’s insurer to file suit against a tower that violates the accident scene solicitation section, including recovery of all attorney fees and court costs.

“This is a major step forward as we attempt to put limitations on the rogue tow operators that have plagued many areas of the state, especially the Chicago area,” said NICB President and CEO Joe Wehrle. “Motorists should not be subject to predatory towing practices that result in outrageous charges and tactics, such as holding cars hostage in salvage yards until the owner or their insurance company pay what amounts to a ransom to get the vehicle returned.”

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800-TEL-NICB (800-835-6422), texting keyword “fraud” to TIP411 (847411) or submitting a form on our website. Or, download the NICB Fraud Tips app on your iPhone or Android device.

Multiple Arrests in Houston Tow Truck Scam

Houston police have arrested four people accused of a long-running scam that cheated motorists whose cars were towed under the Safe Clear program out of exorbitant tow lot storage fees and vehicle repair charges.

USAAutoThe allegations of organized criminal activity were lodged against individuals associated with USA Auto Collision, a Houston towing company that holds a city Safe Clear contract.

According to police, USA Auto Collision tricked motorists into signing documents – sometimes at the tow scene – authorizing its body shop to perform repairs, and then billed insurance companies for overpriced and sometimes unnecessary work.

Fraud Files: Severe Storms Slam the South

Enduring a hailstorm is challenging enough, but property owners must also understand that in the wake of a severe storm, they may be visited by unethical contractors posing as sincere repairmen. Often, these characters will descend on disaster areas and go door to door offering their repair services. Although most are honest, some are not. If the dishonest ones get your money in advance of performing any work, you’ll never see them or your money again.

NICB urges storm victims to work with their insurance company and to be careful in selecting a contractor to do repairs. Do not allow someone to force you into signing a contract or paying up front for work or supplies.

More consumer protection information is available here.

Hail Storm Slams Northern Texas

A storm rolled into Northern Texas Monday night and produced a destructive hail storm. The most significant damage occurred in Wylie, Texas near Dallas. As you can see below many homes, as well as vehicles, were damaged in this incident.

WylieHail1

Becoming a victim of a hail storm may be impossible to avoid. But you can avoid being victimized by dishonest contractors who often go door to door in damaged neighborhoods offering repair services. While many contractors are honest and reputable, others are not. Educate yourself against unscrupulous vendors. When contractors offer you their services, consult this checklist before becoming a customer.

  • Work with only licensed and insured contractors.
  • Get more than one estimate. Don’t be pushed into signing a contract right away.
  • Get everything in writing. Cost, work to be completed, time schedule, guarantees, payment schedule and other expectations should be detailed.
  • Require references, and check them out.
  • Ask to see the person’s driver’s license, and write it down. Also, get the vehicle’s license plate number.
  • Never sign a contract with blanks. Fraudulent contractors may enter unacceptable terms later.
  • Never pay a contractor in full or sign a completion certificate until the work is completed.
  • Make sure you review and understand all documents sent to your insurance carrier
    WylieHail2

How to Avoid Post-Disaster Scams

As Texas and parts of the South-Central U.S. recover from widespread flooding and hail damage, the National Insurance Crime Bureau (NICB) reminds consumers to beware of buying flood-damaged vehicles and falling victim to unscrupulous home repair contractors.

The worst losses occurred in Texas where hail caused an estimated $600 million worth of insurance claims for damage to homes and autos.

Car Sales Fraud

As with all major natural disasters, NICB assists law enforcement agencies, insurance and car rental companies with identifying and cataloging water-damaged vehicles to keep them from being resold to unsuspecting consumers.

Already, authorities estimate that thousands of vehicles may have been flooded.

“NICB agents see it time after time. Natural disasters bring out dishonest salvage dealers who don’t tell you that the vehicles they’re selling are heavily water-damaged,” said NICB President and CEO Joe Wehrle.

“Consumers need to know that these vehicles may appear advertised for sale without any indication that they were affected by the flooding. As always, buyers should be careful when considering a used vehicle purchase in the weeks and months following a disaster like this.”

To help avoid buying a vehicle that has been declared salvage (including flood-damaged vehicles), NICB recommends that buyers take advantage of its free online service called VINCheckSM. VINCheck contains vehicle data from insurance companies representing about 88 percent of the personal auto insurance market and lets buyers see whether a vehicle has ever been declared as “salvage” or a total loss. It also alerts users if a vehicle has been stolen and is still unrecovered.

Home Repair Fraud

In the weeks ahead, homeowners in disaster areas should be alert to the potential for fraud by unscrupulous contractors and home repair businesses.

Roofer“Fraud is an unfortunate reality in post-disaster environments,” said Wehrle. “As any recovery gets underway, fraudsters often converge on affected areas to scam disaster victims out of their money while promising to do repairs. The last thing victims of disaster need is to be victimized again.”

After a disaster, contractors often go door-to-door in affected neighborhoods offering clean up and/or construction and repair services. Most are reputable, but many are not. One common scheme is to pocket a down-payment and then never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work that is not up to code in order to increase profit.

“If you didn’t request it, reject it”

Almost all of these scams are unsolicited—they begin with a visit from a contractor who seeks to help victims rebuild. That is why NICB recommends that “if you didn’t request it, reject it.” Before hiring any contractor, call your insurance company. Your insurance company will honor its policy so there is no need to rush into an agreement with a contractor who solicits your repair work—especially when you did not request it.

Unlike other states, Texas does not require a license for a roofing contractor nor is one required for solicitation. Local jurisdictions, however, may impose certain requirements before contractors can solicit work within their boundaries. One example is the City of Garland that requires anyone soliciting for the purpose of selling or offering to sell goods or services, must first retain a solicitation permit through the Garland Police Department.

NICB suggests you consider these tips before hiring a contractor:

  • Get more than one estimate
  • Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules and other expectations should be detailed
  • Demand references and check them out
  • Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number
  • Never sign a contract with blanks; unacceptable terms can be added later
  • Never pay a contractor in full or sign a completion certificate until the work is finished and ensure reconstruction is up to current code
  • Make sure you review and understand all documents sent to your insurance carrier
  • Never let a contractor pressure you into hiring them
  • Never let a contractor interpret the insurance policy language
  • Never let a contractor discourage you from contacting your insurance company

Consumer Resources

  • For a free brochure with tips to avoid post-disaster fraud, click here.
  • For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.
  • For free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today, access NICB’s VINCheck.