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As America’s economy slogs through this once-in-a-generation recession, stressed-out consumers are literally being driven to desperation. Growing numbers of drivers around the U.S. are illegally dumping their vehicles for insurance money as their personal economic stimulus bailout.
Blackened hulks are turning up in remote deserts outside of Las Vegas. Soggy remains are being fished out of rivers in New Jersey and canals in Miami. Selling vehicles to chop shops is another ruse.
In an unusual family affair, Helen Marler allegedly torched her Jeep Liberty to duck the $600 monthly payments. The Yuba County, Calif., woman’s husband also allegedly plunked his Nissan Titan into a river to collect a $29,000 payday.
A woman strangely parked her late-model car just feet from the stormy Gulf Coast waters by Gulfport, Miss., as Hurricane Gustav closed in. She got out and jumped into a waiting SUV, leaving her car to be swept away by the lashing water and winds.
People’s motives for so-called vehicle give-ups are diverse. Pure greed often plays a leading role. Many drivers also can’t afford their vehicles in this recession, especially drivers who bought expensive SUVs and other pricey vehicles on easy credit, well beyond their financial means. Other consumers are grasping for insurance cash as their overall financial misery increases.
Most of these drivers aren’t hardened criminals. They’re average, normally honest people pushed off a financial and moral cliff. They’re anxiously looking for any lifeline they can find.
As the vehicle-fraud trend gains steam, it reveals much about people’s desperation to escape the economic vise as their finances crumble. This crime trend also shows how easily many people will bilk their insurers whenever financial pressure reaches critical mass.
Give-Ups Surge
The trend appears to be surging around the U.S., often in locales where layoffs, foreclosures and other metrics of misery have invaded.
The Coalition Against Insurance Fraud investigated locales around the U.S. early last fall. Clear warning signs were spreading. For example:
— Suspected give-ups referred to the California insurance department had surged 40 percent. Much of the action appeared to take place in pockets of economically distressed Southern California.
— The Arkansas fraud bureau recorded 18 suspected give-ups last summer — compared to one or two in a normal year.
— State Farm reported a surge of suspected vehicle give-ups in Florida and New York.
— Auto arson probes in the Las Vegas area are higher than the national average, a Las Vegas investigator told the coalition. One unlucky arsonist was caught on tape. He didn’t realize a building security camera was recording his scheme one night. The blurry image shows him pouring gasoline into his car and lighting the volatile fuel. It explodes in his face in a ball of fire, giving him second- and third-degree burns.
— As for the Hurricane Gustav antics, police discovered dozens of vehicles abandoned suspiciously close to the surging Gulf Coast waters by Gulfport. Vehicles were found on piers, beaches and other odd places where they could easily swept away.
More reports have come to the coalition since that initial research.
Suspected give-ups have spiked in Dallas County, Texas, says Tom Reilly, a detective with the county Sheriff’s Department. Vehicles often are taken to Mexico, where they can be hard to recover. El Paso is a popular transit point.
Vehicle give-ups increased 35 percent in New York between 2007 and 2008, says the New York Alliance Against Insurance Fraud.
A Bronx man, for instance, claimed someone stole his Cadillac Escalade SUV from a parking space on the street. He filed a theft claim with his insurer. The burning vehicle was found the next day, but with no signs of forced entry. A surveillance tape of the street where the suspect claimed he’d parked his SUV showed no sign of the vehicle.
Paula Parent allegedly dumped her Chevy Trailblazer in Lake Erie so she could escape large payments and get a vehicle with better mileage. The SUV was found in the lake with the keys still in the ignition, and a rock attached to the gas pedal.
Complaints about suspected vehicle give-ups rose nearly 30 percent in Pennsylvania in 2008, reports the Pennsylvania Insurance Fraud Prevention Authority.
In New Jersey, the action is especially hot in Newark. Most counties in New Jersey see about 25 vehicle arsons a year, but Newark City alone sees 300-400, according to news reports. One knucklehead even was caught on videotape, pouring gasoline on his car and igniting it.
There also may be something in the New Jersey school system’s water: Two principals and a guidance counselor were nabbed for allegedly unloading their vehicles for insurance money.
Elementary school principal Amanda Wright-Stafford recently was convicted and will be sentenced in late April. Her Honda Passport was found burning in East Orange. There were no signs of forced entry or that anyone had bypassed the ignition. Nor were the car parts stripped. Wright-Stafford also gave three different versions of when she last saw the vehicle.
Auto Fraud Task Forces at Work
Investigators are clamping down on cons like Wright-Stafford’s, often with aggressive auto fraud task forces that were in place well before the recession increased their caseload.
Some approaches are ninja-like. In the Las Vegas area, one high-energy investigator works so fast that he’s often knocking on the driver’s door even while the vehicle still is smoldering. The goal is to interview surprised suspects before they can work out shady alibis. Investigators also scour the deserts around Las Vegas with a helicopter; the remote areas are known dumping grounds for vehicles.
Fraud investigators also rely on long-established fraud indicators to guide probes.
For example: No damage to the ignition or steering lock; leased vehicle has exceeded its allotted mileage; vehicle was recovered before the time the insured reported it stolen; the vehicle is too expensive for the suspect’s income; and the suspect is behind on lease or loan payments.
Whenever the economy tanks, preventing people from defrauding insurers is a serious challenge for insurers, fraud bureaus and other fraud fighters. Americans are growing more tolerant of insurance fraud, according to a national consumer attitude survey by the Coalition Against Insurance Fraud.
With America’s moral compass wobbling, fraud fighters must change the lenient consumer attitudes that make insurance schemes so widespread. It’s impossible to simply arrest this crime out of existence. In fact, sentences for vehicle give-ups often are light — probation or community service — as over-worked prosecutors try to clear their dockets of what they often consider lower-dollar, lower-priority schemes.
A spike in public-outreach efforts thus must accompany this spike in auto insurance crimes. Get-tough deterrent messages make people think twice about committing what many consumers think is a harmless prank against insurer.
Quiggle is director of communications for the Coalition Against Insurance Fraud. Quiggle’s Crime Warp column is featured exclusively on ClaimsJournal.com. Web site: www.InsuranceFraud.org