Not many people are aware that insurance scams have become a multi-billion dollar business for criminals. These schemes prey on the fears and vulnerabilities of the public to cheat them out of money.
Insurance scams can take on various forms such as bogus agents, robocalls, and overcharging. Accordingly, customers need to be extremely cautious about the insurance provider they select. Falling into the trap of a rogue company could result in significant damage. Avoiding such scams is even more important during the ongoing COVID-19 crisis as tricksters grow more active than usual.
So how do you figure out if you are being scammed? There are certain things that you need to keep in mind before signing an insurance contract. This article discusses the different types of insurance fraud and provides you with tips that will help you in avoiding such traps. In addition, the article also provides a number of solutions if you have already fallen for one of these schemes.
TYPES OF INSURANCE SCAMS
Scams can take many forms, and the most common insurance scams that you need to defend against include the following:
- Bogus agents can prove to be extremely hard to detect. Agents can look and sound authentic and pretend to be associated with major insurance brands. However, they are not what they appear, and making a payment to them may result in irrecoverable financial losses.
- Another form of fraudulent activity is robocalls. These are scammers who pretend to be from authorities such as the Social Security Administration (SSA). They may offer you fake insurance policies or arrange for fake COVID-19 tests.
- Phishing is another type of trap that is common in the insurance industry. This refers to unsolicited emails that ask you for your personal information in the name of an insurance provider. Once you provide the information, your account could be hacked, and funds could be siphoned off.
- Another fraud that has been rampant during the current pandemic is related to travel insurance. These fraudsters claim to payout present insurance claims that cover COVID-19 related problems in particular. These scammers need to be avoided at all costs.
- COVID-19 has also become a way to scare people into handing over their personal information. These cheaters often claim that they have access to testing kits or masks. They also claim to provide such equipment to you as part of an insurance contract. However, once you provide sensitive information, they never turn up.
HOW TO IDENTIFY INSURANCE FRAUD
Considering the various forms in which insurance extortion can be executed, you must be able to identify potential scammers before they cause any serious damage. Here are a few pointers to help you out in this regard:
- Check the authenticity of the agent that has approached you. You could contact your local government authorities to verify their credentials.
- Go through the terms and conditions of the insurance contract before you sign it. Many people make the mistake of signing contracts in a hurry and then regretting decisions later.
- Never provide sensitive personal information to anyone over the phone or email. If you fall for one of these fraudsters, then it may be very difficult for you to recover your funds.
- Remember that if you are getting a deal that is too good to be true, then it is most likely a scam. You need to be vigilant and conduct your research before signing up for a new insurance policy.
WHAT TO DO IF YOU HAVE BEEN SCAMMED
If you have already been tricked by a fraudulent insurance agent or company, you still have a couple of ways to manage the situation. Here’s how:
- File a complaint with the Federal Trade Commission (FTC). You can log on to their website and create a new complaint. You’ll need to provide specific details about the insurance company or agent. The FTC will look into the matter and hopefully resolve it for you.
- Report the case to the National Insurance Crime Bureau (NICB). This bureau deals with all instances of insurance fraud and also runs a national helpline. You can simply call 1-800-TEL-NICB and provide all the information regarding the scam.
- Approach the insurance company that the agent is claiming to be from. The company may be able to help you out by clarifying the status of your contract, if indeed you have one.
Insurance deception takes many forms, but fortunately you can take steps to defend against these con artists with the tips detailed in this article. Insurance scams have become fairly common across the US and you need to be extremely careful before signing any documents.
Furthermore, even if you have already been a victim of such schemes, you can still turn the situation around by taking timely action and reporting the incident to the relevant authorities.