The Fraud Examiner


8 Scams to Watch Out For in 2016
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8 Scams to Watch Out For in 2016

By Brian Tenzer, Esq. & Zasha Rodriguez, Esq., Goldstein Law Group

November 2015


Unfortunately, fraud is a year-round threat. Although we need to remain vigilant at all times, International Fraud Awareness Week (November 15-21) serves as a good reminder of just how damaging these crimes can be.

At Goldstein Law Group, we focus on staged auto accident and property insurance fraud. While these crimes continue to grow in sophistication and scope, affecting more and more victims, they’re not the only fraudulent schemes around. For 2016, we’ve identified eight frauds that people are likely to encounter.


  1. Disaster mitigation can be a lucrative business. Once there were just a few fire & water mitigation companies, but now there are scores. Lack of oversight makes it easy for unscrupulous companies to take advantage of disasters. Some inflate estimates by up to 500 percent, use unnecessary equipment or claim damage is more widespread than it is. Many also convince insureds they can get quicker action if benefits are assigned to them, enabling them to bill carriers directly. When inflated claims are paid, consumers ultimately pay the price through increased premiums.
  2. Straw ownership continues as a top fraud. Because medical clinics must be licensed to physicians, straw ownership essentially involves a doctor falsely acting as a clinic’s owner so the true owner can avoid state licensing and monitoring. Many times, these “straw” clinics are a front for money laundering or other criminal activities. Since the intent of these clinics is to make money rather than legitimately treat patients, insurance companies often are over-billed for services never rendered. Even worse, real patients may not receive the medical care they need.
  3. Credit repair fraudsters typically seek out individuals with lots of debt. You’ve likely seen pop-up ads online promising to fix your credit or erase your debt. The Federal Trade Commission (FTC) warns that many of them charge a fee but basically don’t do anything for you. In fact, some may sell your social security number, leading to big problems. Legitimate credit repair services are available that cost little or nothing.
  4. Policy procurement fraud has become more prevalent as consumers purchase policies online. This fraud can involve recruiting insureds to apply for policies, then falsifying the paperwork to secure policies that carriers would not have written or, if they had, would have charged a higher premium. An integral part of a larger scheme, policy procurement often leads to staged accidents in which the insureds file claims under the fraudulently obtained policies. Insurers, and ultimately consumers, are affected when carriers wind up paying for claims generated by these fraudulent policies.
  5. Bank draft scams have increased as people turn to sites like eBay and Craigslist to purchase and sell valuables online. Even when sellers require bank drafts or cashier’s checks as payment, they’re not always protected since counterfeit documents can be easy to obtain nowadays. Sellers should insist on going to the bank with the buyer and witness the check being prepared. Alarms should sound if the draft or check is for more than the sale price and you’re asked for the overage in cash.
  6. Mobile x-rays may not sound like an arena for fraud, but they can be. Because they utilize radiation that can affect patients or technicians if not performed correctly, states may limit their use. Some companies may look for any opportunity to use mobile x-rays so they can charge extra for set-up and transportation fees, even in cases when a stationary x-ray is in the next room. Others may make deals with providers to schedule in-office x-rays so they can claim the added fees in addition to the standard x-ray charge.
  7. Internet money laundering has become a huge problem, costing some people thousands of dollars and even landing unsuspecting victims behind bars. The latest target audience: job seekers. Authorities find fraudulent activity is being conducted via popular job site listings. Some launderers even send direct emails to individuals and offer them a job they may not have applied for. Unfortunately, too many people are falling for these scams, especially those who are unemployed and desperately seeking a source of income. Job seekers should be cautious when an application requires processing payments or transferring funds, because doing so for an illegitimate source could lead to serious jail time. Never give social security or bank account numbers out over the phone or online, and remember: real employers will want to interview you before offering a job.
  8. Identity theft is one of the fastest-growing financial frauds – in fact, it was the No. 1 complaint reported to the FTC in 2014. It is especially concerning because victims not only suffer monetary damages, but their reputation and credit may also be impacted. Crooks are hacking into various databases to steal personal information and assume a victim’s identity. Forged government documents top the list of the most common identification frauds, followed by credit card, phone/utilities and bank fraud. If you think you’re a victim, ask that a fraud alert be added to your credit report, then file an ID theft report with the FTC (1-877-438-4338 or ftc.gov/complaint).

According to 2014 ACFE Report to the Nations on Occupational Fraud and Abuse, most crimes are detected through tips, making consumer input a crucial link for helping put an end to fraudulent operations.

What can you do to avoid becoming a victim of fraud? Be wary of buying insurance from door-to-door or telephone sales representatives. Be suspicious if premium payments appear too good to be true and stay up to date on popular scams.



Brian Tenzer, Esq., is a Partner at Goldstein Law Group (GLG), which focuses on defending insurers against insurance fraud. He was named one of Florida’s Legal Elite by Florida Trend magazine in 2011. A former Assistant Public Defender, Zasha Rodriguez, Esq., is a Senior Associate at GLG, concentrating on civil defense and prosecution of insurance fraud claims.

Contact the ACFE
For more information, contact Sarah Hofmann, Public Information Officer, at (512) 478-9000 ext. 324 or SHofmann@ACFE.com.