A warped business model that broadly hurts the general public

On Behalf of | Apr 23, 2019 | automobile accident insurance defense

Business entrepreneurs are a notable group for the sheer diversity of ideas they come up with to forge profitable business enterprises. Some open stores. Others provide professional services.

And some stage fake car accidents.

Readers who understandably find that last-cited business model to be truly aberrational and even stupefying might be interested to note that it is actually more common than might reasonably seem to be the case. In fact, faking auto crashes to defraud insurance companies is a tried-and-tested (though always failing and thoroughly repugnant) money-making plan.

Even in Louisiana, as evidenced by a story we covered in a recent blog post at the Lafayette insurance defense law firm of Caffery, Oubre, Campbell & Garrison. We underscored for readers in our February 10 entry the details surrounding a criminal group’s staging of a motor vehicle accident in Acadia Parish. Multiple individuals were arrested and criminally charged in connection with that ruse.

A similar fact pattern now emerges from another state, where a ringleader and fellow conspirators faked several car accidents and subsequently filed costly injury claims with insurance companies. That scheme eventually unraveled, but only after considerable time, effort and costs were incurred by investigators to unravel it.

A central point to note concerning such ruses is that they are hardly victimless crimes. The South Carolina attorney general noted concerning the above case that “this kind of fraud causes insurance rates to go up for all of us.” We echoed that assessment in our above-cited blog entry, stressing that “fraud has financial consequences for everyone, from the insurance company to the individual policyholder.”

In fact, insurance fraud reportedly costs Americans about $80 billion each year.

That is food for thought, isn’t it?