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matttyl

Interesting fraud situaiton - be aware

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So, as some of you know I'm an insurance agent - and this week I believe I've come across an interesting situation of fraud, and according to one of my carriers - one that's been popping up more and more lately.

I got a call from a long time health insurance client of mine.  She said she tried to make a payment for her policy recently, but was told by the carrier that the policy was canceled back to the end of June.  She had no idea how that could be, considering she had since already paid for July (she was trying to pay August when all this started).  Carrier said they had a recording of her requesting the cancellation.  Apparently, here's what happened:

At some point, someone got a hold of her name, ID number, and probably date of birth (keep in mind, any pharmacy you visit would have all this and more, as would any health care provider you ever see - or anyone that gets a look in your wallet for all of 10 seconds).  They called the carrier, as my client, and requested a change of address - likely just mailing address, didn't even need to be physical address.  Some time later (likely first week of July), they called back with the above information and requested "cancellation at the current paid to date" (end of June), which was processed.  My client is on an auto pay for their policy - which happens around the 6th or so of the month, but is in the works with the bank for at least 3-4 days prior ready for the pending transfer.  Just over $1,400 was electronically transferred from client bank account to carrier, who received funds.  Carrier had no policy to apply funds to, as it was already canceled - and issued a refund check.....to the newly changed address.  Now, I'm not quite sure how that would have cleared, would the person just forge a signature and cash the check in full?  Wouldn't they also need ID?

I'd think this sort of thing could happen not just in health insurance, but in a lot of stuff. 

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4 minutes ago, matttyl said:

So, as some of you know I'm an insurance agent - and this week I believe I've come across an interesting situation of fraud, and according to one of my carriers - one that's been popping up more and more lately.

I got a call from a long time health insurance client of mine.  She said she tried to make a payment for her policy recently, but was told by the carrier that the policy was canceled back to the end of June.  She had no idea how that could be, considering she had since already paid for July (she was trying to pay August when all this started).  Carrier said they had a recording of her requesting the cancellation.  Apparently, here's what happened:

At some point, someone got a hold of her name, ID number, and probably date of birth (keep in mind, any pharmacy you visit would have all this and more, as would any health care provider you ever see - or anyone that gets a look in your wallet for all of 10 seconds).  They called the carrier, as my client, and requested a change of address - likely just mailing address, didn't even need to be physical address.  Some time later (likely first week of July), they called back with the above information and requested "cancellation at the current paid to date" (end of June), which was processed.  My client is on an auto pay for their policy - which happens around the 6th or so of the month, but is in the works with the bank for at least 3-4 days prior ready for the pending transfer.  Just over $1,400 was electronically transferred from client bank account to carrier, who received funds.  Carrier had no policy to apply funds to, as it was already canceled - and issued a refund check.....to the newly changed address.  Now, I'm not quite sure how that would have cleared, would the person just forge a signature and cash the check in full?  Wouldn't they also need ID?

I'd think this sort of thing could happen not just in health insurance, but in a lot of stuff. 

This is sadly not a new scam.  

Best control for this is the Insurance carrier sending a letter to the 'original' address on file noting the change of address request.  (Could also be done by phone or email, but this is the rare time when snail-mail works best.)

Oh, and it is relatively easy to deposit or cash a check with a forged signature or an account with a similar name.

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20 hours ago, matttyl said:

Now, I'm not quite sure how that would have cleared, would the person just forge a signature and cash the check in full?  Wouldn't they also need ID?

 

A check with a forged endorsement can be returned to the institution that cashed it by the insurance company’s bank for several months after it is cashed (18 months? Something like that.) There should be a request for a copy of both sides of the check to see exactly what happened and to explore a return.

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4 hours ago, El Floppo said:

So now we need insurance for our insurance.

That’s how I describe the business I was first in out of college. It’s called Reinsurance. Actually pretty interesting. 

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4 hours ago, El Floppo said:

So now we need insurance for our insurance.

New show idea:  "Pimp my Insurance"

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Did you ever have one of your insurance salesmen sell a life insurance policy to a married man and then kill the guy so the wife (whom the salesman is sleeping with) can collect the payout? 

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31 minutes ago, Ilov80s said:

Did you ever have one of your insurance salesmen sell a life insurance policy to a married man and then kill the guy so the wife (whom the salesman is sleeping with) can collect the payout? 

Happened to a couple of my neighbors.

Sucks.

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1 hour ago, Johnny Rock said:

That’s how I describe the business I was first in out of college. It’s called Reinsurance. Actually pretty interesting. 

Link

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53 minutes ago, Johnny Rock said:

That’s how I describe the business I was first in out of college. It’s called Reinsurance. Actually pretty interesting. 

My father was in Reinsurance also. I described it to people as the insurance of insurance policies. His big specialty was dealing with Hurricanes. Can't imagine what he'd be doing over the last couple years; I'll have to ask him.

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1 hour ago, NotSmart said:

Happened to a couple of my neighbors.

Sucks.

A couple of neighbors?

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2 hours ago, NotSmart said:

Happened to a couple of my neighbors.

Sucks.

Go on 

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1 hour ago, Mr. Ected said:

In theory, are you more 'safe' against this if you do your insurance thru your employer?

Yes.  Different ballgame there.  Only an owner can cancel a policy outright.  If you have an individual policy, then you’re the owner.  If it’s theouh your employer, then the employer is the owner.

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