INVESTIGATION: Counterfeit Crashes

By Michael Maely - bio | email

MYRTLE BEACH, SC (WMBF) - Staged auto accidents are a growing problem in the Palmetto State, according to recent data, and they cost billions of dollars across the country in increased insurance premiums.

Did you ever think a recent accident was unavoidable? It may have been. South Carolina ranked No. 19 of all states in the U.S. in 2008 for questionable claims, according to the National Insurance Crime Bureau. And the struggling economy may be making the problem worse.

There were 1,157 questionable claims in South Carolina in 2008, up almost 26 percent from the number of questionable claims in 2007.

"People are getting desperate, they think it's easy money to lie about a crash or stretch the truth, but our investigators will catch them," said Allstate Insurance agent Maurice Stephens. "People are looking for an opportunity to make some money, faking injuries, claiming some damage on the car in hopes of getting compensation for it and using it to pay other things possibly."

Dana Sanders' insurance agent says Sanders was the victim of a caused or staged crash.

"I know something wasn't right," Sanders recalled about the accident. "He stopped suddenly, I had no where to go, and when I got out, I saw his bumper was already being held up by a rope."

Sanders' agent denied the claims for the man who stopped in front of her, and they say it helped that she paid attention.

"I told police it didn't add up, and that his car was already damaged," Sanders said. "And the fact that he didn't seem hurt, but then wanted an MRI later, that seemed strange."

Investigators say insurance fraud costs $120 billion a year.

"Criminals often exaggerate damage or injuries, sometimes stage accidents to get money," said Farm Bureau special investigator Margaret Fleming.

So how to you spot a scam?

"If people notice anything suspicious - tow truck driver shows up right away, the other driver doesn't want to deal with police - they need to let us know," said Darlington County Sheriff Wayne Byrd.

The Darlington County Sheriff's Office used unmarked cars to demonstrate some of the staged crashes criminals try to set up. The first typically occurs at a T-intersection or a four-way stop. The suspect waves the other driver through the intersection, once that person goes, the suspect hits your car, blaming what was possibly previous damage on you.

"Always yield the right of way," Stephens said.

Another type of staged crash is known as a "swoop and squat." The driver of the vehicle behind you swoops in front, then squats, slamming on their brakes.

"Try to give plenty of space and keep a close eye on who's passing you and what they're up to," Byrd encouraged.

The South Carolina Attorney General's office isn't taking the problem lightly. Working with investigators like Fleming, they've recovered 300 percent more cash in 2009 than in 2008, and they've convicted more than 200 people for insurance fraud in the same time span, including Richard Pinckney, who has been linked to the largest staged auto accident ring in state history, with at least 21 people involved.

Pinckney, 52, of Walterboro, pleaded guilty in Colleton County in September 2009 to seven counts of presenting false claims. He's serving a 10-year prison sentence for a problem that's costing the country $120 billion annually.

While you may never be the victim of a staged accident, knowing what to look for and how to report possible fraud can surely stop a scam in the making.

To report insurance fraud call the South Carolina Insurance Fraud Hotline at 1-888-95-FRAUD.

For more information on Insurance Fraud visit:

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