IBAO warns brokers of increase in cheque fraud activity

Insurance Brokers Association of Ontario (IBAO) is warning brokerages to be on high alert in light of several recent reports of cheque fraud.
The incidents reported seem to have a common thread, an IBAO release says. They occur when the brokerage is shipping a payment to an external payee using window envelopes.
Another pattern is that the payee will notify the brokerage the payment did not arrive, and yet the brokerage's banking records show the debit transaction was completed.
IBAO suggests undertaking the following steps to prevent such incidents:
• do not use window envelopes to ship cheque payments;
• ensure cheques have serial numbers on the electronic codeline (commonly referred to as MICR);
• reconcile accounts on a daily basis and consider using electronic services available from your financial institution to assist;
• consider using electronic fund transfers instead of cheques;
• implement physical security by properly securing and restricting access to any computers used to issue cheques, especially ones with electronic signatures; and
• cheques, cheque order forms and articles of incorporation should be treated as carefully as cash and kept locked up with restricted access.

MPI investigations saved more than $9 million in 2009

Manitoba Public Insurance (MPI)'s special investigations unit saved approximately $9.3 million in 2009.
The division investigated roughly 2,750 suspicious claims, including bodily injury, hit and run, auto theft, vandalism, suspected staged accidents or other forms of auto insurance fraud.
Of the more than $9 million saved, approximately $2 million was the result of successful fire investigations.
Investigators were able to determine that many of the 250 investigated vehicle fires were a result of either arson or faulty mechanical repairs.
"Our fire investigators can determine if a fire was the result of arson," Tim Arnason, MPI's director of SIU, said in a release. "Where evidence proves owner involvement, the claim would be denied based on the conclusive findings.
"In other cases where causation of fires is attributed to faulty mechanical repairs, the corporation will seek recovery from the person or business responsible."

Ontario broker's license revoked for serving clients unknown to her brokerage

Ontario's broker regulator has revoked the broker's license of Careen Edwards for a history of serving clients of whom her brokerage was unaware.
Registered Brokers of Ontario (RIBO) began investigating Edwards after a client walked into the office where she worked to report an accident. The brokerage had no record of the person being a client.
The client told RIBO she paid Edwards $4,000 in cash for auto insurance, but did not receive a receipt for the payment. The insurer had no record of the client.
Edwards was placed on paid leave in July 2009 while the brokerage conducted an internal audit.
"On July 15, 2009 Ms. Edwards' employment with the brokerage was terminated after they were able to access Ms. Edwards's computer terminal and discovered that there [were] binder letters sent out to leasing companies binding coverage on several vehicles and there were also certificates of insurance that had been produced for the several individuals where there were no corresponding applications," RIBO notes in the ‘Discipline Digest' section of its Summer 2010 newsletter. "Checking with the various insurance companies only confirmed that the individuals did not have valid insurance nor were they clients of the brokerage."