COVID Delivers Fraud to the Trucking Industry

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The trucking industry and its insurers were already vulnerable to predatory schemes in a pre-COVID-19 society. The current economic uncertainty and anxiety caused by the virus is unfortunately exacerbating that problem.

Last month, the Justice Department issued new indictments against several individuals in Louisiana, alleging a conspiracy to defraud the trucking industry. The defendants allegedly staged accidents in order to recover money from the trucking company’s carrier. That one case has now led to the indictment of a staggering number of 28 individuals who defrauded insurance companies out of hundreds of thousands of dollars.

While these types of schemes are not new, the economic current climate will assuredly lead to more fraud within the industry, just as the 2008-2009 economic downturn did. Indeed, the Justice Department has also issued similar indictments recently in Washington State. There, the perpetrators are alleged to have committed the following acts:

  • Rode with a passenger, who played the injured driver in order to hide the frequency with which these cases occurred;
  • Targeted trucks at night as they were changing lanes in order to limit witnesses and avoid questionable fender bender accidents; and
  • Hired doctors to provide questionable or unnecessary medical treatment, and draft reports in order to increase the individual’s medical bills.

This type of fraud is not limited to commercial carriers but is prevalent with individual automobile insurance. The National Insurance Crime Bureau has even released public service announcements on this issue. The NICB also released data showing that as many as 2,400 insured tailgate thefts occurred in California and Texas between 2016 and 2017. However, because commercial carriers tend to have higher policy limits they are uniquely at risk as targets of these types of schemes.

Despite the risk of being a target, the trucking industry can implement several steps to protect itself from fraudulent schemes.[1] First, trucking companies and carriers need to complete a thorough investigation after each incident – a detailed recording of all the facts, ensuring that photographs, witness statements and follow-up investigation of all the individuals involved are completed.

The investigation should include obtaining phone records, which can show whether a person was on the phone at the time of the accident; they can also reveal conversations with other potentially suspicious numbers.

Second, investigating a person’s social media account may also show whether the individual is talking about the accident and reveal the nature and extent of injuries, or the lack thereof. Social media may also show who the individual is talking to and whether those persons have a propensity to get into similar accidents.

Third and finally, adding dashboard cameras may assist carriers in accurately determining how an accident occurred. This will prevent allegations of hit and run accidents or demonstrate the true nature of any collision that does occur.

Ultimately, the more information acquired following an accident will aid a carrier’s analysis regarding whether an accident was staged and, therefore, fraudulent. Carriers can then make an informed decision as to whether to litigate a claim or make a business decision pre-suit.

[1] For an in-depth discussion on this issue, please refer to American Trucker’s January 3, 2020 article in response to several of the initial indictments.

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