Scanning For Schemers

INSURERS ARE CRACKING DOWN on a pernicious form of fraud --staged car accidents. In this scam, con artists hire folks to cause a collision. The crooks turn a fender-bender into big bucks by inflating medical and legal bills. The schemes cost insurers millions and can cause injury to innocent motorists.

Finally, insurers are making a dent in the problem. In the past six months, 400 individuals in 12 states have been charged with filing fraudulent accident claims worth at least $25 million, says the National Insurance Crime Bureau (NICB), a nonprofit funded by insurers. How did they do it? By creating a database of 300 million records from law enforcers and insurers, NICB snoops search to see if the same address, driver's license, doctor, or lawyer appear on suspicious claims. "Common denominators begin to show up," says Glenn Wheeler of State Farm Insurance. "Then, you can start putting the pieces together." Since insurers don't share information directly, they avoid privacy and antitrust issues.

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