Those who specialize in auto insurance fraud are deceptively thorough in crafting bogus documents to fool authorities.
The result of their high-tech phony handiwork is that honest Michigan drivers are paying hundreds of millions of dollars in higher insurance costs.
To crack down on the mounting fraud, Michigan Secretary of State Ruth Johnson has established the Fighting Auto Insurance Rip-offs initiative, which includes the Michigan State Police, prosecutors, state officials and insurance industry leaders.
She said there will be special training for the staff and the department will aggressively suspend the registration of vehicles whose owners don't have insurance.
And state Rep. Aric Nesbitt, R-Lawton, has introduced a bill that would allow law enforcement to use the latest technology to crack down on drivers who have fraudulent registration documents. It could also help honest vehicle owners prove they have the required insurance.
The problem is significant and the scammers often use high-tech tools. During a one-day statewide spot check, 16 percent of the insurance documents presented were fraudulent. In one instance, an insurance policy used by nearly 30 customers included an official-looking QR computer code. But when scanned, the QR code linked to an online site that says only, "Llamas are sooo cool." Scammers have even gone online and are selling fake insurance documents on Craigslist.
"Some of the bad guys are surprisingly clever; it seems like every time we put up a roadblock to auto insurance fraud, they come up with a way to circumvent new security measures," said Johnson.
One high-tech tool for the state is the Electronic Insurance Verification system. Twice a month insurance companies electronically provide a list of all of their customers and the vehicle identification numbers of their vehicles.
Law enforcement officers can use the Law Enforcement Information Network to access the verification system and determine if a driver is properly insured.
The bill would enhance this effort by allowing drivers to use their smartphones to prove they have insurance. A special app would be used to scan their insurance certificates into the phone.
Drivers who don't appear on the insurance verification listing but have insurance can prove it through the use of their phones.
The app serves as a supplement to their paperwork. It would become particularly helpful when drivers don't have the certificate of insurance in their vehicles.
Reports indicate one out of every five drivers on the road doesn't have insurance, so this is a significant problem.
As Nesbitt says, "The more people with insurance, the less all of us will have to pay for it. As we modernize state government and make it more customer friendly, this is another step we can take. We're still in the 1960s paper world, and it's time to bring us into the 21st century."
The bill is in the House Insurance Committee, which is chaired by Nesbitt. He said he hopes to have a hearing on it within a month.
It's common sense for the state to use available technology to hold insurance offenders accountable and give honest drivers more options.