Does your recovery plan include scams?

A number of insurance scams have prompted one provincial regulator to provide some guidance on how innocent brokerages can protect their good names….

Brokers should consider including in their disaster recovery plans some guidance about what to do if their brokerage brand name is targeted in a scam, Ontario’s broker regulator says.
The idea comes as Ontario’s insurance regulator posted a new scam alert involving an unlicensed brokerage, CC&B Group Inc., and an unlicensed broker, Serafattin Solak.
“It has come to the Financial Service Commission of Ontario [FSCO]’s attention that Mr. Solak (who also goes by the name, ‘George’) is soliciting insurance business through ads on Craigslist and is misrepresenting himself as an insurance broker,” FSCO said. “Consumers who responded to these Craigslist ads were directed to pay their premium in cash and provide additional payment by personal cheque to Mr. Solak. 
“Consumers then received fake pink slips that listed CC&B Group Inc. and Jevco Insurance Company as their insurers.”
The CG & B Group Inc., a legitimate brokerage registered by the Registered Insurance Brokers of Ontario (RIBO), has confirmed that it is not affiliated or associated with Solak or his insurance scam. Jevco Insurance, a legitimate insurance company, also had no involvement in the scheme.
Fraudsters will commonly use the name of a legitimate insurance brokerage, or a variant of it, to add authenticity to their schemes. And while it may be clear to all that the insurance brokerage is an innocent party targeted by fraudsters, there is still some risk to the brokerage’s brand reputation if the brokerage is associated in the public’s mind with a scam. (continued.)


“We have in the past suggested that this type of scam ought to be considered for inclusion in a brokerage’s business continuity and disaster plan,” said RIBO CEO Jeff Bear. “We do not, however, have a separate section on what to do in the event a firm becomes a scam target in our Principal Broker Handbook.”
Bear added that a number of suggestions about what to do are located in various places in the Handbook. But there isn’t a “list” of things to consider in one location.
“We are going to look at putting something together for inclusion in the Principal Broker’s Handbook, but ...we do not have anything specifically directed at this issue at the moment,” he said.
The Insurance Brokers Association of Ontario (IBAO) confirmed it currently does not have any materials that would include steps for a brokerage to take if it became the target of a scam.

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