The state of Michigan is launching a campaign to crackdown on auto insurance fraud.
Secretary of State Ruth Johnson says her office will be working with the Michigan State Police, local prosecutors and the insurance industry to catch people selling and using phony auto insurance policies.
She says a one day snap shot of more than 3 thousand auto registration renewals using paper insurance certificates found 16% were using phony auto insurance.
Johnson says many of the scams are quite sophisticated.
“Many of the fake insurance certificates look legitimate. And it’s very hard for our staff to identify from appearance alone that they are fakes,” says Johnson, “One scammer even had the audacity to actually set up a help desk where someone would answer the phone and verify phony insurance when our branch staff called.”
An insurance industry spokesman says auto insurance fraud and uninsured drivers are passing along about $200 million in higher insurance premiums to other Michigan motorists. The use or sale of phony auto insurance certificates can be prosecuted as a felony.
More than 4,000 vehicle registrations this year because the certificates weren't legitimate, compared with 431 in all of 2011.