Commissioner Allen Kerr has issued a warning to consumers in the state due to fraudulent policy sales.
The Arkansas Insurance Department recently issued a warning to drivers to take care when purchasing an auto insurance policy. There has been a broad rash of fraudulent car insurance policy sales in the state.
The fake car insurance is being sold by people posing as agents and are primarily selling at dealerships.
According to the Arkansas Insurance Department warning, the fraudulent auto insurance policies are being sold mainly at car dealerships. People pretending they are insurance agents are selling the fake policies to unsuspecting victims. The insurance commissioner’s media release said that the department’s Criminal Investigation Division is looking into the issue.
The department “has received complaints from Progressive Insurance about people posing as Progressive agents and ‘selling’ auto policies to consumers looking to purchase a vehicle from a dealership. Arkansans should be wary of insurance ‘agents’ selling cut-rate plans at a car dealership in order to show proof of insurance,” said Kerr.
The Arkansas Insurance Department is also receiving calls from consumers referred there by insurers.
Progressive Insurance sent an initial 240 cases of alleged fake car insurance policies to the department to be investigated. According to that auto insurance company, people were heading to car dealerships and pretending to be Progressive agents. From there, they were offering to help the dealership customers to buy their auto insurance online.
The car buyers were led to believe that they had purchased auto insurance by paying cash to the individuals pretending to be Progressive agents. The fraudulent agents would then use a checking account to purchase a Progressive policy so the auto buyer would be able to see the purchase of the policy and have a policy number. After leaving the car buyer, the fraudulent agent would claim the transaction on the checking account to be fraudulent. The amount would be refunded and the auto insurance policy would be cancelled.
As a result, said the Arkansas Insurance Department, the fake agent ended up with the cash and a refund to the checking account. The driver, on the other hand, was short the cash and the auto insurance policy they thought they purchased was invalid. Anyone who believes themselves to be a victim of this scam is encouraged to call the Criminal Investigations Division at 866-660-0888.