Fri, Jun 12, 2009 - Page 7 News List

As debt grows, US car owners turn to fraud to recoup cost

AP , LOS ANGELES

Driven to desperation, a growing number of financially strapped car owners in the US are torching, sinking or ditching their vehicles and then reporting them stolen to cash in on the insurance.

Sport utility vehicles (SUV) have been found ablaze in the Nevada desert, cars have been dumped in a Miami canal and a BMW was discovered buried in a field in Texas. Some vehicles have been parked in the path of a hurricane.

Known as owner give-ups, the scams have increased even as auto thefts dropped nationally — a sign that the deepening recession is pushing the trend.

Authorities say most of the false claims are filed by first-time offenders looking for a quick financial fix with little regard for the consequences.

“We see people doing this kind of crime who ordinarily wouldn’t steal candy from a store,” said Tom Reilly, a sheriff’s investigator in Dallas County, Texas.

James Quiggle, a spokesman for the Coalition Against Insurance Fraud, blames the problem on people who think “insurance companies are rich and fat and won’t miss a few dollars.”

Experts say the billions of dollars in insurance losses are actually recouped from honest consumers as premium increases.

When gas prices shot up to US$4 a gallon last summer, investigators reported a number of suspicious auto theft claims involving SUVs and other gas guzzlers.

But as gas prices dipped and the economy sputtered, the trend extended to all kinds of models, with losses concentrated in regions hit hard by layoffs, foreclosures and other signs of economic distress.

Two years ago, Las Vegas detectives were looking into two or three cases of suspicious auto theft a week. But in the past two-and-a-half months, they have investigated 83 such cases and made 11 arrests — more than a three-fold increase, said Lieutenant Bob Duvall, head of the city’s Metropolitan Police Department’s auto theft unit.

Police helicopters now patrol the desert around Las Vegas in search of smoldering vehicles or others pushed off cliffs.

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