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Protect yourself against insurance fraud
Insurance scams are more common than many people realize. Whether it's a fake insurance policy or an offer of no-cost coverage, scammers are always coming up with new tricks to catch unsuspecting Canadians. The good news? Knowing how to spot these scams will help you avoid falling victim to a scammer yourself, saving you time, money, and stress
If you're a TD Insurance customer, it's important to know that we don't use brokers. So, if you ever receive a call, message, or email from someone claiming to be a TD Insurance broker or agent and asking for payment of any kind of service fee, such as a commission or finders' fee, it's a scam.
Hang up on the scammer's call or, if the scam is being sent through email or text message, do not respond. And most importantly, do not provide any personal information or payment details.
If you're ever in doubt about a TD Insurance communication, contact us directly to verify that it's legitimate.
What are insurance scams and why it's important to be aware
An insurance scam is a type of fraud that's designed to steal money or obtain personal information from victims. For example, fraudsters may try to trick you into:For example, fraudsters may try to trick you into:
- Buying a fake insurance policy
- Paying bogus premiums or service fees
- Giving sensitive information like credit card numbers
What's the financial cost of fraud?
In 2022 alone, cyber-related scams cost Canadians over $530 million in losses.1 With frauds and scams on the rise across Canada, understanding how insurance scams work helps you avoid falling victim to a scam—and by reporting suspicious activity and alerting your family and friends, you can help prevents others in your community from being targeted too .
What are the social and psychological impacts of fraud?
Fraud doesn't just hurt your finances—it can have a major impact on your psychological and emotional health and your quality of life too. After being targeted, victims of fraud often struggle with shame, increased stress, and the isolation brought on by these negative emotions,2 creating a ripple effect across their lives.
Common types of insurance scams in Canada
While today's scammers tend to be innovative and always on the lookout for new ways to deceive their victims, there are some common types of insurance scams you should be aware of. These include:
- "False" or fake brokers
- Phishing attempts
- Too-good-to-be-true offer
Knowing how to identify these common types of insurance fraud can help you avoid falling into scammers' traps.
Fake insurance agents (false brokers or ghost brokers) offering fake policies
In this type of fraud, the scammer attempts to sell their victims fake insurance policies by posing as a legitimate insurance broker. In reality, the "broker" is an unlicenced individual who does not represent a legitimate insurance provider.
How do false brokers operate?
Unfortunately, today's criminals often put a lot of effort into their scams—which means they may have a convincing website with glowing testimonials, a professional looking email address or phone number, and letterhead and business cards that appear authentic.
And in keeping with the latest digital trends, many scammers use social media as their primary tool for reaching potential victims, with profiles that look professional and posts or paid ads that promise steep discounts or great deals.
But the coverage they're pitching doesn't exist, and victims of these kinds of scams usually don't discover the fraud until they try to file a claim or need assistance.
Who does the false broker target?
False brokers tend to look for victims who aren't familiar with the insurance process in Canada — which means they frequently prey on young people looking for affordable insurance options and newcomers to Canada who are learning to navigate the Canadian insurance system. By taking advantage of these victims' knowledge gaps, scammers can make offers that seem like the perfect fit.
What are the consequences of falling for a false broker?
Buying from a false broker has serious consequences, including:
- No legal recourse. If you buy insurance from an unlicenced broker, you won't be protected by insurance laws.
- No insurance. Fake policies leave you uninsured, so your claims won't be covered.
- Policy cancellations. If the scam resulted in the cancellation of your real policy, this cancellation could impact your insurance record, potentially leading to higher premiums in the future. And remember, if you’re a TD Insurance customer, we don’t use brokers, so if you get a call from someone who claims to be a TD Insurance broker, it’s a scam.
And remember, if you’re a TD Insurance customer, we don’t use brokers, so if you get a call from someone who claims to be a TD Insurance broker, it’s a scam.
Phishing scams
In a phishing scam, fraudsters send fake emails or texts that look like they're from your real insurance company, in an attempt to steal sensitive information.
These messages often sound urgent, warning of policy cancellations or offering a time-limited refund, with an accompanying link to a website that looks exactly like your insurer's website — but in reality, you're being sent to a page that's designed to steal your personal information, such as your banking details or passwords.
Always avoid clicking on links in unsolicited or unexpected emails or text messages—and contact your insurer directly if you're unsure.
No-cost coverage or other too-good-to-be-true offers
Scammers will often bait their victims with offers that seem too good to be true, such as "free insurance", no-cost coverage, or an unexpected refund.
Be wary of such offers, as criminals count on them to deceive you into paying a small fee or providing them your personal information to "claim" the benefit they're offering. Remember, legitimate insurance companies won't ask you to make an upfront payment to access an offer or receive a refund, so it's wise to be skeptical of these kinds of unsolicited offers.
How to identify an insurance scam
Spotting an insurance scam can save you from a load of financial and emotional headaches. Here are some common warning signs to help you spot a scam before it's too late:
- Unsolicited calls from a "broker" or "agent". Be wary of calls, emails, or texts from someone you've never contacted before who claims to represent an insurer. These messages are often scams.
- Sense of urgency. If you're being rushed into making a decision, take the time to carefully assess the situation before you do anything. Creating pressure or a sense of urgency is a common tactic to get you to act before you can verify a scammer's claims.
- Unusual payment methods. Genuine insurance providers will never ask you to make a payment in an unusual or non-standard way, such as with gift cards.
- Extremely low prices. Offers that seem to be far below market rates are usually a sign of fraud. The old adage applies here: If it's too good to be true, it probably is.
- Unlicenced broker or unregistered insurer. Before purchasing a policy, always check that the broker or insurer is registered with your provincial insurance regulator.
How to verify an insurance company or broker
Verifying an insurance company or broker before you commit to a policy is an essential step that's well worth the effort. Here's how to ensure the broker or insurer you're dealing with is legitimate:
- Check with your provincial insurance regulator. Your province's insurance regulatory body will have an up-to-date list of licenced brokers and registered insurers. Reach out to them to confirm the broker's or insurer's credentials.
- Contact the insurer directly. If someone claims to represent a specific insurance provider, don't rely solely on their word. Contact the insurer they're claiming to represent directly, using their official contact information, to confirm that the person is legitimate.
What to do if you suspect an insurance scam
Think you've come across an insurance scam? Stay calm, and take the following steps:
- Stop communications immediately. Don't respond to calls, emails, or messages from the suspected scammer, and avoid sharing any further details.
- Verify their identity. Contact your provincial insurance regulator or the insurance company directly to confirm the legitimacy of the broker or the policy you're being offered.
- Report the incident. Notify your provincial insurance regulator, the Canadian Anti-Fraud Centre, and, if necessary, your local police.
- Secure your accounts. If you've shared any sensitive information, notify your financial institution, and consider changing your passwords.
- Spread the word. Scams affect not just individuals, but the community as well. Let family, friends, and colleagues know about the scam to help prevent others from falling victim.
How to protect yourself from an insurance scam
Scammers are out there, but that doesn't mean falling for an insurance scam is inevitable. Here are some ways you can protect yourself:
- Only buy from a trusted or verified insurer. If you have any doubts, follow the steps we've outlined above to verify that the broker or insurer you're dealing with is legitimate.
- Be careful who you share your personal information with. Scammers can do a lot with any sensitive information they collect from you. Only share information when absolutely necessary, and only with a verified source.
- Stay informed about common scams. Check the Canadian Anti-Fraud Centre for updates on the latest scams or browse through their scams index.
- Activate fraud alerts on your bank accounts. Most financial institutions let you set up alerts so you can monitor your accounts for suspicious transactions.
Scammers rely on confusion and urgency to get what they want, but with the right knowledge, you can avoid their traps. Remember to stay cautious, verify credentials, and report anything suspicious. It's the best way to protect yourself and others.
1 https://publications.gc.ca/collections/collection_2024/grc-rcmp/PS61-46-2022-eng.pdf
2 https://www150.statcan.gc.ca/n1/pub/89-652-x/89-652-x2023001-fra.htm; https://www.mdpi.com/1660-4601/16/18/3276; https://www.aic.gov.au/publications/tandi/tandi518; https://crcvc.ca/wp-content/uploads/2011/10/helping-victims-of-fraud-recover_Jan2016_final.pdf
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In the case of conflict between the content on this page and your policy wordings, your policy wordings shall take precedence.