Insurance broker bridge toll fraud may be widespread, but not systemic: insurance council

The Insurance Council of B.C. says its investigation into widespread fraud related to bridge tolls committed by dozens of brokers across the province is unprecedented, but there's no evidence to suggest it's a systemic problem.

More than 100 licensees are slated for review after their names came up in an ICBC investigation into false bridge toll payment receipts being used to help drivers avoid paying their bills.

So far, two brokers and 27 broker offices have been fined for the practice. One licensee was hit with a six-month suspension.

The insurance council, which regulates brokers in B.C., said it will take months to review each broker on ICBC's list.

Executive director Gerald Matier said he's never seen so many investigated for the same practice at the same time in his 25-year career.

"This is a first — the first and hopefully the last," he said Wednesday.

Inquiry finds widespread fraud

ICBC launched its inquiry in 2015 after it discovered the false receipt numbers.

In B.C., drivers with outstanding tolls from the Port Mann or Golden Ears bridges are blocked from renewing their licenses or car insurance until they pay. If they're more than 90 days overdue, a "refuse-to-issue" (RTI) hold is placed on their file. At the time of ICBC's investigation, drivers had to give their broker proof of payment to lift the restriction.

ICBC's inquiry showed that fake receipt numbers had been punched into the Autoplan system to unblock clients' files.

Valid receipts are made up of a combination of numbers and letters. In one case, according to a council decision, a broker pushed a fake number through simply by adding a two-letter prefix. The original number wouldn't work, but passed with the extra letters.

Matier said it's still not clear how other brokers may have been able to cheat the system — or why — but that it's still being investigated.

Despite the widespread issue, he said the council doesn't believe the fraud is a systemic problem.

"Council did a lengthy investigation to see if these were all one-offs, or whether it was being driven by particular insurance agencies where they had directed their staff to do this," Matier said. "We had no evidence of any agency or senior manager with an agency that had given that kind of direction.

"We are surprised ... Best I can say, [the idea] got passed around by word of mouth," he said.

Matier said the council, which regulates insurance brokers in B.C., believes the practice was mostly for client convenience.

"I think these were, for the most part, simply in most cases to accommodate a client so they could proceed with their insurance transaction," he said.

"Many of the people who are under investigation have said, 'You know, it was the last day for the client to get their insurance renewed. They weren't able to pay the outstanding tolls.'"

On Tuesday, ICBC said it "regularly monitors debt overrides to ensure RTI transactions are handled appropriately."

Nowadays, RTI restrictions are lifted from a driver's file electronically in real-time once their payment is processed by TReO.

Brokers found responsible for fraud could be fined $5,000 or have their licenses suspended or cancelled.

There are approximately 50,000 to 60,000 overdue and outstanding customer accounts being held by ICBC for the Port Mann Bridge, representing around four to five million dollars in unpaid tolls.

'Public confidence ... shaken'

The NDP minister in charge of ICBC, Attorney General David Eby, acknowledged it was the latest piece of bad news for the Crown corporation, coming in the same week of a report saying insurance rates might climb 30 per cent in the next two years.

"Public confidence ... has been shaken in the last little while," he said

"Even though ICBC detected this and prosecuted this with the brokers involved ... it still reflects on the corporation in a very negative way for the public. That is a challenge we will all have to overcome together."

However, he did say that any future cutbacks by the organization wouldn't affect its ability to investigate these situations in the future.

"They need to have very good compliance and audit resources. Simply because they're in financial crisis doesn't mean the resources don't go to detecting and prevent this type of activity," said Eby.

"From my perspective, this is a matter of public confidence in the insurer."