ICBC and police crack down on driver licensing fraud — March 8

Civil lawsuit and criminal investigation underway

ICBC and the RCMP announced today that their ongoing investigation of a fraudulent driver licensing scheme operating in the Lower Mainland has led to two arrests.

The investigation is a cooperative effort between ICBC's Special Investigation Unit and the RCMP. It was launched as the result of anonymous tips received by both the police and ICBC.

ICBC has also launched a civil action against the owner of Dragon Driving School Canada Ltd. of Richmond in connection with allegations that, in exchange for the payment of a large fee, he arranged for B.C. driver licences to be issued without completion of the required testing. In the cases uncovered, there is evidence that the applicant either avoided taking a knowledge test or a road test, or in some cases, both. Also included in the civil action is an employee of the ICBC driver licensing centre in Burnaby.

“ICBC has a policy of zero tolerance on fraud,” said Mark Withenshaw, ICBC's vice president of loss management. “Driver licensing fraud, along with insurance and claims fraud, affects ICBC's customers and all B.C. motorists. This investigation involves very serious allegations of wrongdoing.”

“ICBC is confident that our driver licensing processes and controls are among the best in North America, and we are now taking steps to make further improvements to reduce the likelihood of further incidents such as this,” said Withenshaw.

“ICBC and the RCMP have been working together on this investigation since the initial tips were received,” said RCMP Acting Staff Sargent John Ward. “A driver's licence is more than a permit to drive; it's also an important form of I.D. We are pursuing that aspect of the investigation very diligently.”

There have been over 200 suspect driver licences identified. All fraudulently obtained driver licences will be cancelled. ICBC will also be providing evidence of the fraud to the Superintendent of Motor Vehicles in support of ICBC's recommendation for cancellation of the driving school's license.

Since obtaining their fraudulent licences, some of these drivers have made claims on their insurance. The civil action filed by ICBC also seeks recovery of the amounts paid out on such claims, along with punitive damages and costs incurred in investigating this matter.

Anyone with information that might be useful to this investigation is encouraged to contact their local RCMP detachment, ICBC, or CrimeStoppers.

ICBC's Tip Line is an effective tool for combatting fraud, averaging more than 800 calls every month from people reporting suspicious claims and other instances of potential fraud. Information is confidential and callers can remain anonymous. The Tip Line number is 604-661-6844 or 1-800-661-6844.

For more information contact:
Doug McClelland 604-982-2476
Moira Wellwood 604-982-2480

RCMP media enquiries can be directed to A/S/Sgt.John Ward at 604-264-2929.

ICBC reports net income of $225 million for 2003 — March 1

ICBC has reported net income of $225 million for the year ended December 31, 2003, compared to net income of $45 million for 2002.

ICBC's net income stays in the company, protecting customers by allowing the company to absorb unexpected costs arising from unusual events such as earthquakes, unpredictable weather and other factors without dramatically raising automobile insurance rates.

“Our success in controlling operating costs helped to produce these positive results for our policyholders,” said Nick Geer, ICBC's president and CEO. “However, ICBC still needs to build its retained earnings over the coming years as we move to a level playing field with our competitors.”

Insurance premiums earned in 2003 increased to $2.859 billion, from $2.628 billion in 2002. Premium revenue growth is due to recent rate adjustments, increased optional coverage sales, and a 1.6 per cent increase in the number of basic insurance policies sold during the year.

There were fewer claims reported in 2003 than in the previous year. However, current year claims costs for 2003 climbed 0.7 per cent to $2.208 billion, from $2.193 billion in 2002, due to an increase in the average cost of claims, particularly claims involving injuries.

For more information contact:
Doug McClelland 604-982-2476
Moira Wellwood 604-982-2480

Body shop fraud saga comes to a close — February 20

Lengthy court battle results in favourable decision for ICBC

A recent B.C. Supreme Court judgment marks the end of a five year civil suit by ICBC against a Vancouver body shop, Eurosport Auto Co. Ltd. The company and its owners were ordered to pay more than $115,000 in punitive damages and over $75,000 in compensatory damages plus costs.

ICBC filed suit against Eurosport Auto Co. Ltd. and owner Frederick Ngok Hwang in 1998 alleging that the body shop submitted bills for work that was never done and for parts that were not installed on vehicles between January 1996 and February 1998.

Mr. Justice Parrett held that Eurosport Auto Co. Ltd. had attempted to systematically defraud ICBC and ordered that: Eurosport Auto Co. Ltd. pay $50,000 in punitive damages; owner Frederick Ngok Hwang pay $50,000 in punitive damages; the defendents pay $47,616.63 in compensatory damages and $28,621.30 in investigative costs; and, Patti Hwang (wife of owner Frederick Hwang) pay $15,000 in punitive damages.

In his Reasons for Judgment, Mr. Justice Parrett wrote, "The present case is an appropriate case for the award of punitive damages. This is a case where the defendants defrauded ICBC. As was pointed out by Southin J.A. in ICBC v. Sanghera, "The Corporation is by statute the insurer of all British Columbian motorists. Fraud on the Corporation is, in reality, fraud on all the motorists of British Columbia and deserves such punishment as the civil courts can properly administer."

"This most recent decision is important to British Columbians for a number of reasons," says ICBC chief operating officer Bill Goble. "It sends a strong message to anyone considering any type of fraud against ICBC and it helps us ensure we can keep rates as low as possible for our customers."

In May of 2003, the B.C. Court of Appeal upheld a Provincial Court criminal conviction against Eurosport Auto Co. Ltd. and Frederick Hwang on 12 counts of contravening section 42.1 of the Insurance (Motor Vehicle) Act. The convictions in R. v. Eurosport Auto Co. Ltd. resulted in a sentence of fines totalling $120,000.

The recent decision can be found at

http://www.courts.gov.bc. c a/Jdb-txt/SC/04/01/2004BCSC0164.htm

and the R. v. Eurosport decision at

http://www.courts.gov.bc.ca/jdb-txt/ca/03/02/2003bcca0281.htm

For more information contact:
Doug McClelland 604-982-2476
Moira Wellwood 604-982-2480

Copyright © 2008 ICBC - Insurance Corporation of British Columbia