March 6, 2014
Toronto – A Toronto-area rehabilitation clinic has been convicted and fined for submitting false invoices to an auto insurance company for services that were not provided. The conviction resulted from co-operative investigations involving the Financial Services Commission of Ontario (FSCO), the Insurance Bureau of Canada, insurers, and police.
The prosecution stemmed from an investigation into a staged auto accident ring, dubbed “Project Whiplash” by Toronto Police. According to the Insurance Bureau of Canada, insurers paid out an estimated $4 million in fraudulent claims as a result of this and other related scams.
On November 21, 2013, North York Health and Rehabilitation Centre (1280 Finch Avenue West, Suite 519, Toronto, Ontario) pleaded guilty to engaging in unfair or deceptive acts or practices by charging an insurer for services that were not provided. On March 3, 2014, the court imposed a $75,000 fine on the North York Health and Rehabilitation Centre.
FSCO is not aware of any connection or affiliation between this clinic and North York Rehabilitation Centre Corp. (2040 Sheppard Ave. East, Suite 202).
In addition to the conviction and fine for the clinic, Jeyakanthan Thivendran, a principal of North York Health and Rehabilitation, previously plead guilty to a charge of failing to take reasonable care to prevent the company from providing insurance claims forms to an insurer that were not in accordance with the Insurance Act and regulations. He was fined $5,000.
FSCO encourages anyone with information about auto insurance fraud to call its anonymous tips line (1-855-5TIP-NOW). The public can also submit anonymous tips to FSCO online through its website.
FSCO investigates allegations of misconduct, unfair practices and non-compliance with legislation or regulations in its regulated sectors. When warranted, FSCO takes enforcement action.
FSCO is an agency of the Ministry of Finance established under the Financial Services Commission of Ontario Act, 1997. It regulates insurance, pension plans, loan and trust companies, credit unions and caisses populaires, co-operative corporations and mortgage brokerages and administrators in Ontario.
As other Insurance Act and related criminal prosecutions remain before the courts, there will be no further comment on the convictions from FSCO.
- Ontario's Auto Insurance Anti-Fraud Task Force was announced in the 2011 Budget. The Task Force was established in July 2011 and submitted its final report to the government in November 2012, which contained 38 targeted recommendations on four key areas: fraud prevention, detection, investigation and enforcement and regulatory roles and responsibilities.
- Through amendments to the Insurance Act (Bill 65) in June 2013, the government established the legislative framework for FSCO to license health clinics that invoice auto insurers and regulate their business practices. The licensing and regulation of health clinics was a key Task Force recommendation.
- In January 2013, the government announced the introduction of regulatory amendments to help prevent auto insurance fraud and abuse, including:
- Requiring insurers to provide claimants with all reasons for denying a claim.
- Ensuring claimants are given a detailed, bi-monthly statement of benefits paid out on their behalf.
- Requiring claimants to confirm attendance at health clinics.
- Providing FSCO with the authority to stipulate by Guideline the maximum payable by insurers for goods as well as services.
- Banning providers from asking consumers to sign blank claims forms.