Investigation reveals unlicensed auto insurance sales and policy fraud to vulnerable consumers

Ontario Provincial Police arrest and charge Toronto man for selling fraudulent auto insurance coverage

Toronto, ON (Mar. 18, 2019) – A joint investigation conducted by Desjardins Insurance and Aviva Canada has revealed that fraud artists prey on innocent and unaware drivers with the promise of cheap auto insurance, which turns out to be fraudulent.

In mid-2018, Desjardins Insurance learned of allegations of fraudulent activity by Mr. Sherif Aly, an Ontario resident not licensed to sell auto insurance. Desjardins Insurance reached out to Aviva Canada to collaborate on a groundbreaking joint investigation into this activity. Coincidentally, in October of 2018, another investigation was launched separately by the Ontario Provincial Police (OPP). This investigation was triggered when they pulled over a driver in Port Credit for an unrelated traffic offense and determined that this driver’s insurance policy was invalid, and his pink slips were fraudulent. These two investigations into Mr. Sherif Aly allege that he sold insurance coverage without a license, in the case of Aviva and Desjardins, and allegedly supplied documentation of fake auto insurance policies for cash as found by the OPP.

“This is the worst kind of insurance fraud because it leaves victims unprotected and vulnerable to significant financial liability – the exact opposite of what an insurance policy is designed to do,” said Colm Holmes, President and CEO of Aviva Canada.

“Desjardins Insurance is taking a proactive approach to fighting fraud and is committed to reducing the physical and financial impact it has on everyone. Honest insurance clients should not have to pay because of criminals who cheat the system,” said Denis Dubois, President and Chief Operating Officer of Desjardins General Insurance Group.

In Ontario, it is an offence to drive a motor vehicle without legitimate proof of insurance, which must also be produced on request. Failing to do so could leave a driver personally liable for any or all damages in the case of an at-fault accident.

Drivers caught without valid auto insurance may face:

  • A fine ranging from $5,000 – $25,000.
  • Seizure of their vehicle for up to three months, and payment of all storage costs.
  • Suspension of their driver’s license for up to one year.
  • Criminal charges and a doubling of minimum fines for a second offence.

Drivers involved in an auto collision without valid auto insurance may face consequences well beyond any physical damage, including:

  • No coverage for any collision damage to their own vehicle.
  • No legal recourse for damages to a vehicle or bodily injury.
  • No protection from lawsuits for damage to other vehicles or for bodily injuries.
  • Personal financial liability, including wage garnishing and property liens.
  • No protection available to family or friends involved in uninsured car, as well as personal exposure to legal action.

Mr. Aly was arrested on February 9, 2019. He faces two counts of Fraud Under $5,000, Falsification of Books and Documents, and Fraudulent Intent. The charges are based on the OPP’s investigation involving the man driving in Port Credit without proper coverage, and the original alleged victim, whose approach to Desjardins promoted the joint Desjardins-Aviva investigation into Mr. Aly.

Fraud Prevention Month

March is Fraud Prevention Month, which brings awareness of how acts of insurance fraud can target vulnerable consumers. Individuals with low awareness of the auto insurance purchasing process, and those considered high-risk drivers can be drawn to a low-cost solution, which may be fraudulent.

Auto insurance fraud is an ongoing, serious issue and it is costing consumers. In fact, a 2018 Pollara survey revealed that 73% of Ontario drivers agree that cracking down on fraud would reduce their auto insurance premiums. The time has come for government, regulators and insurance companies to work together for meaningful change.

About Desjardins Group

Desjardins Group is the leading cooperative financial group in Canada and the fifth largest cooperative financial group in the world, with assets of $295.5 billion. It has been rated one of Canada’s Top 100 Employers by Mediacorp. To meet the diverse needs of its members and clients, Desjardins offers a full range of products and services to individuals and businesses through its extensive distribution network, online platforms and subsidiaries across Canada. Ranked among the world’s strongest banks according to The Banker magazine, Desjardins has one of the highest capital ratios and credit ratings in the industry.

About Aviva Canada

Aviva Canada is one of the leading property and casualty insurance groups in the country, providing home, automobile, leisure/lifestyle and business insurance to 2.8 million customers. A subsidiary of UK-based Aviva plc, Aviva Canada has more than 4,000 employees focused on creating a bright and sustainable future for their customers and communities.

Aviva Canada invests in positive change through the Aviva Community Fund, Canada’s longest-running online community funding competition. Since its inception in 2009, the Aviva Community Fund has awarded $9.5 million to more than 400 charities and community groups nationwide. Aviva Canada, bringing over 300 years of good thinking and insurance solutions to Canadians from coast to coast.

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Source: Aviva Canada

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