Many Michigan Drivers Could Be Scam Victims

Posted & filed under Insurance Fraud, insurance news, Michigan Car Insurance.

Insurance regulators in the state of Michigan said today that there could be hundreds of drivers in the Detroit area mistakenly purchased fake auto insurance that was issued on behalf of a company based in Texas.

According to Jason Moon, a spokesperson with the Michigan Office of Financial and Insurance Regulation (OFIR) said that his organization had, “…reason to believe there may be as many as 1,000, if not more…” drivers who bought fraudulent insurance certificates.

Last week, the state ordered Don Diamond and Ethos Insurance Michigan, Ethos Insurance Group, and Ethos Mutual Insurance Group to cease their fraudulent activity. The bogus policies claimed to provide coverage through legitimate companies like Farm Bureau Insurance and Dairyland Insurance, and were issued under the Ethos or Diamond names.

When Texas-based Mr. Diamond was contacted, the result was that Detroit-based subcontractors were blamed for writing sham policies and taking money from consumers. Diamond said that Ethos did notify state authorities when the problem was discovered. He said he thinks the number of victims is more like 200, and has promised to return funds to anyone with a legitimate receipt for their fake policy.

Speaking to the press, Diamond said, “We don’t want any consumers to have any problems. We’ve been in business since 2000 and have never had a problem like this.”

Detroit-based motorists who think they may have been scam victims should contact the OFIR offices at 877-999-6442. This is especially urgent as they are technically driving without insurance.

OFIR’s investigation of the situation found many low-cost auto insurance policies in various locations around Detroit. Moon said that concerned policyholders contacted the state after they didn’t receive proper insurance documents. Their investigation will continue, but Michigan Attorney General Bill Schuette’s office has been given the results gathered so far for review.