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Private Investigators & Company Fraud

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What do private investigators and companies have in common? They both aim to prevent fraud. Why? Well, fraudulent activities within a company cost millions if not billions in revenue across Canada per year. Real life examples of fraud include employees who:

  • Try to claim medical insurance when they aren’t sick
  • Steal company product to modify and resell
  • Lie about property damage

Fraud is illegal. In many cases, it’s also extremely difficult to catch. It is for this reason that companies hire private investigators to uncover the truth. Despite what’s portrayed on television and the movies, private investigators don’t just hang out in their office, waiting for cases to fall into their lap. Many private investigators and private investigation agencies work closely with other companies and even police to catch a criminal in the act.

Types of Company-Related Fraud

As you can imagine, there isn’t just one way to commit fraud. Companies and even employees of companies can do many things that aren’t legal. Therefore, there are many different types of company related fraud. Some of these include:

Insurance Fraud

Many companies have different types of insurance. In fact, it is required (by law) for these companies to provide different types of insurance for their employees. For example, some companies provide insurance to their employees. In the case an employee is injured on the job, this insurance covers medical and other expenses. The injury might also prevent an employee from returning to their job. The company’s insurance will also help to cover the longer-term cost of the employee’s injuries as well as his or her recovery time.

The problem occurs when people take advantage of this system. Many people lie about the extent of their injuries and even pretend to be ill. This of course, is illegal. It is also costly for the company the employee works for, as well as for the insurance company.

Company Asset Fraud

Software companies, for example, have a lot of private and confidential information. This includes the software or any other assets the company might not want the competition to get their hands on. It is why these types of companies require their employees to sign an agreement when hired.

Signing this agreement indicates that the employee will not take any company asset and sell it elsewhere. This is fraud because the employee does not own that product or asset.

Financial Statement Fraud

All North American businesses and companies need to complete accurate financial statements. That’s right, just like everyone else; businesses are subject to paying taxes. So, let’s say that a company alters or tweaks any financial information. This is considered fraud. This also applies to any employee who might want to tweak the statements in their favor.

For example, a Chief Financial Officer could alter their company’s financial statements. He or she might do this to take some of the company’s money for themselves.

Private Investigators & Companies—Building a Relationship

Many companies across Ontario and Canada hire private investigators or private investigation companies to work for them. Does this surprise you? It shouldn’t. Growing businesses have a difficult enough time keeping on top of their hiring processes that they often don’t have the time—or skills—to crack down on fraudulent activity.

Here’s a very recent example of the kind of help a private investigator can offer:

Project Bumper

While most companies conduct business with integrity, some do not. In Ontario, an insurance company called Aviva Canada found this out for themselves first hand. They had long suspected a connection between rising insurance premiums and auto body repair shops inflating prices. It wasn’t until they received a complaint that an auto body repair shop had purposefully damaged a vehicle that they took action.

Aviva hired private investigators to help them dig deeper. Together, they came up with a plan they called, Project Bumper. Part of this plan ensured that every step of the process was carefully recorded. The evidence could then be used in court if they found illegal activity.

To start, they purchased vehicles and manufactured damage and accidents. They had a professional appraise the cars and damage, and recorded exactly how much the repairs should cost. Private investigators then went undercover, acting as drivers for the damaged vehicles. The private investigators would wait for a tow truck to arrive and then agree to go to whichever repair shop the tow truck driver suggested. Hidden cameras picked up the rest.

The results showed that parts weren’t replaced, but the repair shop charged for them anyway. In other cases, the repair shop charged for a new part for parts that had only been repaired. Some reports did show that the repair shop deliberately damaged the vehicles. According to CTV news: Repair shops on average charged more than needed by 57%. This means that across Ontario it cost $547 million in fraud and approximately $2 billion in Canada.

Private Investigators & Fraud

Private investigators take on fraud cases for many reasons. In some situations, like the Project Bumper, the police will turn to a private investigation agency to hire some private investigators. In other situations, a company will hire a private investigator to look into an employee’s actions on the job. Insurance companies in particular, hire private investigators to look after claims that appear false.

Private investigators use a variety of techniques to prove fraudulent activity. One of those techniques is to go undercover. Project Bumper required many different private investigators to go undercover to trick a company into taking their vehicles. Going undercover might seem exciting, but you should know that it requires special training. They also have a license that allows them to go undercover without punishment.

Surveillance is another technique private investigators use to catch fraudulent acts. For example, let’s say that an employee is injured on the job in Ontario. He or she says that they need time to recover. So, they claim some money from the insurance company. However, some employees take advantage of this system. A private investigator can park their vehicle close to the employee’s home. From there, they can watch the employee’s movements. The private investigator can then give the insurance company information. In this case, the employee lifted their child, despite his or her back injury claim.

Is your company looking for a private investigator to help you with your specific needs? Contact us for more information!


Phone: 647-479-8474

About the Author

Whitney Joy Smith

Founder of The Smith Investigation Agency in 2014, Whitney Joy Smith’s extensive background as a private investigator is matched only by her passion for the role. A graduate of several respected institutions, including Northwest Florida State College and George Brown College, her early years in life were spent between Canada and the United States. This education, along with her formative years as a private investigator in various agencies, informed much of her knowledge of private investigative laws, regulations, and operating standards in both countries.

The recipient of numerous industry awards and accolades, including the Consumers Choice Award, Best in Ottawa, and many others, Whitney takes pride in working closely with her ever-growing agency to raise the bar, maintain compliance, and meet the investigative needs of clients. Whitney is active in various membership and supporting roles, including the CPIRC, CBN, CAPI, Canadian Women’s Chamber of Commerce, and many others. Her experience-driven, thought-provoking articles have been featured in everything from Readers Digest to Business News Daily, and she strives to continually redefine standards for those in the private investigative and security fields. Learn more about Whitney and the team at The Smith Investigation Agency today.

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