The economy has been pretty bad lately and apparently this bear market is far from over.  Now it looks as if it could turn into a global slowdown and maybe even a global recession as countries like England and Australia are now having housing and foreclosure messes just like the U.S.  High gas prices, rising commodities and grocery costs are really hurting the average consumer and even the rich.  Wall street bankers and such are losing jobs by the tens of thousands and almost everyone is cutting back.  No where is this pinch more evident than in the auto loan business.  Strapped consumers that are finding themselves upside down and financially strapped to gas guzzling SUV’s are turning to extraordinary methods to try and get out of these burdens – car arson and insurance fraud! 

Insurance fraud and car arson are not new as consumers in a pinch or bind have done it for years, but the numbers of reported cases by the Insurance institute and federal authorities like the FBI and SBI (State Bureau of Investigation) have gone through the roof.  What happens here is usually an SUV or other large vehicle owner that can not refinance or trade in their vehicle due to its being upside down turns to car arson as the only way out.  Upside down is auto industry lingo for owing way more than a car or vehicle is worth.  What that means is that if that SUV you owe $20,000 on is only worth $10,000 then you are upside down $10,000 and to buy a new or different vehicle you would have to come up with a sizeable out of pocket cash difference.  Most people that buy cars don’t have an extra $10,000 or so dollars just laying around so this makes it so that they cannot trade in their vehicle or sell it.

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So, what do they do?  They turn to friends and family and rig a fake car theft and burning so it looks like the car was stolen and burned or crashed.  You can see some good examples of this on YouTube as one family that did this was caught by a neighbors video camera as they purposely crashed their van into a tree (with the advent of viral internet video perps may want to think again before doing this) .  Car arsonists don’t want the car found in usable condition else it will just be returned to them.  No, it must be determined gone or in such bad shape the insurance company would declare it a total loss.  This would then cause the insurance company to total the vehicle and payoff the loan freeing the customer of the loan obligation.  This is insurance fraud and car arson. 

Now what can insurance companies and federal and state authorities do to combat this rise in car insurance fraud – a lot.  If you get caught you will be charged with a felony, possibly lose your driving license, lose your ability to carry car insurance (which means for all practical purposes you can’t drive – that’s worse than a DUI), and more.  You will go through an extensive investigation whether or not you did commit car arson and insurance fraud or not.  They will look into and question all your friends and they will make your life miserable for about a month or so.  I know this because I knew of a person that had this done and even though I didn’t know the person very well, everyone was questioned about this individual and such.  In the end this person was found guilty and he now rides the bus to work in Charlotte, NC.

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It’s a hard economy and some people are turning to desperate measures to keep food on the table and pay the bills.  Maybe in times like this it would be more beneficial if law makers in Washington stopped passing bills and such that always cause higher taxes to those that can least afford it and find a way to make one stick to the rich.  I read somewhere that the nation’s wealthiest people only pay on average less than 1% of their income in taxes, whereas the average American pays over 35 to 40% of their income in taxes.  This is why the poor get poorer and when an economy like this gets tight they have to resort to desperate measures like this.  Instead, when some CEO’s and executives are making over 1 million per day, maybe this money should get redistributed by higher corporate taxes and then these extra monies should be used to fund things like free healthcare for all and similar projects.   Maybe then fewer people would have to resort to such desperate measures as car arson and insurance fraud.

For more on this:
edmunds.com/advice/insurance/articles/115584/article.html

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