Another Insurance Agent Scam in Our Area

Our Florida insurance attorneys saw another unfortunate news story about an unscrupulous insurance agent scamming his customers out of their hard earned money. This happens too frequently (see a previous blog post here) and Florida insurance customers need to be informed and mindful of potential scams and shady agents and insurance companies. This recent scam was committed by 45 year old Boynton Beach insurance agent Kenneth Sachs and he was arrested last week by Palm Beach County deputies for embezzlement and misappropriation of insurance funds.

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According to insurance investigators, Sachs, who owned Insurance Matters of Florida II on North Congress Avenue in Boynton Beach and lived in Boca Raton, took a total of $11,519 from seven of his clients between June and December of last year. The clients paid for premiums for homeowners and car insurance, but Sachs took the money for his own personal use instead. Apparently, Sachs had $15,000 in monthly expenses, which he could not pay for and keep up with, so he took the money to cover the expenses he could not actually afford. His particular scam involved loans from third party premium financing companies to pay for his customers insurance policies, after he pocketed the premiums they paid. On these loans, he forged his clients signatures and agreed to the contracts without their consent. He then took 20 to 25 percent of his clients paid premiums to pay back these contracts. Sachs’s scam was uncovered when one of his clients complained in December to the state Department of Financial Services. Sachs has been released from Palm Beach County Jail and will wait for his trial to start.

If you suspect insurance fraud, like Kenneth Sachs’s customers finally did, you can contact the Florida Department of Insurance Fraud. There is even an online reporting mechanism, and reporting scams and shady insurance agents like Sachs can help an investigation into what happened and if criminal activity occurred. From October 2011 to end September 2012, the Department made 1,337 arrests, so issues of fraud are obviously a continuing problem in our state. Some easy tips to avoid a scam are: check on the insurance agent’s license with the state bureau; call the Better Business Bureau and check if there have been any complaints about the company or agent; pay premiums with a check or money order made out to the insurance company; and do some research on whether the insurance company can afford to pay out its claims. These simple steps before taking a policy can help you avoid a scam.

Whether dealing with agents, or putting your trust in insurance companies, you deserve to receive the benefits you paid for in a timely manner when a disaster strikes. And under Florida insurance law, if you proceed with a case against an insurance company and you succeed, the attorney’s fees will automatically be the responsibility of the insurance company. So no matter the size of your claim, you will get to keep the entire court award.

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Collapse of Florida Property Insurer Due to Fraud