10/31/2014

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Consumer

Auto insurance 'robocalls' target local drivers

Auto insurance 'robocalls' target local drivers

A new round of robocalls is targeting local car owners. The recordings give no company name, but claim they can save you hundreds of dollars on car insurance.  Failure to identify the company is only one of the red flags.

My colleague  Rick Van Cise at KOMO News Radio alerted me to calls after his phone was targeted this week.  When he answered he got a recording from "Mary".

"And the first thing that this woman says is we've been reviewing your driving record or your insurance record and of course that gets your attention," he said.
 
Van Cise says he ended the call when Mary's recording urged him to press 1.  But he couldn't help notice that his caller ID displayed a 253 area code and showed the call was coming from Puyallup. 

I called the number I got the following recording'  promising me big savings on auto insurance

"Hi this is Mary. Auto Insurance companies like State Farm, Nationwide and Farmers are competing for your business because our local auto insurance rates just went down this week," the recording said.
   
The recording runs approximately 25 seconds.

"Press 1 to speak with me and I'll give you a new quote right now and save you several hundred dollars on your policy. Pressing just one button can save you money. So press 1 to get the best coverage at the best price, right now."

When I pressed 1 I actually got  a woman who said she was Mary. She told me she was paid to identify potential customers who are likely paying too much for automobile insurance. Mary wanted to know if I was willing to switch companies if she found a company that could lower my auto insurance premiums. She told me if I answered a few questions about my car, home, insurance and driving record-  she could connect me with an agent in my area who could give me a quote. 

When I declined, she was very cooperative, emphasized that she did not want to pressure me.  And told me she would put my number on the Do Not Call list.

The State Insurance Commissioner's office says it sounds like what's known in the industry as a lead generator.  Mary confirmed as much during our phone  conversation.  She told me once the consumer answers her questions, she passes pass the information an insurance agent in your area who can give you a quote for a better rate, then connects you with that agent.  A spokesman at the Insurance Commissioner's office says insurance companies reportedly pay  lead generators about $4.00 for every person they refer0 which explains all the robocalls.
     
After hearing the recording, the Insurance Commissioner's office started an investigation into potentially misleading claims,  and the way insurance is being sold.  State investigators are concerned about the recording's implication that something happened this week to cause auto insurance rates to go down.   They say that's not the case.
    
When I asked how she got consumer phone numbers, Mary told me they got phone lists by working with the "DMV".  But Washington state doesn't have a DMV.  In this state the agency that deals with vehicle licensing is called the state Department of Licensing and officials there stress they never provide consumer lists for commercial purposes.  It's against state law.

The Federal Trade Commission is also interested in the insurance robocalls, and warns that based on the information available so far,  there's a good change the robocalls violate federal robocall regulations.

The bottom line is if you want to save money on car insurance, start by containing your own insurance company.  Then, compare rates by contacting known companies with local physical offices- so you know who you're dealing with.
 
And as always, if you get a robocall trying to sell you anything  do not press 1.  Do not press anything. Just hang up.

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