RECOGNIZING RED FLAGS BEFORE A SUSPICIOUS ACTIVITY BECOMES A PROBLEM by Beth Smoller, KAIA
An email from one of our KAIA members recently landed in my inbox and caught my attention.
The member wasn’ t reporting that the agency had fallen victim to a scam. In fact, it was really the opposite. The agency had received what appeared at first to be a couple of good new business opportunities. But as the process moved along, little things started not to add up. And thankfully, someone noticed.
The agency was contacted about homeowners’ coverage for two individuals reportedly purchasing two separate homes. The prospective customers were quick to provide personally identifiable info( PII), and lots of it, including Social Security numbers, dates of birth and prior addresses.
At first glance, that might seem reassuring. After all, someone willing to hand over that much personal info must be legitimate, right? Not necessarily.
As the agency worked through the quotes, some of the info being provided began to conflict. Details on the properties, including construction info and roofing, changed or didn ' t match what the agency was finding.
Then came the payment. After receiving proposals, one of the individuals wanted to use a single checking account to pay the premiums for both policies. And he wanted the agency to take that payment right away.
The agency explained that additional info was still needed and that the applications could be completed the following morning. Instead of accepting that explanation, the individual continued pressing to have the payment processed immediately.
That combination of circumstances was enough for the agency to stop.
WHY THAT MATTERS
We don ' t know whether the people involved were actually attempting to commit fraud. The agency caught the situation early enough that we may never know where it was headed. But after hearing the story, I did a little digging and found some additional info that I thought our members might find helpful, particularly those of you on the PL side of the business.
In July 2026, the National Insurance Crime Bureau( NICB) issued an alert about what it called an emerging homeowners“ reverse payment” scheme. NICB reported seeing policies purchased for newly acquired properties using alleged synthetic identities. Shortly after the policy was created, the fraudster would cancel it and request that the premium refund be sent to a bank account using routing info previously supplied. In some cases, the refund was processed before the original premium payment had even been cleared.
That ' s an important reminder that the objective of a suspicious insurance transaction may not always be clear and obvious at the beginning.
It also explains why someone who is eager to purchase insurance, and particularly eager to pay for it, shouldn ' t automatically be viewed as risk-free.
NICB has also been warning about the broader growth of synthetic identity fraud. Unlike traditional identity theft, where someone simply assumes another person ' s identity, a synthetic identity can combine legitimate pieces of personally identifiable info, such as a Social Security number or date of birth, with fabricated names, addresses, email addresses or other info to create what appears to be a real, geniune person.
In other words, having the“ right” Social Security
20 KANSAS INSURANCE AGENT & BROKER