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Homeowners may have been insurance fraud victims

Posted On Tue, January 17, 2012

An investigation is underway which could shed light on possible fraudulent activity involving multiple banks charging higher prices for home insurance rates, according to The New York Times.

The investigation is led by the law office of Benjamin Lawsky, the superintendent of the Department of Financial Services for the State of New York. The issue at hand is the use of force-placed insurance, according to the news source. The type of insurance has been used by many banks and lenders during the economic downturn, and could be difficult for some consumers to stay current with payments.

There was a total of 31 subpoenas issued in late 2011, according to the news source. Some of the companies involved in the case include Citigroup, Wells Fargo, Bank of America and JPMorgan Chase. The insurance policies were reportedly as much as 10 times as expensive as the original plans homeowners possessed. Many of these incidents may have involved consumers trying to receive mortgage help.

It may be important for consumers to familiarize themselves with home insurance plans before signing up for a policy. To make this easier, comparing home insurance quotes may be the best option.

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