Insurance companies regularly check your balance when you sign up. It was therefore confusing that Progressive would have issued my wife with a policy without her thawing her file. But TransUnion was listed as a “financial responsibility provider” – an amusing euphemism, if you know how long consumer advocates have been complaining about insurance companies using credit data to set interest rates – and my wife’s frozen credit file sure showed Progressive pinged it this month.
How? Incredibly, an exception often allows insurance companies to check your balance even when you don’t want to have anything to do with it. We learned that this exception meant Progressive could put itself on my wife’s file – which in turn helped someone like us pick the pocket of New York State and its taxpayers.
Progressive, in his wisdom, believed my wife was responsible enough to warrant cover. Fortunately, Mr. Pasternak paid! The second page of our welcome package said that “the authorization you gave for your first installment” should come from a bank account with his name on it.
So meet our new best friend. With a name like Shiran Pasternak he was a quick internet search away. Was he the thief? We wondered. But if so, he hid it pretty well. Like my wife, he had a “Welcome to Progressive” package and notes from the state about a mysterious unemployment claim that he had never submitted. (The bank account and routing numbers in his Progressive package were identical to ours, but had no connection with any of the institutions where either of us did our financial business. With the numbers cut off, it was impossible to find out if they were from someone else or were invented.)
After we put all of this together, Mr. Pasternak – who happened to be a former New York Times employee – in Irvington, NY, took a breath of relief and let me find out what had happened to all of us.
This is how it works.
Auto insurers – even those you don’t use – already know a lot about you. They share damage information with each other in order to weed out unprofitable or reckless customers who try to switch to another provider. You can also access your driver’s license number, your current auto policy data, and the make and model of your vehicle. Often times, they buy this information from states (which end up sending money back instantly if buyers are negligent and unemployment fraud increases).
Insurers want to make applying for a policy as easy as possible. Once you fill in information, they’ll be happy to help and fill in some of these gaps for you. For some unfortunate victims, it was as easy for the scammers as copying the driver’s license number that appeared, although more technical know-how was usually required.