CONSUMER ALERT

Our SOS this month describes scams involving marine insurance and private party boat sales. Read on…

INSURANCE? WHAT INSURANCE?
The March 13, 2006, issue of the Insurance Journal reports that a Florida boat insurer was arrested on charges of stealing more than $845,000 in insurance premiums he received from boat owners. For nearly three years, 2001 to 2004, John Paul Castagna, the owner of Castagna Specialty Risk in Deerfield Beach, FL, allegedly pocketed premiums instead of forwarding them to insurance companies. Presumably, his customers were none the wiser until they attempted to make claims on their policies.

Castagna could spend up to 180 years in jail if convicted on charges of misappropriation of insurance premium, two counts of grand theft in the first degree, four counts of grand theft in the second degree, and six counts of grand theft in the third degree.

When you buy insurance, you should receive a written policy soon after paying your first premium and each time the policy is renewed thereafter. Check with your agent if you do not receive written acknowledgement and a policy within a few weeks. If the agent doesn’t product a policy, call the insurance company immediately to verify that they have received your premium. If you have problems, contact the agency that regulates insurance in your state. State insurance officials enforce insurance laws and regulations.

CEASE AND DESIST
Courts in Texas, Ohio, Oregon, Washington, Pennsylvania, Nevada, Wisconsin, Florida, Vermont, New Hampshire and Massachusetts have issued cease and desist orders against an organization called the International Marine Safety Foundation (IMSF) for selling insurance in those states without a license. One state, Texas, has levied a $1 million fine after the company ignored an order issued in 2000. Canada has also issued a warning about this company.

According to IMSF’s Web site: “The IMSF is neither an insurance broker nor an insurance company. The IMSF is first and foremost a non-profit membership organization dedicated to the promotion of safety for all water and snowcraft sports and recreational activities. The Foundation has over 60,000 non-participating members [Editor’s note: we’re not sure what this means] and 5,000 participating members in North America.”

The IMSF insurance plan is called “Wet Ocean Marine Insurance,” underwritten by North American Marine General Insurance, an unlicensed Panamanian company.

IMSF is also known as the International Water Marine Safety Foundation and the International Water Safety Foundation. Its principals are Gerard Beaudoin, Gregory Quail and Andrew Evans of London, UK, & Blainville, Quebec.

Before doing business with an unfamiliar company, do some research. State insurance regulatory agencies can advise consumers about whether companies are licensed to sell insurance. And, don’t forget Google! Online searches for IMSF et al turned up information raising serious red flags.

KEEP THE CHANGE — NOT!
Chances are, if you are attempting to sell an older boat and its price tag is around $10,000 or less, you may hear from someone with a little problem. The problem? A check for more than the asking price and no other way to pay for the boat.

Here’s where things get, well, interesting. The prospective buyer, usually from overseas and often with a poor grasp of the English language, offers to send you a check with the request that you send back the change, maybe as much as a few thousand dollars. Being an honest person and, moreover, eager to sell your boat, you comply right away.

Guess what? The buyer’s check is returned for insufficient funds or may even turn out to be bogus. You are out the cash and the overseas buyer is beyond the arm of the law.

If you must sell long distance, insist on payment in advance, preferably by a certified or cashier’s check, which should be deposited immediately. Wait for your bank to notify you that they have the funds in hand before you release the boat and its title to the buyer. Scamsters have been known for forge certified and cashier’s checks. And don’t, for heaven’s sake, send anyone any money.

Complaints about Internet scams should be reported to the National Fraud Information Center/Internet Fraud Watch, 800-876-7060, or fraud.org, and to the Federal Trade Commission, ftc.gov. In addition, report your experiences to the Consumer Protection Bureau. Our rogues’ gallery of scams, complaints and consumer problems is online at MyBoatUS.com/consumer/database.aspx.

(c) Copyright BoatU.S. Magazine, May 2006