As many people struggle to keep up with the escalating cost of insurance, more have been falling victim to an ugly problem. They're being duped into buying bogus policies.

State regulators say fraudulent insurance is a growing problem affecting all types of coverage. It is especially acute in the area of health insurance.

The federal government's General Accounting Office reported last year that the number of fake health insurers nearly doubled from 2000 through 2002, when 144 fraudulent operators sold bogus coverage to roughly 200,000 policyholders nationwide. Experts expect the trend to accelerate as more families and businesses scramble for affordable health-care coverage.

"Fake insurance policies appear to be legitimate but are illegal or worthless," said Cindy Fillman. She heads the Pennsylvania Insurance Department's consumer liaison office, which was formed in January to help educate the public about insurance and insurance fraud.

Frequent targets include seniors and small businesses, groups that are especially vulnerable to the enticing pitch of rock-bottom rates and broad coverage.

The department recommends being particularly cautious when buying Medigap and long-term care policies.

In the case of fraudulent Medigap coverage, which seniors buy to cover high deductibles or other expenses not paid by Medicare, victims may find out they have been tricked into buying a policy that essentially duplicates their Medicare coverage, Fillman said.

In the past year, the state insurance department has shut down five entities selling bogus liability insurance to businesses. All were hawking specialty insurance that customers couldn't find elsewhere. One, for instance, was pushing coverage for amusement parks.

To help protect yourself, watch out for the warning signs of a fraudulent offer, including high-pressure sales tactics, cut-rate premiums and coverage with few limitations.

And don't sign anything or pay for anything until confirming that the company is licensed with the state. To do that, call the insurance department's consumer hot line at 1-877-881-6388 or the Pittsburgh regional office at 412-565-5020.

If you're having a problem or suspect you've been snookered, report it to the insurance department.

Your effort will help track and shut down unscrupulous dealers.

The heck with sharing

Have you ever been in line at Giant Eagle and someone asked to borrow your Advantage Card?

You may want to think twice before obliging.

The supermarket chain advises customers against sharing their cards, especially if they have check-cashing privileges, because of the potential for abuse.

There have been "occasional" instances in which customers have used another customer's Advantage Card number to cash bad checks, Giant Eagle spokesman Rob Borella said.

That can create a big headache for the real owner of the card.

If employees follow the right identification procedures for writing checks, no one should be able to use somebody else's card number for verification, Borella said. Unfortunately, employees sometimes slip up.

I was tipped off to the problem by a reader who said someone used her card number to write multiple checks to buy groceries. When the checks bounced, she said Giant Eagle sent her a letter suspending check-writing privileges, demanding that she make good on the checks and threatening to report her to the credit bureaus.

The reader, who didn't want her name used, said she had innocently lent her card to someone next in line at the request of a cashier. That allowed that person to get her card number, since Giant Eagle prints the numbers on customers' receipts. Apparently, that person later used the number to cash checks without actually presenting the card.

The reader said it was a hassle convincing Giant Eagle she didn't bounce the checks. She also had to pay for a notarized letter attesting to her innocence.

One solution would be for Giant Eagle to stop putting card numbers on receipts, or at least omit part of the number like most credit card companies do. Borella said the chain prints the number as a courtesy to make it easier to research customer problems.

So be forewarned.