New research from Cifas, the UK’s largest cross-sector fraud organisation, suggests that vehicle fraud is one of the fastest growing forms of insurance fraud in the UK. Over the last year there was a 27% increase across all categories of insurance fraud, with a 45% rise in fraudulent car collision claims, which means drivers are now far more likely to become a victim of this crime.
The Insurance Fraud Bureau (IFB) states that these crash for cash schemes cost the insurance industry around £340 million per year, as each victim suffers damage to property as well as the potential for stress and physical injury.
Vehicle protection and management technology provider, AX, want to shed more light on these schemes and educate drivers to increase awareness of the risks.
Director of Investigative Services at AX, Neil Thomas, said: ‘Criminals will do anything to milk the motor industry and drivers, evolving their tactics to keep people guessing and avoid detection. We can’t completely stamp out their activities, but we can collectively do more to curtail what is a real and growing danger to drivers. Recent experience has shown how some criminals have used the COVID-19 pandemic lockdown to plan motor insurance frauds, and they are now intent on cashing in at the expense of innocent motorists.’
What are the different kinds of motoring insurance fraud schemes?
Induced collisions
An induced collision is when someone drives in an erratic or manipulative way near innocent motorists, hoping to engineer what looks like a genuine accident. One of the most common techniques used by the perpetrators is braking hard to cause a rear-end collision. However, there are various other techniques they deploy, including dazzling other drivers using full-beam headlights or even hiding in a driver’s blind spot before pulling in front of them.
Ghost collisions
Ghost collisions don’t actually involve a real crash. They exist purely on paper and involve fraudsters submitting false claims with the expectation that they will not be properly investigated.
Staged collisions
A staged collision is when criminals fabricate the evidence to make it look like a car has been involved in an accident in order to claim back money. This might involve taking a sledge hammer to a parked car to make it look like it has crashed or even just deliberately driving into another car in order to generate the evidence to make a claim.
Be aware that some fraudsters know drivers may try to remove insurance companies in the claim and simply try to bargain for cash at the side of the road.
What can drivers do keep safe?
Learn the warning signs
Forced crashes can be avoided by learning the warning signs. Look out for any erratic driving behaviour on the road, and keep your distance. If cars look like they are already damaged, they may have been involved in similar crashes. Some cars may have had their brake lights disabled in order to hide the signs of slowing down, so try to be vigilant at all times.
Gather information about your accident
While being involved in an accident can be stressful, it’s important to gather as many key facts as possible as long as it is safe to do so. If there are any witnesses, be sure to get their contact details. If you do suspect you have been the victim of a deliberate crash, it’s important to tell your insurance company and the police as early as possible so they can begin the investigation.
Use technology
Dash cams are increasingly fitted as standard to many cars, but even if you don’t have a fitted one, they can be purchased relatively cheaply. They work by recording footage of the road ahead on your journey. This footage can be used as vital evidence for fraud investigators and could help determine the true cause of the accident.
Similarly, for fleet drivers who suspect a targeted collision, telematics data can be useful in determining both the time and the location of an accident.