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Finally getting tough on fake cash for crash claims
Finally getting tough on fake cash for crash claims
In recent years, so called ‘cash for crash’ schemes have been on the rise, costing the insurance industry millions of pounds, pushing premiums up, and placing other road users at risk.
Now, insurers are attempting to combat the problem by contributing a total of £9m towards a new police unit whose role it will be to crack down on insurance fraud.
The specialist anti-fraud unit will be run by the City of London Police, and will focus on prosecuting those who orchestrate insurance fraud scams, as well as preventing cash for crash and other scams.
How do cash for crash scams work?
Cash for crash is a relatively recent phenomenon which has grown rapidly throughout the UK. It is often a highly organised criminal activity, orchestrated by gangs and bogus insurance claim companies. It involves the deliberate staging of minor car accidents in order to profit from a clam.
Often, drivers who are part of the scam will brake suddenly on a roundabout, forcing the following car to run into the back of their vehicle. They can then make a claim on the other driver’s insurance for injuries, such as whiplash, and damage suffered to their vehicle, because the following driver is almost always deemed to be at fault in such cases.
Tackling insurance claim fraud
The aim of the new anti-fraud unit will be to drastically reduce the number of these kinds of scams, and will target those behind large-scale cash for crash scams, and those who facilitate them, such as medical professionals who are paid to make false whiplash diagnoses.
The unit will begin its work in 2012, and will run for three years to begin with. If it is successful, it could lead to a reduction in insurance premiums, which have been steadily climbing, partially due to fraudulent claims.
Meanwhile, the Association of British Insurers has announced that it will set up an ‘Insurance Fraud Register’. The register will help insurers to identify motorists who have previously been found making fraudulent claims.
Nicholas Jervis, Managing Director of claims experts1stClaims, is delighted to see that at last something proactive is being done to address this issue. “Hopefully the introduction of these new measures will help to ensure that the interests of honest motorists are better protected, and bring those who attempt to cheat the system to justice. Crash for cash is a growing problem, and this is a positive step towards tackling it.”
An endemic problem
Last year, staged accidents were reported to be at record levels. In 2009, the Insurance Fraud Bureau estimated that there were 30,000 staged accidents on the UK’s roads. The problem has become a serious one, which has resulted in substantial increases to car insurance premiums.
In April of this year, three members of a gang responsible for cash for crash in Luton were jailed. It was estimated that the scam pulled in over £5m. Thirty three other defendants had previously pleaded guilty for their roles in the scam, which was the subject of a police probe lasting five years. At the time, Andrew Richer, Bedfordshire Police’s Assistant Chief Constable, said, “In 2006 Luton was a known hot spot for [cash for crash scams], but in 2011 that is no longer the case.”
The police and insurance companies will no doubt be hoping that this kind of success will be replicated by the new anti-fraud unit.
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