Don't be a victim of car insurance fraud

As the car pulled up to the round­about, the road ahead was clear. “It was a sunny day and vis­ib­il­ity was excel­lent. I couldn’t see any reason for him not to just drive straight onto the round­about,” said 34-year-old Ben Jones. “But out of nowhere, he slammed on the brakes as I drove up behind him.” Ben was about to become an unwit­ting victim of car insur­ance fraud.

Inev­it­ably, Ben crashed into the back of the car in front. “We both got out of the car to assess the damage, which to me looked like noth­ing more than a dented bumper. The driver of the other car insisted I give him £200 to settle the matter there and then as it was ‘clearly my fault’.

“When I refused, saying I pre­ferred to let our insur­ance com­pan­ies sort things out, he gave me his name and address, which he’d already writ­ten down on a piece of paper. He didn’t seem shaken at all, either, like you would when you’ve just had an acci­dent. It struck me as odd.” 

A month later, Ben got a letter from his insur­ance com­pany. “They had received a claim for more than £16,000 which included the price of call­ing out a tow truck, and whip­lash injur­ies to two pas­sen­gers. But there really wasn’t that amount of damage and I’m sure I didn’t see anyone else in the car.” 

Although Ben had no proof, he was sus­pi­cious enough to men­tion it to his car insur­ance com­pany, who told him he may have become the victim of an increas­ingly common crime.

Crash­ing in

Fig­ures from MORE TH>N's parent com­pany RSA show that there have been well over 22,500 instances of car insur­ance fraud since 1999.

Yet this so-called ‘cash for crash’ crime wave is some­thing of which 41% of Brit­ish drivers aren’t even aware, accord­ing to a YouGov survey quoted on the BBC.

But while you may never have heard of it, your car insur­ance com­pany cer­tainly has.

Fraud­u­lent and inflated claims are estim­ated to cost the industry over £1.5 bil­lion a year, adding 5% to the premi­ums of honest policy hold­ers.

In fact, levels of insur­ance crime have increased to such wor­ry­ing levels that insurers have cre­ated their own Insur­ance Fraud Bureau (IFB) in an attempt to counter the problem. 

Delib­er­ate acci­dents are also a crime that the City of London Police know only too well. The force is cur­rently invest­ig­at­ing four sus­pec­ted car insur­ance fraud cases, each involving more than 70 car acci­dents.

Detect­ive Chief Super­in­tend­ant Steve Wilmott says that crim­in­als “will drive with two or three people in their vehicle and will select a fairly new [target] vehicle with one or two people or maybe a family inside. Then they will delib­er­ately col­lide with it, either by side-swiping it or by brak­ing hard in front of the vehicle, and claim against insur­ance for whip­lash or other injuries.” 

The prac­tice isn’t just fraud­u­lent. “Staged motor acci­dents are also poten­tially extremely dan­ger­ous,” says ex-Metropolitan Police Detect­ive Super­in­tend­ent John Beadle, now IFB chair­man.

“Not only do they cost honest drivers mil­lions of pounds each year but they also put inno­cent motor­ists in danger.” 

He believes there are some tell­tale signs that show when you may have been involved in a fraud­u­lent col­li­sion. “Motor­ists should pay extra atten­tion to people brak­ing sud­denly in front of them for no reason, or oth­er­wise driv­ing errat­ic­ally.” Other warn­ing signs include the car you crashed into fol­low­ing you before the acci­dent, fic­ti­tious pas­sen­gers, and bogus wit­nesses, mech­an­ics or doc­tors used to back up the claim.

Method actors

Car insur­ance fraud, also known as ‘auto fraud‘, is believed to ori­gin­ate in the US where meth­ods have become increas­ingly soph­ist­ic­ated, often involving more than one par­ti­cipant. There, organ­ised crime rings are said to be behind a large number of the incidents. 

Where the US leads, the UK often fol­lows, but you can keep one step ahead of the crim­in­als by look­ing out for the fol­low­ing three tech­niques that are cur­rently being used in the States.

1. The ’swoop and squat’

This is a soph­ist­ic­ated ver­sion of a clas­sic rear-end col­li­sion that is harder to detect than when a car just slams on their brakes in front of you. The scam involves three cars – yours plus two driven by fraud­sters.

First, the ’swoop’ car inten­tion­ally pulls ahead of the ’squat’ vehicle and cuts it off, caus­ing the driver of the squat car to slam on his brakes. Fol­low­ing behind the two, you may well be unable to react in time, mean­ing you’ll drive straight into the back of the squat car.

Of course the swoop vehicle has plenty of time to drive off before you’ve even had a chance to take a look at their number plate.

If you’re not aware of this tech­nique, you’ll prob­ably inno­cently tell the police that the swoop vehicle caused the acci­dent. But because this car is never to be seen again, it’ll be your car insur­ance com­pany that has to pay out. Bye bye, no-claims bonus!

2. The panic stop

The fraud­ster crams a car (nor­mally an old banger) with as many pas­sen­gers as pos­sible, then drives around look­ing for a suit­able target. When the victim has been found, the fraud­sters drive in front of them while one pas­sen­ger keeps watch out of the back window.

The pas­sen­ger stud­ies the victim, look­ing for any signs of dis­trac­tion, such as fid­dling with the stereo, or oth­er­wise taking their eyes off the road for a second. As soon as that hap­pens, the pas­sen­ger sig­nals to the driver who slams on the brakes, caus­ing an accident.

3. The ‘help­ful’ driver

This scheme hap­pens when you’re trying to merge into another lane of traffic. The fraud­ster will motion you to come in, then speed up so you col­lide with them, later deny­ing all know­ledge of their earlier signalling.

Evas­ive action

So what can you do to avoid being taken for a ride? One of the best ways is to keep an eye on how you’re driv­ing.

Main­tain­ing a good dis­tance between you and the car in front isn’t just safe driv­ing; it should also min­im­ise your chances of fall­ing victim to a scam. Other good tips include:

  • Get­ting a good look at the driver and any passengers
  • Taking photos of any damage – not just to your car – with your mobile phone or digital camera
  • Call­ing the police if someone claims to be injured
  • Being wary of anyone who seems too quick to offer their ser­vices as a wit­ness – they could be in on the scam.
  • Call­ing the con­fid­en­tial IFB cheat­line on 0800 328 2550.

Originally published on 23/12/2011

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