Fraud crack-down saves £millions in false insurance claims
Tuesday, 16 November 2010
Online car insurer swiftcover.com has uncovered and put a stop to £2.5million worth of attempted motor fraud in the last 12 months, combining this with investigations around false no claims discounts has helped to save its customers approximately £8.2m.
Whilst motor fraud continues to be a major problem for the UK’s insurers, totalling £350 million* annually and pushing up car insurance premiums by an estimated £44*, swiftcover.com is using a mixture of high-tech tools and old-fashioned investigation techniques to crack down on criminals.
In particular swiftcover.com has worked with the police, the IFB (Insurance Fraud Bureau) and other insurance companies to uncover major fraud rings of criminals, sometimes involving hundreds of people, who are staging fraudulent accidents and raking in millions of pounds. Police believe the scammed cash is often used to fund crimes such as drugs and gun-running.
If swiftcover.com suspects a claim is fraudulent, the insurer uses police investigation techniques to track the names of individuals, mobile phone numbers, e-mail and IP addresses, postal addresses and even accident hot spots, building up a web of information. This web often connects the people involved in the suspect claim with previous fraudulent cases, sometimes even linking them to earlier insurance claims that have already been settled.
Robin Reames, swiftcover.com’s claims director, explains: “swiftcover.com is determined to weed out the criminals committing fraud as their actions are hitting honest drivers in the pocket because they end up carrying the cost in higher insurance premiums. swiftcover.com is stepping up its efforts even further to combat fraud and prosecute the perpetrators.
“In the last 12 months we have uncovered cases of attempted fraud that would have cost swiftcover.com £2.5 million in false and exaggerated claims. Some of these are minor cases of individuals trying to break the rules, but the real worry is the massive webs of fraud we have uncovered that have probably cost UK insurers and drivers millions of pounds over the past few years.”
Reames, continued: “Staged accidents, also known as ‘crash for cash’ accidents, can earn fraudsters as much as £30,000 per claim. Usually they target an innocent motorist at a busy road junction or roundabout, slam their brakes on in-front of the unsuspecting driver, causing the innocent driver to crash into the back of them. Usually the occupants will get out complaining of whiplash, triggering a claim for vehicle damage and medical bills.”
swiftcover.com is one of the UK’s most successful insurers when it comes to combating fraud. Robin Reames reveals some of the company’s investigation techniques:
Insurance Fraud CSI – the tricks of the trade:
• The Detectives: Insurance assessors are experts at sniffing out fraud because they have spent years inspecting crash- damaged cars. They can tell whether the damage caused to a vehicle tallies with the reported details of the accident, so if a car has been involved in a low-speed accident but has been virtually written-off, this could indicate a staged accident. Insurance companies will check all the information at their disposal, such as the claims statements and any police or ambulance reports. If something doesn’t ring true, insurers will carry out much deeper investigations.
• Photographic evidence: Garages and repairers regularly take close-up digital photographs of crashed vehicles, showing the damaged areas and the general state of the vehicle, which are then e-mailed to the insurance company handling the claim. Photographs are used by assessors to spot any inconsistencies with the claim, such as the extent of the damage, but also the overall condition and age of the car. Fraudsters will often take a clapped-out or written-off car, do it up to showroom condition to make it look more valuable, then use it in a staged-accident and put in an insurance claim for much more than the vehicle is actually worth.
• Eye in the sky: Google maps and other satellite techniques are used by insurance companies to check out the location and geography of an accident scene. Not only does this help insurers compare the actual crash site with the details and maps provided by the drivers involved, tools like Google maps can also provide an insight into the road layout and possible driving conditions, such as traffic calming measures, road markings, speed restrictions and blind spots.
• Profiling: If an insurer believes a claim could be fraudulent, they will start to build up a profile of the people, vehicles and even the circumstances of the accident – this will probably include any passengers in addition to the drivers. A lot of motor insurance fraud is organised and insurers share information with each other, the police and through the IFB (Insurance Fraud Bureau) to identify patterns that can reveal a fraud and often link different accidents together.
Top five tips for when you have an accident to avoid fraudulent claims:
1. Get as much information as possible, especially the full names, addresses and contact number of the driver; plus contact details for any witnesses
2. If you can and it is safe to do so, take photographs of the cars – particularly the damaged areas – drivers, passengers and accident situation from every angle. Even if it’s with your mobile
3. ‘Ghost’ passengers are used to bump up claims so check the number of people in other vehicles
4. If the other parties become threatening or abusive, then call the police straightaway
5. Make sure you call your insurer as soon as possible to tell them of your concerns
Five Most Common Motor Frauds
According to swiftcover.com, the most frequent types of attempted fraud are:
1. Crash for Cash: Where a driver causes an accident, usually by stopping suddenly and violently in front of an innocent motorist, and then claims for damage repairs and injury compensation, often in cohorts with a claims management company set-up purely to commit such fraud.
2. Staged-accidents: Policyholders stage an accident so they can claim on their insurance, usually hoping to get paid out for a completely written-off vehicle. Usually the accident victims are ‘strangers’ who actually know each other, whilst a third party ‘fixer’ is often involved, staging the accident on the policyholders’ behalf in return for a slice of the insurance money.
3. Phantom passengers: After a car accident, people who were never actually in the vehicle at the time will make a claim for injuries the say they suffered. Sometimes these are opportunistic claims following real accidents, but often they are part and parcel of a crash for cash.
4. Soft-tissues injuries: The number of claims for soft-tissue injuries such as whiplash or back ache following an accident is on the rise. It is virtually impossible to disprove such an injury, whilst a number of claims firms and injury lawyers are actively – and often illegally – pursuing people involved in accidents in an attempt to get them to make an injury claim, with the company taking a cut of any pay-out.
5. Born again write-offs: A driver will make a claim for damage caused to an expensive vehicle; however the vehicle is actually a write-off bought from a scrap-yard, done-up and put back on the road purely for the purpose of being the subject of an accident claim, usually in a staged accident scenario. The previously written-off vehicle is actually worth a lot less than is being claimed. Most written-off cars have to be registered as such with the DVLA, but fraudsters circumvent the rules to put the cars back on the road illegally.
*Figures from the Insurance Fraud Bureau
Notes to Editors
For press enquiries please contact:
Sean Williams or Joshua Van Raalte
Brazil (PR agency for swiftcover.com)
01865 556 000
swiftcover.com was born out of a desire to revolutionise the general insurance market by making insurance quick and easy to use.
swiftcover.com offers car and home insurance. As an online only brand, they save on overheads which allows any cost savings to go straight back to customers through value for money insurance cover. swiftcover.com's revolutionary approach to the insurance market has resulted in some prestigious awards, including the lovemoney.com award for 'Best Value for Money Car Insurer' which was won in 2012.
This powerful operating model combined with successful marketing and competitive pricing has proven to be a tremendous success.
swiftcover.com is a trading name of AXA Insurance UK Plc which forms part of the AXA Group.
AXA UK is a part of the AXA Group. AXA is a world leader in financial protection. AXA’s operations are diverse with major operations in Western Europe, North America and the Asia/Pacific area. AXA employs 120,000 staff and tied agents and, as of June 30 2006, had €1,091 billion in assets under management. AXA reported total IFRS revenues of €72 billion and IFRS underlying earnings of €3,258 million for the full year 2005. Our previous company performance is not a guide to how we may perform in the future.
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