Motor insurance fraud is rising 45 percent year-on-year.

Fraudulent crash for cash schemes are increasing according to new statistics from AX.

The vehicle protection and management technology provider cited data from industry body, Cifas, which shows that motor insurance fraud is one of the fastest growing categories of insurance fraud in the country.

The average year-on-year increase across all categories of insurance is 27 percent but when it comes to motor insurance, that figure rises to 45 percent suggesting that the problem is getting worse.

"Criminals will do anything to milk the motor industry and drivers, evolving their tactics to keep people guessing and avoid detection," said AX's director of investigative services Neil Thomas. "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."

Crash for cash schemes, including staged collisions and fabricated ghost collisions, cost the industry around £340 million a year according to the Insurance Fraud Bureau (IFB).

AX car crash study

 

AX's tips to avoid crash for cash schemes

Learn / teach drivers to recognise the warning signs

"To reduce the risk of induced collisions, drivers and fleet managers should learn the warning signs of these schemes.

"For example, it is often possible to identify cars used in traditional slam-on collisions because they have rear-end damage from previous scams, or because the fraudsters have intentionally disabled their brake lights to increase the chances of a collision. Also watch out for erratic driving and passengers looking back as they could be waiting to tell the driver when to slam the brakes on."

Investigate Collisions and claims

"When a collision happens, drivers should gather evidence safely at the scene. Note key facts and where possible identify potential witnesses

"The phrase Road Traffic Collision (RTC) replaced Road Traffic Accident in Policing some time ago, the logic being very few, if any, collisions happen by accident. A good investigator can nearly always identify the reason, whether that is driver error, mechanical failure or fraudulent activity; it is vital that fleet managers have this evidence at hand quickly to prove fraudulent behaviour from the third party. For individuals and fleets that suspect they may have been the victim of a crash-for-cash scheme, report this to the police at the time and to their own Cheatline service.

"Early identification of fraud can save companies significant amounts of money, stop fraudsters committing repeated scams and help authorities bring the criminals to justice."

 

Invest in dashcams, vehicle tracking devices and telematics

"Finally, the use of technology can be instrumental in helping fraud investigators establish how the collision happened.

"Any driver can invest in these technologies, and a fleet manager who suspects they may have been targeted by a staged collision can use telematics data to instantly verify whether the damage happened at the time and location reported by the claimant.

"It is important not to assume telematics is a silver bullet, however. While modern vehicle tracking devices collect a vast amount of information, making sense of this data takes time and expertise.

"For this reason, individuals and fleet managers hoping to stem the tide of fraudulent motor insurance claims and crash-for-cash scams should ensure they also have specialist vehicle crime investigators on their side."