HELP your drivers avoid the insurance scam gangs that are costing up to £1.5 billion each year.
Reports of criminal gangs deliberately getting involved in crunches in order to claim insurance money from innocent motorists are becoming more common.
The phenomenon seems to be spreading at an alarming rate, with fleets being singled out by the fraudsters, as our front-page investigation in last week’s issue found.
Just how much bogus and inflated claims cost the UK is unclear – Norwich Union says around £200 million, while Royal & SunAlliance estimates £1.5 billion. It is adding up to 5% to the premiums paid by policyholders.
‘The frequency of staged accidents is significantly on the increase and for the commercial market it’s doubling year on year, based on the last two years,’ said a spokesman for Norwich Union insurance’s fraud investigation team.
‘The trend is towards the fraudsters targeting predominantly larger commercial motor fleets, those that have marked vehicles – they see it as a victimless crime, affecting an organisation rather than a person. It’s worrying.’
Dermot Coughlan, fleet manager for Kelly Communications, said: ‘Staged accidents do seem to be on the up. We had a case where one of our guys hit another car in the back, but didn’t do an awful lot of damage. The other driver came back later with a lot more damage, having backed it into a wall.
‘That kind of fraud is blatantly obvious, but not all are that easy to identify.’
According to Royal & SunAlliance, 41% of British drivers have never heard of staged accidents and remain unaware of the risks.
R&SA says that since 1999, there have been more than 22,500 fraudulent staged accidents, and its research says that only around half of British drivers would know what to do if they suspect they have been involved in an intentional collision.
Staged accidents are usually carefully planned to target innocent motorists in such a way as to be able to claim on their insurance.
The fraudsters often increase the amount they claim for in various ways, such as by adding injuries to non-existent or phantom passengers to the claim.
They may also use third parties in their claim to make it look genuine. Independent witnesses can be useful, but be wary of any quick to offer their services as they may be part of the scam.
Bill Pownall, motor risk manager for Norwich Union, says: ‘Gang members either purchase and insure low value vehicles, or hire vehicles, and then effectively force innocent members of the public to crash into them.
‘The fraudsters rely on the innocent driver’s insurer accepting liability and then multiple false claims are submitted for injuries to the driver and additional, fictitious passengers.’
Pownall says there is big money at stake – the average insurance bill per induced accident is £25,000 to £30,000.
John Beadle is R&SA’s counter-fraud manager and a former detective superintendent with the Metropolitan Police. He is also chairman of the Insurance Fraud Bureau (IFB), an organisation launched in July last year by insurers to clamp down on and expose organised insurance fraud.
He said: ‘These accidents cost honest drivers millions of pounds each year and also put innocent motorists in danger.’
Signs that a staged accident could be about to take place include the occupants in the vehicle in front looking out of the rear window and gesturing to their driver seconds before the vehicle stops dead or a vehicle circling a roundabout several times looking for a suitable vehicle.
Motorists who suspect they may have been involved in a staged or deliberate accident should not say anything other than ‘it is a matter for our insurance companies’.
They should also take as many pictures as possible of the driver, passengers, vehicle and any damage suffered.
Reducing the risks
Common ways in which criminals induce crashes:
THE fraudster disconnects a vehicle’s brake lights and drives around busy roundabouts or slip roads looking for potential victims. He then drives in front of the target and brakes sharply. Sometimes, an accomplice in another vehicle will distract the victim by using the horn or flashing headlamps.
THE fraudster stops at a busy roundabout and waits for a potential victim to pull in behind. He then pulls quickly on to the roundabout, but stops 8-10ft over the line. The potential victim’s attention is focused on traffic emerging from the right, and is therefore unaware of the stationary vehicle in front of them, making a collision inevitable.
A VEHICLE in front slams on the brakes when a third vehicle overtakes it at speed and cuts in for no obvious reason.
The overtaking vehicle may well be part of an organised ‘tag team’, colluding to provide a credible ‘cover story’ as to why the vehicle in front was forced to brake.