As members of the public wise up to the tactics of insurance fraudsters inducing rear-end shunt scenarios, more suspect claims are being identified. But this is prompting organised rings to take on larger targets at higher stakes. Cath Williams investigates an increasingly dangerous trend
Everyone in the motor fraud investigation arena will be familiar with the term 'crash for cash' - deliberate heavy braking to induce the rear-end shunt scenario, which is then followed by a variety of suspect heads of claim. Over the past five years this has grown to be a prolific modus operandi for the more organised fraudster, in association with their referral chains, at a significant cost to the industry and society as a whole.
The Insurance Fraud Bureau has worked hard to raise awareness of these 'slam-on' tactics, generating press and TV media coverage to publicise how the fraud is committed. It advises members of the public about how they can avoid becoming a victim of this type of fraud and what they should do if they find themselves in such an unfortunate situation.
As a result of this publicity, policyholders are far more suspicious of sudden braking type accidents and a gradual increase in people reporting concerns to their insurers has been seen as a result. Private motorists and small commercial fleet drivers are now more likely to suspect that they have been set up - if not at first notification of the claim, then certainly when the letters of claim start streaming in. Over a period of time this has led to an increase in investigation referrals and, ultimately, the fraudster's cash flow drying up. Obviously this is a positive development - but it only forces the fraudsters to re-think their tactics and create yet another area of concern for everyone involved in the claims handling and investigation chain.
Change of tact
Over the past three years, a subtle change has been seen in the crash-for-cash perpetrators' method of operating. They have moved on from the personal lines, family-type saloon cars and singled out the 'white van man'. But a more lucrative and dangerous target has now emerged - the focus being on large companies that run self-insured fleets, including tankers, heavy goods vehicles and foreign fleets.
The way these latest scams operate is broadly the same. The target vehicle is identified and the erratic driving of the third-party vehicle leads up to the collision, with or without the presence of a second and sometimes third accomplice vehicle, then creates the sudden braking incident. His or her partners in crime then drive off into the distance, unidentified and never to be seen again.
Once the collision has occurred, the fraudster's mission is accomplished. Damage is more likely to be significant when you are hit by a large vehicle and true total loss can be achieved without the assistance of a lump hammer. In respect of personal injury, the low-speed impact argument of course loses its effectiveness when hit by an HGV vehicle.
The risks are undoubtedly higher for the fraudster - failing to judge the 'slam-on' incident accurately could cause a more significant collision than planned; the chance of involving other vehicles unintentionally is heightened; and detailed police involvement over and above the cursory exchange of name, address and insurance details could result. However, fraudsters are now introducing their own risk management tactics into the process. Recent investigations have revealed that the perpetrators tend to place spare tyres and other impact absorbing materials in the rear of the third-party vehicle. It is also interesting to note an emerging trend whereby third-party passengers have been found to be lying down across the rear seat of the third- party vehicle, thereby minimising the risk of genuine injury.
Where foreign fleet vehicles have been involved, there are increasing instances of the insured driver having a very poor command of english and knowledge of UK accident procedures. Consequently, the driver has been actively dissuaded from seeking the involvement of the police, even where third-party injuries are alleged at the scene.
There is little doubt among those who see these claims on a daily basis that the fraudsters have become more confident and imaginative in the application of their craft. What is of significant concern, over and above the questions raised as to whether the proceeds fund other more sinister areas of criminality, is just how desperate will these fraudsters get. Are we about to see an increase in such incidents, as experienced in the US, involving large goods and transport vehicles, where deaths have occurred as a result of a deliberate, but ill-judged, slam-on incident?
We only need to look to various stories within the US press going back to the 1990s to identify strong similarities in what we are beginning to see now in the UK. Several cases of sudden braking by vehicles packed full with immigrants, in front of fully-laden large goods vehicles, have resulted in fatalities and serious injury - not only to the fraudsters but, in some instances, totally innocent motorists. These are not isolated and opportunist incidents but crimes that are planned and intentional.
Self-insured fleets need to be aware that they are now a very real target for organised fraud rings - the fraudsters have done their homework and know how self-insured policies work, along with levels of liability and, more importantly, the lesser level of fraud awareness within those companies' claims handling offices.
Cath Williams is complex motor manager at Cunningham Lindsey UK.
- Loss-making GRP spent £112.6m on acquisitions over its last financial year
- Hiscox names former claims boss as UK CEO
- Hiscox's James Brady on why cyber knowledge remains a barrier
- Mike Bruce promoted to GRP group managing director
- Top 100 Insurtech: Quarter four update
- Marsh boss joins GRP-backed Marshall Wooldridge
- I work in insurance: Stephanie Horton, River Canal Rescue