Insurers are calling for more police forces to get involved in the fight against fraudulent motor accidents. Although these often involve innocent drivers, they are staged by criminals who then submit fake insurance claims of up to £50,000 a time.
Figures from the Insurance Fraud Bureau show that there has been an 11 per cent reduction in organised 'crash-for-cash' crime in the past two years, led by a notable reduction in areas where the police have become heavily involved, including Luton, Harrow, north-west London, and Walsall.
But the bureau, set up three years ago to lead the fight against organised fraud, also says that crash-forcash crime is rising in areas where police are not engaging with insurers, such as Liverpool, Halifax and Ilford and Barking in east London.
Richard Davies, the bureau deputy chairman and fraud manager at Axa Insurance, says: 'We targeted some of the biggest gangs first, but new ones are emerging all the time and we can only combat them with the help of police.'
Three main types of accident come under the crash-for-cash label. The most dangerous are induced accidents, where crooks deliberately engineer a crash with an innocent driver. This will typically happen at a roundabout or motorway junction, with the fraudster's car manoeuvring in front of a target vehicle then suddenly braking to trigger a crash.
Staged accidents involve two vehicles both controlled by fraudsters. They set up a collision or damage the cars using hammers and then submit claims.
A third variation is the paper claim. Here the cars never even touch each other, with crooks submitting a claim based around bogus paperwork.
Scott Clayton, claims fraud manager at Zurich Insurance, says: 'As well as multiple passengers, all of whom claim injuries such as whiplash, claims can be inflated by high bills for courtesy cars and repairs. A seemingly minor bump can inflate into a £50,000 bill.'
Fraud adds an estimated £40 to the cost of the average annual motor insurance policy.
Liz Ecroyd was the unwitting victim of an induced accident in October 2006 when her Land Rover Freelander was involved in a smash with two other cars on the A666 near Bolton, Lancashire.
Liz, 53, who lives in nearby Bury, says: 'An old Vauxhall Astra was travelling alongside me then suddenly zoomed ahead and cut across in front of a second black Astra, causing it to stop suddenly. I managed to brake and not hit them, but a third car then hit me and pushed me into the black Astra.'
All drivers exchanged details and nothing seemed suspicious. But Liz, who at the time ran a pub with her partner David Ogden, 44, was later contacted by her insurer, esure, which had doubts about the accident.
Liz says: 'The owner of the black Astra claimed it was written off and that four passengers were injured. I told esure I had seen the car drive away without much damage and that there were only two passengers.'
The insurer linked this incident to several others involving the same person as either a driver or passenger. This included another smash on the A666 just eight days later.
Esure refused to pay. When the other driver tried to uphold his claim in court, Liz appeared as a defence witness. The courts found in favour of the insurer in February 2008, concluding that the accident had been staged.
Liz, now working as a saleswoman for a national cash-and-carry firm, says: 'Fortunately, no one was hurt in my incident, but it's a fine line. I'm so angry that you have these people profiteering out of ordinary motorists.'
The IFB has helped police make more than 300 arrests since it was formed in July 2006, with active operations in areas covered by 13 police forces.
Mihir Pandya, fraud manager at insurer Allianz, says: 'Setting up the IFB has improved collaboration with the police.' It is increasingly targeting professionals, such as corrupt solicitors who work with staged accident gangs.
But fraudsters are constantly evolving their tactics. Recent trends include targeting lorries registered overseas for induced accidents in the hope that claims against overseas insurers will slip through UK antifraud systems.
There are also fears that the recession-could cause an increase in fraudulent motor accidents.
Norwich Union, for example, identified 30 per cent more fraudulent claims last year than in 2007. Davies says: 'I fear we will see more opportunists trying their luck.'
Insurers are urging any driver who is involved in a crash to be alert.
Clayton says: 'Our fight relies on having good evidence and that is where drivers can help us. If you feel it is safe to do so then snap a couple of pictures of the incident on your mobile phone and note as many details as you can of the other vehicle. Also assess how old the other driver was and what they looked like. Note down how many passengers were in the other car and what exactly was damaged.'
If you suspect fraud, call the Insurance Fraud Bureau's confidential cheatline on 0800 328 2550 or visit insurancefraudbureau.org.
