Crash-for-cash Insurance Fraud — [Yvonne Fovargue in the Chair]

Part of the debate – in Westminster Hall am 9:30 am ar 22 Mai 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Elliot Colburn Elliot Colburn Ceidwadwyr, Carshalton and Wallington 9:30, 22 Mai 2024

I beg to move,

That this House
has considered the matter of tackling crash for cash insurance fraud.

It is a pleasure to serve under your chairmanship, Ms Fovargue. So-called crash-for-cash insurance fraud is an issue that many of my constituents have brought to my attention in recent weeks and months. “Crash for cash” refers to incidents in which individuals deliberately stage or cause road traffic collisions for financial gain. The scams often involve making fraudulent insurance claims for injuries or damages that did not actually occur. Often perpetrators exaggerate injuries or falsely claim that additional passengers were involved in a collision, to increase their payouts.

There are three principal types of crash-for-cash scams that I want to talk about: induced accidents, which involve fraudsters targeting an innocent motorist as the driver “at fault”, often by suddenly braking in front of their car to cause a crash; staged accidents, which involve fraudsters crashing their own vehicle or mimicking the damage of a crash by using tools such as sledgehammers; and fabricated accidents, which involve fraudsters submitting false claims for accidents that never occurred. The scams are constantly evolving, presenting numerous variations beyond the principal types.

Crash-for-cash fraudsters often target vulnerable drivers who are in a hurry or are unwilling to cause trouble. I have heard about women in my constituency being particularly targeted for such frauds. The scams harm all law-abiding motorists, increasing unnecessary work for the emergency services and the NHS, and causing innocent victims to lose their no-claims bonus and face rising premiums. The proceeds from the scams may go on to fund other serious organised crime. Not only are such actions deceitful, but they are already illegal, falling under offences in the Fraud Act 2006 and the Road Traffic Act 1988.

To fully explain the scams, I will share a few examples. Katrina is a brave woman who experienced crash-for-cash fraud at first hand in an incident near the Wallington high street last month when she was on her way to pick up her daughter from school. As she waited to turn right, a biker on her right stopped to give way. As the traffic halted, she cautiously pulled out halfway, stopping to ensure that the left side was clear. However, when she turned her head to check, another biker had collided with the front of her car. To her dismay, she noticed that the first biker was laughing, and the biker who had hit her immediately began filming the scene. Shaken and confused, she pulled around the corner to exchange details, but encountered a language barrier and evasive behaviour from the biker.

Despite the minimal damage to her car, something felt off. Trusting her instincts, Katrina reported the incident to her insurance company and the police. Following police advice, she contacted the Insurance Fraud Bureau. Later the same evening, she witnessed a similar incident in Sutton, although at the time she did not connect the two. A couple of days later, she discovered through a Wallington Facebook group that others had experienced identical incidents in the same week within the small area of Carshalton and Wallington. That confirmed her suspicion that it was not an accident, but part of a deliberate scam. Recently, she has received a letter from a law firm requesting a settlement. She intends to fight the claim, as it is appalling that people can exploit such fraudulent schemes, potentially affecting insurance premiums and causing undue stress and injury. I am sure that we wish her all the best.

Katrina’s story underscores the importance of vigilance and the need to report suspicious incidents. Not only are so-called crash-for-cash scams deceitful, but they have real consequences for innocent victims. This bold woman’s decision to share her experience highlights the importance of raising awareness of the issue and the need to do something about it.

Another victim in Wallington was targeted by a moped scammer who intentionally crashed their vehicle and refused to give details. The police did not attend; the victim was left to gather evidence alone. Another incident on London Road in Wallington involved a moped scraping a car and fleeing when a police car approached. The victim’s dashcam only captured the front, making it difficult to prove a scam.

A parent in Sutton faced a similar scam during the school run, causing immense stress, especially with young children in the car. There appears to be a trend of parents, particularly mothers, being targeted during the school run, when roads are busier and people are in much more of a rush. For that couple, it all began when a motorbike deliberately collided with the husband’s car, resulting in minor damage. Although the biker admitted fault at the scene, they then filed a fraudulent insurance claim for a substantial amount of money, causing my constituent significant frustration. It took persistent effort, including escalation to the chairman of Admiral, for the case to garner the attention it deserved.

The same couple were then involved in another incident in Wallington, also involving a moped. Despite the moped driver refusing to provide details, the police initially failed to respond. It was not until the couple posted on the social media site Nextdoor and filed a report that the police began to take action. Thankfully, CCTV was available for the incident, which shed light on the situation. However, even the supposed witnesses turned out to be a part of the scam, leading to a barrage of fraudulent insurance calls. It has been a frustrating ordeal, but the couple have diligently reported all incidents to the authorities and their insurance company and are hoping for a resolution.

The Insurance Fraud Bureau, a not-for-profit organisation established in 2006, focuses on preventing and detecting such organised fraud. It supports the insurance industry and law enforcement by providing intelligence and assisting in investigations. It also attempts to raise public awareness about insurance fraud scams and educate consumers on how to identify and avoid them. In 2023, the IFB managed more than 150 live operations, valued at about £90 million, and referred 52 cases to the police. It received more than 5,000 reports through its CheatLine, with 68% resulting in actionable intelligence. Currently, it has about 6,000 active crash-for-cash investigations, worth more than £70 million. That represents about 30% of all its live operations.

The Insurance Fraud Enforcement Department, which does great work to detect organised fraud, puts research into action. It is a specialised police force established in 2012, funded by the Association of British Insurers and dedicated to tackling insurance fraud. Hosted by the City of London police, the UK’s lead force for economic crime, the IFED operates independently while collaborating closely with insurance companies. Since its inception, it has investigated fraud valued at £360 million, made more than 3,230 arrests and secured more than 2,200 convictions, resulting in nearly 320 years of prison time.