Following on from the recent drive by both insurance companies and the legal profession to put an end to schemes looking to obtain cash for crashes, several successful prosecutions have been pursued. It is estimated that this particular scam has cost insurance companies approximately £5.3 million and has also resulted in driver premiums being increased to an untenable level. As a result, the industry as a whole, as well as the legal profession has pulled together, in order to bring an end to these types of scams.
One of the largest cases of this type of scam has been identified as a scam involving 35 individuals, in the Luton area, all of whom have now been convicted of fraudulent behaviour. During the case, it was revealed that these individuals staged several hundred car accidents and then made claims to insurance companies for the crashes, totalling approximately £5.3 million. The scam itself went on for around three years before insurance companies began to become suspicious and looked at the claims, in more details, finding a pattern that linked these individuals together.
Several different approaches were taken by individuals, when staging the crashes. However, on the whole, they involved an innocent third party, where the car would suddenly stop and the driver of the innocent vehicle would go to the rear of the scammers’ car, resulting in a claim for various medical injuries.
A Wider Problem
It has also been argued by the insurance companies that whilst this is one of the largest scams of all time, this is, in fact, a nationwide problem and insurance companies should become more vigilant, when it comes to identifying fraudulent claims of this nature. It is also argued that, when third parties are involved, this can have a serious knock-on effect on their mental health as it very distressing. The judge in the Luton case stated: “Also, in terms of the induced accidents the innocent third parties may find it a traumatic incident. It is a thoroughly dishonest crime created purely for greed”.
Calculations are made based on this one ring of scammers, suggesting that insurance policies for everyone in Britain have gone up by approximately £44 purely due to this one group, showing just how detrimental this type of activity can be to everyone, and not just for those individuals who are directly involved.
This insurance scam also operated through the use of an accident management company called Swift Accident and it has been revealed that this was used as a vehicle for the dishonesty, with every single claim being made by Swift Accident proving to have an element of dishonesty about it. This company has since been closed and all key individuals now face prosecution. It was also shown that specific vehicle assessors were commonly used and medical individuals were also thought to be involved.
Car insurance fraud is thought to be particularly prevalent in the recent economic climate, due to the fact that individuals are looking for all opportunities to raise their own personal finance, while insurance companies are bringing in their own policies and procedures, in order to ensure that they do not fall foul of this type of activity, in the future.