Whiplash Style Motor Insurance Fraud Is Rising Again

According to the latest analysis published 7th July by the ABI (Association of British Insurers) it shows that since a focus on stamping out staged motor accidents the number and cost of fraud insurance claims  have gone down in 2016.

There has however been a small rise in spur of the moment, whiplash style motor insurance fraud, compared to the highly sophisticated criminal gangs.

ABI figures show that in 2016:

  • Insurers detected 125,000 dishonest insurance claims valued at £1.3 billion. The number was down 5% on 2015, while their value fell 3%.
  • The level of organised fraud fell by around 30% on 2015, with 15,000 frauds valued at £174 million detected. This fall reflects the work of the Insurance Fraud Bureau (IFB) and the Insurance Fraud Enforcement Department (IFED), the specialist police investigation unit, in exposing crash for cash staged motor accidents, and other organised frauds, such as criminals offering fake motor insurance. It is also believed that fraudsters are moving into new areas such as bogus liability claims.

An example of organised insurance scam shows  ‘four members of a criminal crash for cash gang were sentenced to over 37 years for their part in a staged accident that resulted in the death of a passenger in the vehicle they targeted.’

Cash for crash

Another example, this one a more unusual style fraud scam shows ‘Sticky fingers musician can’t get no satisfaction. A fraudster who claimed £35,000 over three years on a sickness policy for depression and anxiety that he claimed left him housebound was caught out singing with a tribute band, Sticky Fingers.’

James Dalton, ABI’s Director of General Insurance Policy, said:

 “The vast majority of insurance claims are genuine, with millions being paid to customers every day. The industry does everything it can to keep premiums down and tackling fraud, which drives up prices for honest customers, is at the heart of that. So it’s great to see we have achieved real success in tackling organised fraud in the last year.

 “Opportunistic fraud has shown a small rise as people continue to be pestered by disreputable claims management firms that are helping fuel the compensation culture. This makes it imperative that the Government tightens regulation of claims management companies, and presses ahead with its further reforms on whiplash, so we are pleased to see this much-needed reform in the Queen’s Speech.”



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