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Crash-for-cash scams costing motorists nearly £400m a yearBack

There has been a significant rise in ‘Crash-for-Cash’ scams in the past few years costing honest motorists a fortune in car insurance premiums.

‘Crash for Cash’ scams are a growing phenomenon across the UK and involve criminal gangs deliberately causing road accidents with innocent motorists as well as faking accidents in order to make false car insurance claims. In fact, the problem has got so bad that it is now costing motorists as much as £400 million a year.

The way that criminals make their money from the car crashes is to submit exaggerated claims for faked or staged accidents which include personal injury, loss of earnings, car hire and damage repair and even claims for passengers that don’t actually exist.

A report issued by the Insurance Fraud Bureau (IFB) has revealed that around forty ‘Crash for Cash’ gangs are currently under investigation across Britain and that each organised scam is worth an average £1.7 million. The report, entitled ‘Crash for Cash – putting the brakes on fraud’ has intimated that one in every seven personal injury claims – a total of 69,500 – is linked to organised crime.

As a direct result of false car insurance claims, every honest car insurance policy holder picks up the collective bill for fraud through their increased premium. In fact, across the UK alone 33 million motorists will have £1.33 added on to their policy as a direct result of ‘Crash for Cash’ scams, which is part of the general £3 billion a year insurance fraud which currently adds an additional £50 per year to individual household premiums.

The report also reveals some worrying statistics on just how many people would consider taking part in a ‘Crash for Cash’ scam for financial gain – as many as 1 in 12 (8 per cent) admitted they would.

The most dangerous faked accident occurs when a criminal is driving in front of a motorist then suddenly slams on his or her brakes, causing the driver to crash into the back of them and become the ‘at fault’ driver. Fake witnesses then emerge from a different car to provide the necessary fake evidence.

Chairman of the Insurance Fraud Bureau (IFB), David Neave said: “Fraudsters don’t just scam the insurance industry they pick the pocket of every honest policyholder whose premiums increase to cover the costs of fraud.

“But in ‘Crash for Cash’, insurance fraud poses even starker risks to society. Fraudsters motivated by greed are gambling with the lives of innocent motorists by deliberately causing crashes up and down the country. Criminal gangs organising multi-million pound ‘Crash for Cash’ scams are also using the profits of their fraud to fund other crimes plaguing our society, including illegal firearms, drug dealing and people trafficking.

“Far from being a victimless crime, insurance fraud is serious and something of which we all need to be wary.”

The report urges members of the public to seek action on ‘Crash for Cash’ crimes and alert the authorities by calling the Cheatline – powered by Crimestoppers – anonymously on 0800 422 0421.

Posted by Leana Kell on 19/02/2013