The rising prominence of moped crash for cash fraud

Staged accidents, colloquially known as crash for cash fraud – wherein criminals will deliberately cause a road traffic collision to fraudulently claim compensation from the insurance industry – is nothing new.

On its fraud advice page, the ABI notes that this fraud can take three forms – when fraudsters crash their own vehicles into each other, when fraudsters submit completely fabricated claims and when fraudsters target innocent motorists by making them the at fault driver.

Back in 2020, the Insurance Fraud Bureau (IFB) estimated that the economic impact of crash for cash fraud was significant, with 10% of personal injury claims linked to this type of scam and cases costing insurers £340m a year.

The most recent permutation of this type of fraud, however, primarily involves fraudsters utilising mopeds to stage crashes with innocent victims.

At last month’s virtual Fraud Charter roundtable (17 September 2024) – hosted by Insurance Times and sponsored by law firm Carpenters Group – counter fraud experts noted the persistent increase in this type of scam.

Simon Smith, director of claims strategy at Carpenters Group, explained: “This has become an emerging news story in 2024, with a concerning number of cases involving van collisions with mopeds that [have] the hallmarks of potential fraud and staged claims.”

Smith was correct to note the emerging nature of this type of scam. In May this year, insurer Allianz published data from its own operations that showed there had been a staggering 6,000% increase in crash for cash incidents between January and December 2023.

Furthermore, in July 2024, personal lines specialist insurer Ageas published the findings of its own data, which also identified the growing prominence of this scam.

Ageas’ statement explained that the specific type of scam it had identified involved vans being targeted by drivers of mopeds, who deliberately manoeuvred into the path of reversing vans to induce an impact.

However, Smith added that the problem was much wider than just van drivers being targeted, even if Ageas’ data identified that aspect of the trend.

He said: “It isn’t just mopeds and vans [involved in crash for cash] – it’s any low cubic centimetres (CC) motorbike. It can be electric cycles and [the victims] can also be people in normal, standard motor vehicles.”

Crime typology

To find out more about how this new permutation of crash for cash was developing, Insurance Times spoke to Marek Coghill, detective inspector and the officer leading the City of London Police’s Insurance Fraud Enforcement Department’s (Ifed) response to it.

He explained that the police force had first taken note of this specific sort of crime around two years ago. After some preliminary investigation, Coghill said that the unit “quickly realised it was a predominately London-based typology”, with the majority of fraudsters stemming “largely from the Brazilian community, or with a Portuguese linguistic predominance”.

At first, Ifed attempted to tackle the problem by going after individual scammers. However, Coghill said that “over the course of 18 months or so, that course of action proved to be very ineffective”.

He explained: “We were often not able to get hold of the scammers because they kept their helmets on, [or] because we weren’t finding out about the insurance fraud from the accident until months later.

”Because of the transient nature of the people committing the offences, [they] were often gone from the country by the time we got our ducks in a row where warrants were concerned.”

As a result, once Coghill took the lead on Ifed’s response, the force began to make an effort to target the enablers of this specific type of crash for cash.

He said: “We quickly identified some themes – that the scammers involved were using particular garages and particular solicitors, [for example] – so we began to focus on dismantling and disrupting the structures behind these scammers.”

As part of Ifed’s investigations, the force now has a typical picture of how scammers become involved in perpetrating crash for cash fraud.

Coghill explained that the scammers will often arrive in the country to work legitimately as delivery drivers. However, because they need access to a moped, organised criminal gangs will offer them one cheaply from an affiliated garage, setting the proviso that the delivery driver must stage a certain number of accidents as part of the deal.

He added: “People are being induced into doing these things in order to make a livelihood in a difficult and challenging economic environment and that’s been exploited by serious criminals.”

Industry collaboration

Coghill added that, despite data showing the prominence of vans being targeted in these moped cases, Ifed was seeing all manner of road users being picked out by scammers.

He said: “What we’ve seen in the last six months has been personal cars, lone drivers, elderly people and both men and women all being targeted – we’re not exactly sure how the scammers choose their targets.

“The cost of this scam is between £20m and £30m a year, just in London alone, and that is something that the industry has to work with us to resolve.”

“This is a typology that can really affect anybody who uses a car – if you’re out there [on the roads], you could be unlucky enough to be part of this, whether in London or the wider UK.

“It’s like a lot of the more generic fraud we see, like investment fraud or phishing. This is the physical manifestation of that type of modern fraud which anybody can become a victim of.”

The strategy of targeting garages affiliated with moped led crash for cash scams has been bearing fruit, with Coghill noting that Ifed intelligence suggested that its messaging was beginning to discourage the commercial garages associated with these scammers from becoming involved.

Ifed has also been using an ongoing partnership with Trading Standards investigators – part of its Operation Fulvous project, incepted in September 2022 – to gain entry to suspected properties, gather evidence and make arrests where necessary.

As those in the counter fraud sector know, fraudsters will always try to remain one step ahead of law enforcement. Indeed, Coghill noted that tackling this crime “is a long game and [it] is not going away immediately”.

However, he noted that closer collaboration with the insurance industry and the IFB specifically could be useful in putting the brakes on some of these criminals’ operations.

He said: “The cost of this scam is between £20m and £30m a year, just in London alone, and that is something that the industry has to work with us to resolve.

“We can’t dictate what their [fraud detection] thresholds are or what their level of case acceptance or qualification of reporting might be, but we can work with [the sector] on that.”