Birmingham, Liverpool and Bradford top spots for motor fraud

Birmingham, Liverpool and Bradford top the 2011 motor fraud index.

The 2011 motor fraud index, released today by fraud specialist Keoghs, shows that motor fraud is spreading across the country to affect areas that have never previously been considered a risk.

Keoghs also warn that the tough economic climate and improving fraud investigation techniques have resulted in a significant increase in suspicious claims across England and Wales.

The postcode areas that have seen the biggest growth in fraud this year include Newcastle, Peterborough, Preston and Chester, all of which are now rated as fraud blackspots.

Comparison of the latest figures with the first report Keoghs produced in 2009 shows that, while fraudsters are still most active in Birmingham, along the M62 corridor and in London, fraud has now become a significant concern across many smaller towns and cities.

High volumes of suspicious motor claims have been tracked across the Midlands as well as many areas in the North and the South East of England that have been relatively free from fraud in the past.

In London, while fraud has been a problem in central areas for several years, the results show that almost every London borough has now become a high-risk area and that fraud has also spread to the home counties, the majority of which are now classed as moderate risk.

Wales has also seen significant growth in fraud. In 2009, all areas except Cardiff were classed as low-risk – today, both Cardiff and Llandudno are high-risk areas and Swansea and Newport now show a moderate-risk.

James Heath, head of counter-fraud strategy at Keoghs, said: “The latest results paint a bleak picture of the proliferation of motor fraud in England and Wales.

“It is clear from these results that it is no longer restricted to the country’s most heavily built-up areas, and we are now seeing what can reasonably be described as a fraud epidemic, with fraud risks increasing across the board.

“For the insurance industry it is clear that checks now need to be just as thorough for claims coming from less densely populated parts of the country not traditionally associated with fraud as they are for long-established blackspots such as Birmingham, Liverpool and Bradford.”

The overall volume of suspicious claims handled by Keoghs, which investigates suspect claims on behalf of more than two thirds of the UK motor insurance market – has increased significantly in recent years.

James Heath said: “There are two main reasons for the significant increase in both the volume and geographical spread of fraud since we first carried out this study in 2009..

“Firstly, the tough economic climate is continuing to have the effect of driving up the number of people turning to fraud. Insurance fraud has become an organised criminal enterprise in many areas of the country, and high levels of unemployment may be increasing the temptation for people to take part in these scams.

“Also, as counter-fraud processes become more advanced and insurers increasingly pool resources to identify fraudsters, we are beginning to uncover the true extent of the problem.”

“It is also worth noting that this analysis goes some way to contradict the findings of the recent Transport Select Committee that the industry is not doing enough to tackle fraud – while we are constantly learning and developing, our progress in fraud detection and resolution is clear for all to see.”