Criminals switch focus from motor to liability scams

Criminal gangs have started to switch from motor fraud to public and employers’ liability scams, as the industry cracks down on “crash-for-cash”.

Allianz technical divisional claims manager Roy Hebburn said the detection rates of liability scams had risen 50% over the past year.

He attributed this to the success of the Insurance Fraud Bureau (IFB) clampdown on motor fraud.

“There is a strong suspicion that the activity of the IFB around organised motor fraud has caused some of the organised gangs to change their focus to employers’ liability and public liability – the ‘slips and trips’ area,” he said.

In June, Insurance Times revealed an 11% reduction in the number of criminal networks involved in insurance fraud and more than 300 arrests for motor fraud since the IFB’s foundation in 2006.

Hebburn suggested that, as a result of the crackdown, criminal gangs had started carrying out scams in areas where there was less chance

of detection. “It is something we believe the industry should start focusing on,” he said. “The IFB’s focus is on motor. We believe it should extend its remit to public liability as well.”

Allianz fraud manager Mihir Pandya said anecdotal evidence suggested that this type of fraud was rising in areas once known as hotspots for motor fraud, such as the north west of England and north London.

He added that members of gangs were now taking on part-time or contract work to stage accidents in their workplaces.

“Where there have been police raids, there is anecdotal evidence and some documentation to suggest they are starting to looking at slips and trips claims,” Pandya explained.

He added that analysis of databases provided evidence of a link between fraudulent liability claims and previous motor and personal injury claims, and past connections between witnesses and claimants.

Chairman of the IFB John Beadle said the organisation was in discussion with the ABI to ensure wider data sharing so that it could extend its focus to other areas in addition to motor.

But he added that it would be some time before these plans came into force. “We obviously need to look at the cost and benefit argument and carefully look at the proposition before we take a decision.”