IFED ‘cannot afford to take foot off the pedal’ when tackling ghost broking

This year, the City of London Police’s Insurance Fraud Enforcement Department (IFED) is celebrating 10 years of fighting insurance fraud – and what a decade it has been.

Our dedicated team of detectives, financial investigators and support staff have worked tirelessly over the last 10 years to conduct just under 3,000 arrests and voluntary interviews while investigating £350m worth of fraud.

Along the way, we have secured around 600 court convictions, 1,500 judicial outcomes and 300 years of prison time for fraudsters.

This anniversary has led us to not only look back on our achievements over the past decade, but also to recognise the obstacles we overcame during the Covid-19 pandemic.

When I started as a detective constable with the newly established IFED unit in back in 2012, I did not imagine that I would one day be leading our team through the unprecedented challenges thrown up by a global crisis.

Despite significant disruptions to operational activity, there was a 51% increase in the number of arrests made by IFED between 2020 and 2021. IFED’s arrests in this reporting period also show a 247% increase compared to 2019.

These figures are testament to our resilience and ability to adapt to a changing criminal landscape, which grew increasingly important as fraudsters looked for ways to exploit the pandemic.

Online fraud focus

As opportunities to commit ‘crash for cash’ and ‘slip and trip’ fraud became more limited during the national lockdowns, we found that many criminals turned their attentions online to defraud both the public and insurance companies.

Ghost broking, for example, continued to dominate the unit’s top threats in 2021, with fraudsters using social media to advertise their illicit services. At the end of 2021, this type of fraud accounted for 19% of IFED’s live investigations.

We noticed the need to tackle this problem at its root early in the year, leading to the appointment of an online disruptions officer. The intention behind this role is to make life difficult for fraudsters by cutting off the resources they need to operate.

Over the course of 2021, around 200 entities – including websites, social media pages, email addresses and telephone numbers – were taken down by IFED through collaborative work with social media organisations, not-for-profit company the Insurance Fraud Bureau and the disruptions team at policing unit the National Fraud Intelligence Bureau.

While illegal intermediaries have continued to be a consistent threat, a review of reports to the UK’s national fraud and cyber crime reporting centre Action Fraud last year suggests that the hard work of law enforcement and the industry to tackle this type of crime is finally having a positive impact. There was a significant drop of 22% in the number of ghost broking reports between 2020 and 2021. The total reported losses for this type of fraud also decreased by 18% during this reporting period, from £1,225,000 to £1,000,000.

Although these numbers indicate that we are moving in the right direction, we cannot afford to take our foot off the pedal in preventing and tackling ghost broking.

We will continue to look for alternative means of disrupting this type of fraud, including extending the use of the ‘cease and desist’ method to halt criminals before further damage is done.

This involves delivering a written notice demanding that the recipient immediately stop an illegal or allegedly illegal activity.

As we look to the year ahead and into a new decade for IFED, we must consider how the fallout from the pandemic will shape the future of insurance fraud.

While the economic effects of Covid-19 remain uncertain, we still need to brace ourselves for an increase in individuals being enticed by insurance fraud to alleviate financial hardships.

The well-used phrase ‘we cannot arrest our way out of fraud’ is more relevant than ever and it is vital that the insurance industry and police take a whole system approach in 2022 to change the common misconception of insurance fraud being a victimless crime.