Briefing: Staged e-scooter accidents are ‘already happening’ and leading to ‘questionable’ claims

By Editor Katie Scott

As some predicted Covid-19 fraud trends fail to come to fruition, such as homeworking-linked employers’ liability claims, the insurance industry’s senior fraud professionals have instead homed in on what they view as the next emerging fraud threat – insurtech, and in particular e-scooters.

Discussed at this month’s Fraud Charter roundtable, held at The Groucho Club by Insurance Times and Carpenters Group, Paul Holmes, partner at law firm DWF, flagged the increasing propensity for staged e-scooter accidents and associated personal injury (PI) claims.

“Fraudsters are very good at moving into new areas,” he commented.

This trend was confirmed by the Motor Insurers’ Bureau’s anti-fraud claims integrity controller John Reynolds, who said staged e-scooter accidents were “already happening”.

He added: “We’re looking at questionable PI claims on e-scooters.”

Laura Horrocks, director and head of fraud technology and intelligence at Sedgwick, agreed that crash for cash scams were moving further into micromobility. She said: “E-scooters will replace moped activity because it will be very easy to get an injury, [for example,] a broken wrist.”

Fraud around these types of accidents may also be tricky to distinguish due to the general lack of care that seems to be taken when individuals hire and drive an e-scooter that is part of the UK government’s trial.

In my hometown of Basildon, for instance, I’ve seen a number of occasions where multiple people are loaded onto one e-scooter, ducking and weaving between the pavement and the road, swerving and careering with little care or thought for other road users or pedestrians. How many of these cases are fraudsters on the hunt for a collision, or genuine users attempting to get to grips with a new vehicle type?

Sarah Glenn, commercial director at RGI Solutions, has seen similar examples in her neck of the woods too – she told Fraud Charter attendees about an e-scooter user she had spotted on route to a cleaning job, balancing a vacuum cleaner from the handlebars amid other buckets and cleaning tools.

With unsafe e-scooter driving being more common than safe e-scooter driving, based on the anecdotal conversations I’ve had with insurance industry participants, it certainly creates a fertile landscape for fraudsters to exploit – especially as the Ministry of Justice (MoJ) still remains tight-lipped on what the possible insurance requirements for e-scooters will be.

David Parkin, the MoJ’s deputy director for civil justice and law, had no update for Fraud Charter attendees here.

Gaps for fraud

For Faye Fishlock, head of defendant insurance services at Carpenters Group, there are a number of other areas where fraudsters could benefit from the rise in e-scooters.

Gaining access to e-scooters, for example, is often achieved via an app. Fishlock told Fraud Charter guests of a situation she had heard of where two teenagers had been able to rent an e-scooter using a selfie photo of their mum.

Although the e-scooter company involved would undoubtedly have made changes to nip this kind of activity in the bud, it does raise a warning flag of a potential grey area around identity theft that fraudsters may seek to exploit moving forward.

In addition, Fishlock has seen “certain claims where we’ve had e-scooters, miraculously Harry Potter-like, levitate on pavements and result on car bonnets, which are then scratched”.

As a group, Fraud Charter attendees were also massively concerned about the drunk and drug driving of e-scooters, as well as worried about Brits’ overall awareness, or distinct lack of it, of the difference between private and public e-scooters – and, therefore, the different legal ramifications.

Fishlock urged that public policy around private e-scooters must be developed using learnings “from the trial schemes and the things that we’ve found out, to make sure that we plug those gaps before they become gaps”.

One attendee even noted that e-unicycles are now being advertised at London train stations too – surely this is a whole new risk profile in itself?

For Fishlock, the main issue arising from the work around e-scooters is the partnership between insurtech firms and insurers when it comes to covering micromobility.

“We’re not always the best industry at data sharing, so there is a gap there for fraudsters,” she explained.

“As our Covid-19 [insurance fraud] agenda might drop off, our insurtech hat might come on.”

As the UK continues to transition to net zero carbon emissions and electric vehicles grow to take over the roads, we have to acknowledge that e-scooters are here to stay – no matter how hated they appear to be by market participants.

Therefore, identifying these kinds of fraud trends early will surely help in smoothing out any future broader roll out of micromobility vehicles, tightening any loopholes that fraudsters may have their eye on.

At the end of the day, however, it’s time the government actually set out what the insurance requirements for e-scooters are, to act as a safety net against the appalling e-scooter driving most of us seem to be observing right now.