Industry alerted over fraud risk surrounding foreign registered vehicle claims

Law firm DAC Beachcroft is urging the insurance industry to be more watchful for fraud around claims linked to UK accidents involving foreign registered vehicles, as these cases fall outside the Official Injury Claim (OIC) portal.

This is especially true when claims involve heavy goods vehicles (HGVs).

The insurance law firm is working with cross border claims representative InterEurope UK to raise awareness around this fraud risk - the firms have devised a fraud identification strategy on cross border motor claims, seeking to challenge the status quo of these types of claims being concluded quickly with limited fraud investigations.

Dan Prince, counter fraud partner at DAC Beachcroft, said: “Cross border motor claims are often overlooked as many are of modest value, yet they are lucrative for fraudsters because there is a very attractive costs regime available for bringing such claims.

“Insurers are not always aware of their exposure and may not have established the necessary fraud indicators in their processes to identify this fraud. Yet fraud is very much there and won’t be going away.”

Home and dry

In the three years since DAC Beachcroft and InterEurope UK started working together, the partnership has helped conclude over 400 potentially fraudulent UK claims involving foreign registered vehicles, saving European insurers more than £5m in potential compensation.

Acting for more than 40 different insurance companies across Europe, elements of fraud were found in 94% of the cases the businesses have investigated so far.

Of these claims, 40% were rejected in their entirety.

Prince added: “Despite the drop in claims numbers with reduced motor travel across Europe as a result of Brexit and the Covid-19 pandemic, fraud in cross border motor claims has continued.

“Given that these motor claims fall outside the Official Injury Claim portal and once foreign motor travel returns to pre-pandemic levels, we anticipate this area will be targeted by an increasing number of fraudsters.

“There is also a perception that those allegedly injured in an accident with a foreign plated vehicle are ‘home and dry’ in terms of evidence to support the case, partly because in certain circumstances the defendant driver has returned to mainland Europe and partly because there is an assumption that the driver would automatically be to blame due to inexperience with UK rules of the road.”

Altered perception

As part of their partnership, DAC Beachcroft and InterEurope UK have built a bespoke intelligence database.

The pair have also developed ’Know Your Opponent’ strategies and connected with various law enforcement agencies in order to better detect fraud and apply robust legal tactics to reject fake claims.

Anthony Madden, InterEurope UK’s managing director, added: “Cross border motor claims are a complex area involving many challenges which differentiate them from standard domestic motor claims, with foreign vehicles often being deliberately targeted by UK fraudsters.

“Working with DAC Beachcroft, we have altered the perception that cross border motor claims must be settled and not challenged. This partnership has benefited many European insurers [that] all take security from the service provided.”