Insurance Fraud Enforcement Department investigating several other cases

An insurer-funded anti-fraud police unit has launched today and has already made its first arrest.

The Insurance Fraud Enforcement Department (IFED) made the arrest after an insurer reported a suspected fraudulent claim of £35,000 for an allegedly stolen BMW in Leamington Spa. The unit arrested the policyholder today on suspicion of fraud by false representation.

The unit aims to crack down on organised crime in motor, pet and public and employers’ liability. It also wants to crack down on ‘ghost’ brokers and the middle-class professionals that are being lured into organised crime.

The unit also wants to ramp up the police response to fraud across the UK and change the perception that insurance fraud is acceptable.

The unit will be run by the City of London Police and is funded by the ABI. It will cost ABI members £9m over the next three years, but aims to save the industry £90m over the same period.

The IFED was set up after insurers became concerned that government policing cuts would lead to less resources for fighting fraud.

It is staffed by 34 detectives and support staff and headed by City of London Police detective chief inspector David Wood. The unit can tackle around 100 cases at a time.

Police will work closely with the National Fraud Intelligence Bureau and the Insurance Fraud Bureau.

Opening its doors today, the Insurance Fraud Enforcement Department (IFED) will combat a criminal threat estimated to be costing the UK economy £3bn per year – adding on average £50 to each insurance policy.

It will act on evidence of motor insurance, commercial and public liability fraud and illegal insurance advisers.

City of London Police Commander Ian Dyson said: “IFED is here to turn the tide against all those who break the law, dismantling far-reaching criminal networks and changing a culture that says it is okay to submit bogus insurance claims. There is much to be done and there is not a moment to lose.”  

ABI director of general insurance Nick Starling said: “Insurers are determined to protect honest customers by reducing insurance fraud. This police unit is an important initiative as insurers intensify their crackdown on insurance fraudsters.

“The message could not be clearer: now more than ever anyone making a dishonest insurance claim is not only more likely to get caught, but risks getting a criminal record and certainly more expensive and harder to obtain insurance and other financial products in the future.”