Insurers face ‘huge battle’ against increasingly sophisticated fraudsters, says law firm
Birmingham is the UK’s top spot for cash-for-crash scams, the latest figures show.
The motor fraud index from law firm Keoghs puts Manchester in second place, closely followed by East London, Liverpool and Bradford.
Keoghs highlights cash for crash as the biggest fraud-related threat to insurers. The scam typically involves a car braking unexpectedly at a junction, causing the following vehicle to crash into it.
Claims are then filed – often for thousands of pounds – for damage to the car and injuries to the driver and passengers.
Keoghs’ head of counter fraud strategy James Heath says insurers are facing a huge battle against increasingly sophisticated fraudsters.
He said: “The insurance industry is improving fraud detection processes all the time with new scams uncovered every day. These include acts of organised fraud by criminal gangs that involve substantial numbers of suspicious claimants.
“The recent economic environment has also had a direct impact on the number of suspect claims being presented and subsequently identified. With the ABI highlighting that £1.9bn of insurance fraud probably went undetected in 2009, the industry needs to continue to develop its counter-fraud capabilities,” he said.
“There is no doubt that fraudsters are becoming more sophisticated in devising ways of perpetrating fraud and avoiding detection.”