Vehicle inspection business Motorcheck has developed an on-the-spot reporting system that it claims could help to deter fraudulent motor claims.

The company has issued its inspectors with personal digital assistant (PDA) devices that can transmit vehicle information direct to insurer clients.

Using the PDA, the company's inspectors can provide the insurance company with information on the condition of cars, registration, tax certification, MOT and policyholders' identities and drivers' licence details.

A Motorcheck survey of more than 6,000 vehicles, based on new business policies of leading UK insurers, indicated that only 34% of all cars matched the details of their policy applications.

The survey also revealed that in at least 2% of the claims, the cars did not exist as they had already been sold, stolen or written off.

Markus Schmidt, Motorcheck general manager, said: "The system helps the insurer to prevent fraud at the underwriting stage, rather than having to detect it after a claim is made."

The ABI estimates that motor fraud costs the industry £1bn a year.