Given the chance to nick a forklift truck most thieves would probably pass. Just picturing the comical getaway at a top speed of 10mph would be enough to put them off. But for the highly professional criminal gangs who target such plant machinery, the pickings are extremely rich – and it is insurers who pick up the bill.
Every year, the theft of equipment costs insurers hundreds of millions of pounds in claims losses. The Home Office estimates that £62m of construction equipment is stolen every year, while NFU Mutual estimates that more than £90m of equipment is stolen from farmers.
"Construction equipment, plant, agricultural machinery and trailers are seen by criminals as a ready source of cash with very little downside," says Tim Purbrick, manager of the National Plant & Equipment Register (TER) in Bath.
"The equipment is rarely checked on the road by the police and, if they happen to be unlucky, the penalties for being caught are much less than for other, more serious criminal activities.
"Apart from the opportunist thief, who will steal a mini excavator that has been left on the back of an unsecured trailer, equipment is also stolen by the serious and organised criminals who are stealing to order on behalf of foreign crime syndicates."
TER is now expert in tracking stolen machinery. Since it started operations in 1995, it has recovered over 870 stolen items of equipment, worth a total of more than £4.5m.
Stolen items go either west, to Ireland, or east across the Channel by ferry, before heading on to eastern Europe or the Mediterranean, to destinations like Malta, Cyprus, the Middle East and even South Africa, where high-quality equipment at knock-down prices is always in demand.
Casting a shadow over theft
In the last year, TER – the 'sister company' of the Art Loss Register – assisted the National Crime Squad (NCS) in an investigation code-named Operation Eclipse.
More than £1m of equipment was being stolen from locations across the UK and brought to two yards in southern England, where it was containerised before being sent through Felixstowe to Ashdod in Israel.
TER's team of specialist plant investigators entered the containers at the dockside to recover the equipment's hidden serial numbers, which were then analysed by TER's database staff at their offices in Bath. Using its access to the National Police Computer, TER's recovery team was able to determine the crime victims and provide the evidence required for the conviction of three men, for a total of 11 years, at St Albans Crown Court.
TER is also using the courts in Israel to recover a further £60,000 of equipment seized by the Israeli police. The equipment is owned by the Royal & SunAlliance and Avon and Colonia Baltica.
Detective Inspector Peter Scott, who led the Operation Eclipse team, said: "The co-operation and assistance that TER has given the NCS has been outstanding. If any officer involved with plant and equipment needs expert advice, then they should contact TER."
As border controls are relaxed around Europe, the movement of stolen equipment between countries has become a serious issue for police forces across the Continent.
TER has already begun recovering equipment stolen in the UK from Europe. In November 1999 TER learned that a horde of stolen machinery, worth £50,000, was at a farm outside Le Mans in northern France.
Within eight hours, a French-speaking TER investigator had arrived in Le Mans to assist the Gendarmerie with the seizure of the equipment. Unfortunately, and despite the valiant efforts of the UK Interpol Desk at the National Criminal Intelligence Service, the Gendarmerie, who are controlled by the judiciary, refused to act without the authorising paperwork from the Crown Prosecution Service in Sussex.
These papers took an unbelievable seven days to arrive in Le Mans, during which time the equipment could easily have been moved on to its destination in Cyprus. Once the papers arrived, TER organised the successful recovery of the equipment to the UK.
Feeding the tiger
Ireland is, at the moment, Europe's tiger economy. Much of the equipment stolen in the UK goes straight to work on construction sites in Ireland and the balance is stolen as a cash source for organisations, some of which have close links to terrorist activities. According to TER, the border area between the Irish Republic and Northern Ireland contains one of the most significant concentrations of stolen equipment in Europe.
In 1999 alone, 90% of the equipment that TER recovered in Ireland had been stolen in the UK. In December of that year, TER recovered £150,000 of equipment, including three articulated trailers – two Andover trailers insured by Norwich Union and a Dennison trailer insured by Highway Motor Policies – and a Fiat Hitachi 200LC tracked excavator, insured by CGU.
All of this equipment was stolen in the UK – the excavator had been liberated from London only three days before – and all items were found before the insurers had paid out any claims.
Co-operation is the key
To succeed in its work, TER relies on the accurate and timely logging of equipment losses into its database of owned and stolen equipment .
As Insurance Times recently reported, it takes an average of 56 days for an insurer to log a loss with TER,while it takes the criminals an average of 48 hours to get a high value item of equipment out of the country. Purbrick is keen for insurers to make their clients responsible for logging equipment losses directly with TER in order to reduce the time between theft and reporting. This will then afford the police and TER more time to recover stolen equipment before it leaves the UK.
"We would also like to see insurers making it a condition of insurance that their clients register their equipment schedules on our database, as part of their own and their client's risk management," adds Purbrick. "It means that we can centralise more data and therefore become a more effective crime-fighting tool for the police, helping reduce equipment theft across a number of industries."
Currently, there are 350,000 owned items and 31,000 stolen items logged on the TER database. Once it has recovered an item of equipment for an insurer, TER will either sell it, or return the item to the owner and receive a percentage of the sale price as its recovery fee.
TER also sells salvage for insurers, whether or not it recovered it, because it believes that its specialist expertise in the equipment field can result in a better sale value than insurers could expect from a general salvage company.
Equipment insurers, such as Norwich Union, Royal & SunAlliance, CGU Insurance, NFU Mutual, Allianz Cornhill and Zurich Engineering are contracted with TER for the logging of their losses and the recovery of their equipment.
"We are looking forward to bringing the rest of the Zurich Group on board in the near future," says Purbrick. "We are also negotiating with the Lloyd's Motor Underwriting Association for a contract with their members, and hope to roll out a similar contract with other Lloyd's associations."
TER is also providing security advice on a contractual basis for some of the UK's largest construction contractors.
TER's database and expertise have now reached the critical mass required for the introduction of 'due diligence' to markets which have previously had little or no opportunity to carry out pre-purchase checks on second-hand equipment.
"It is incredible that you can go out and spend £100,000 on a machine without being able to make sure that the item is not stolen and/or on finance, let alone there being any requirement for ownership documentation," says Purbrick. "We will run the necessary database checks and physically examine the equipment, if necessary, in order to determine its ownership and finance status."
TER has suggested to the Home Office that police theft data and DVLA ownership data for equipment are outsourced to TER. Purbrick foresees that by managing the data itself, TER will open the door to internet searches for pre-purchase equipment checks, the fulfilment of any future requirement for mandatory equipment registration and the issuing of log books. "It is about time that equipment buyers had the same opportunities for protection as car buyers," says Purbrick, who is obviously looking forward to the task.