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‘Crash for cash’ crackdown aids fraud battle

A focus on organised crime and “crash for cash” staged motor incidents helped British insurers thwart 125,000 fraudulent claims worth £1.3 billion ($2.18 billion) last year, according to the Association of British Insurers.

The figure represents a 5% drop in the number of bogus claims detected, compared with 2015.           

There was a slight increase in the number of opportunistic motor insurance fraud incidents, to 57,000 last year from 54,000 in 2015.

“Opportunistic fraudsters will generally be otherwise law-abiding citizens,” the association says. “They are often encouraged by disreputable claims management companies, as seen by the resurgence in whiplash-style claims reported to the Government’s Compensation Recovery Unit.”

Overall, organised fraud fell by about 30% to 15,000 incidents detected, valued at £174 million ($291.48 million).

The association says this reflects the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department’s work exposing staged “accidents” and other scams such as fake motor insurance.

Fraudsters are now moving towards bogus liability claims, with a surge in false food poisoning claims against some overseas hotels and tour operators.

The total number of detected motor frauds fell 4% to 69,000. Property insurance frauds fell 4% to 26,000 cases.

The association’s Director of General Insurance Policy James Dalton says the rise in opportunistic fraud makes it imperative that the Government tighten regulation of claims management companies.

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