The insurance industry has launched a new investigation bureau to clamp down on organised fraud, which is making up to £4m a week for criminal gangs according to the Association of British Insurers.
The Insurance Fraud Bureau, headed by former New Scotland Yard detective John Beadle, will analyse industry data for suspicious patterns of claims or signs of potential fraud, such as multiple claims.
The IFB aims to encourage insurance companies to share information with each other and the relevant authorities. It will also set up a confidential ‘cheatline’, allowing people to report incidents of suspected insurance fraud.
Stephen Sklaroff, deputy director general of the Association of British Insurers, said: “Last year we detected fraudulent claims worth more than £400m. But the growth in organised fraud requires a new approach.”
It is estimated that bogus and inflated insurance claims cost the industry more than £1.5bn, adding around 5% to the average premium.
A common scam is what the ABI calls ‘staged motor accidents’, where criminals deliberately cause accidents with innocent motorists and then claim against their insurers for vehicle damage and fictitious injuries.
Last month police arrested seven people in Harrow who were believed to have staged 60 fake road accidents. Officers followed a trail of false claims totalling over half a million pounds and discovered a Ferrari and two BMW X5s bought with the proceeds of the crimes.
Another case saw ten members of the same family jailed after being found guilty of a £3m insurance and benefits conspiracy. The family were involved in various scams, including staged accidents and bogus disability claims against insurers and the government.