Avoid the crash-for-cash scammers
In the last three years hundreds of motorists have had the same experience; they were driving round a roundabout when suddenly the car in front slammed on the breaks, leaving them no time to stop.
A smart young man got out of the car in front, said words to the effect of "Didn't you see the bike?" or "He came out of nowhere", they exchanged insurance details, and drove off. One such man was Mohammed Patel, 25, from Bolton, who was jailed for four-and-a half years in October for what has been called the 'cash for crash' scam.
But this is far from the end of the story.
Patel was what is known in the insurance fraud underworld as a 'stunt driver,' paid to cause crashes. He was personally responsible for causing nearly 100 accidents, and made £46,000 from his crimes. But he's not the only one involved.
The process is complex, and makes money for an awful lot of people. Those involved include the owner of the car, and many of Patel's clients are currently awaiting trial. Sue Jones, unit head of the Insurance Fraud Bureau explains: "The starting point is when an individual is ready to get rid of their car.
"They may not be able to afford to get it through its MOT or to repair it, and they want a replacement. There are criminals who will take your car and involve it in some kind of accident. They will then pretend to be you at the scene, hand over your name and insurance details, and allow you to receive a payout and get a replacement car."
Other businesses profit from the process, including any solicitors involved in a successful personal injury claim resulting from the crash, car hire companies arranging short-term replacements and car storage companies.
Often there will also be a claims management firm involved, which will take the car owner on as a client and make money by referring the case to all these associated businesses. Jones adds: "If there were several people in the car and they all make personal accident claims they could easily make over £3,000 in referral fees for the crash."
These firms may be unaware of the fraud, although individuals at one or more of them may be involved.
Jones would not comment on whether the claims management firm was likely to have been acting in good faith, whether individuals within the firm were aware of the fraud, or indeed whether anyone linked to a claims management company recruited the stunt drivers themselves.
We do know, however, that some individuals working for a claims management firm have been arrested.
Clearly the jailing of Mohammed Patel is not the end for these crashes. It is therefore worth knowing how to know if you have been a victim. Those most likely to be targeted, Jones says, are those driving nice cars, which are likely to be insured, and those who do not look like they will put up a fight at the scene.
There's no sure fire way of spotting the fraud, but alarm bells should ring if the driver appears to have caused the accident for no apparent reason; if they have been behaving oddly – such as following you before the crash; they have already prepared details to swap with you; or the car is packed with people (who were likely to have been paid to be passengers and might later claim for injuries).
If you're suspicious, don't tackle them at the scene. Try to take photos of the damage and get a description of the driver, count the number of people in the car, and ask people nearby if they will be an independent witness. Then contact your insurer and the police to alert them of your suspicions.
If you're a victim it will cost you time, energy and distress sorting out your own car, and you may lose your no claims bonus. But you don't have to be involved in a crash to be a victim.
When Judge Bernard Lever spoke at Patel's trial he said: "This kind of fraud costs the industry £1.9 billion and this adds about £49 on every single motorist's insurance premium."
The fact that these gangs exist is clearly not the fault of the authorities. But the way the system makes so much money for so many people means it is ripe for exploitation. Claims management in particular is a massively growing industry within the UK.
The government's Claims Management Regulation Unit lists 2,460 authorised claims firms, and it acknowledges there may be plenty more operating unlawfully without authorisation.
The cash-for-crash fraud seems to be playing itself out. The custodial sentences, high-profile trials, and the fact that the insurance industry is working with the police to crack down on the crimes may be enough to deter.
However, the claims management firms remain vulnerable to infiltration from criminals, who may devise further variations on the theme, as long as they are allowed to make so much money from misfortune.
No claims bonus
A discount on a car insurance premium as a reward for having not made a claim on the policy. The NCB is earned for every year of claim-free driving; a driver will earn another year’s NCB to a maximum of five years. The actual discount on the insurance premium will depend on the insurer. If you make a claim, your insurance company may reduce your discount by a number of years so you have to “earn” these over again or it may revoke the NCB entirely. Motorists can generally transfer their NCB across to another insurer and can pay an additional premium to protect it so should they have an accident, the NCB remains intact.