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One of Call Wiser’s largest insurers, Aviva, recently revealed that unsuspecting householders are being targeted by organised fraudsters who use their address as a front from which to make bogus motor insurance claims.
The revelation came after the company’s anti-fraud system exposed a scam involving 157 bogus claims, worth an estimated £3 million, where hundreds of Norfolk city residents unwittingly had their addresses used to set up policies.
The fraudsters began to make claims under the fraudulent policies within a matter of days, but fortunately Aviva were able to detect the scammers, decline the claims, cancel the policies and alert its customers and local residents of the threat.
Fraud is still a growing problem in the insurance industry and Aviva reports that it detected over £95 million worth of fraudulent claims in 2014. This equates to an average of 39 claims per day, each valued at £260,000.
The insurer exposed more than 6,300 fraudulent motor insurance applications in 2014, which ranged from deliberate nondisclosure or misrepresentation of important facts when requested, to the purchasing of policies by criminal rings with the sole intention of making bogus claims.
Aviva also reported that motor injury fraud, which includes bogus claims, organised fraud and deliberate “crash for cash” scams, still accounts for approximately 60% of all fraudulent claims.
Amongst other scams reported by the insurer was ‘ghost broking’, which is where unauthorised persons distribute false or invalid insurance documents to unsuspecting individuals. These practices are particularly harmful to motorists, as they leave the victim unknowingly uninsured as well as significantly out of pocket.
Aviva said that that organised fraud has risen by a staggering 28% in the last year and added that it was still investigating over 15,000 suspicious claims, of which 6,000 were motor injury claims linked to known fraud rings.
Head of fraud at the company, Tom Gardiner, said, “Our figures show that insurance fraud remains a significant and complex challenge, but the biggest threat to customers continues to be fraudulent motor claims, which puts innocent motorists at risk of physical harm, while pushing up premiums for everyone.”
Insurance companies continue to invest heavily in their ability to detect and prosecute fraudsters and have supported measures taken by the Government to combat fraudulent whiplash claims. However Mr Gardiner believes that more needs to be done to tackle the root cause of Britain’s “cash for crash” industry.
One measure proposed by Aviva is to remove the cash and profit incentives from the system, for example, replacing cash compensation for minor injuries with rehabilitation.
“The fight against fraud begins at the front door,” Explains Gardiner. “We are now screening our personal and commercial motor business at the point of sale and we are committed to protecting our brokers and innocent customers from being targeted by fraudsters.”
As a specialist motor insurance broker, Call Wiser also undertakes a regimented anti-fraud check at point of sale, which aids in the detection of potential fraudsters. These procedures have enabled us negotiate excellent rates from our 30+ insurer partners, which we can pass onto our customers.
Members of the public are also able to report suspicions and information regarding insurance fraud anonymously to the Insurance Fraud Bureau (IFB) via their Cheatline on 0800 422 0421. All the information received via the Cheatline is managed in the strictest confidence and used only for the purpose of detecting and disrupting insurance fraudsters.
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