Welcome to our latest blog. This month, Kelly Mantle, Liability Claims Manager, talks about the changing face of fraud within the motor insurance industry.

26 April 2023

Insurance fraud costs the industry over £1 billion each year, and as fraudsters are becoming more and more desperate, they also becoming more and more sophisticated in how they go about de-frauding their insurance companies – and consequently accident management companies including Kindertons.

I joined Kindertons 19 years ago as a Claims Handler and have since worked my way up, spending time in pretty much every department here. I’m now Liability Claims Manager and head up the fraud side of the business. Fraud detection is of paramount importance to us as a business – especially in the current climate - and because of this, it’s absolutely vital that we have the appropriate framework, people and procedures in place including our Anti-Money Laundering and Anti-Bribery policies.

Our Fraud Team are the best!

At the end of last year, we had a complete overhaul of our fraud department and put in place a new dedicated fraud team to work collaboratively with our litigation department and our Data Protection and Legal Compliance Manager - in preventing, detecting and responding to fraud. We also implemented a comprehensive induction programme for new starters which covers fraud prevention training for all staff at Kindertons regardless of their job role. Our team also run regular refresher sessions with the claims teams to ensure they are kept up to date with our internal risk profiling matrix to protect and prevent fraud as much as possible.

We work with the police, as well as counter fraud teams at various insurers, to specifically focus on the detection and prevention of both individual and more serious organised fraud. When an individual makes a claim following an incident, our dedicated team will carry out an investigation, with the knowledge of the claimant, which will often involve standard checks against fraud indicators, open-source data such as checking companies house, credit safe and using google searches. Our internal database consists of a built-in duplicates checker and technology designed to deliver counter-fraud intelligence to the investigator and provide a complete set of information, including claims history, ID verification and vehicle checks. The team are specialists in identifying any staged accidents through reviewing things such as the location of the accident, the time, any witnesses or passengers and the circumstances of the accident. The team then share internal and external intelligence reports to wider stakeholders with an indication of the extent of fraud. This information provides the mechanisms for understanding the exposure to fraud and taking steps to mitigate the related risks. 

The rise in ‘Crash for Cash’ scams

The biggest issue over the last year or so, and the one that’s keeping our team busy and, on its toes, is the rise in the organised ‘crash for cash’ motor fraud scams. This has been huge recently and we’re now seeing more of this kind of fraud run by highly organised and criminal gangs. Whereas we used to have individuals making false claims on cars that had been in a ‘fake crash’, we’re now seeing more and more professional cases – including groups of professionals working together to fabricate or exaggerate a claim. 

Why the sudden upturn in organised fraud

It’s essentially been the perfect storm following the PI reforms, the pandemic and the economic crisis, and sadly, there are many people who have been unable to get back on their feet. In the middle of the pandemic, the PI Reforms were introduced, which meant that petty criminals who could maybe once make a fast buck on a PI claim, were no longer able to make the same kind of money – and certainly not in the same time frame - and to top it all off the cost of living has gone through the roof which has meant more people being more desperate and turning to crime.

In a nutshell, fraudulent claims drive up prices for honest customers and can make insurance premiums more expensive. By reporting fraud, we are helping to identify fraudsters and with the support of regulators and the police we can help bring them to justice.