Crash-for-cash schemes remain a “real and growing” threat for fleet managers and drivers alike, but some simple measures could help drivers avoid being caught out.

Industry body Cifas revealed last year that fraudulent car collision claims increased 45% year-on-year and AX says the pandemic may have increased the threat of motor fraud

Industry body Cifas revealed last year that fraudulent car collision claims increased 45% year-on-year – well above an average of 27% across all categories of insurance fraud.

And according to vehicle protection and management technology provider AX, the Covid-19 pandemic may have increased the threat of motor fraud.

Neil Thomas, director of investigative services at AX, said: “Recent experience has shown how some criminals have used the Covid-19 pandemic lockdown to plan motor insurance frauds, and they are now intent on cashing in at the expense of innocent motorists.”

However, with the Insurance Fraud Bureau (IFB) saying crash-for-cash schemes cost the industry around £340m a year, AX is highlighting a number of ways fleets can help educate and protect their drivers and vehicles from such scams.

The Different Types of Crash-for-Cash Schemes

According to the ABI and AX, there are three main categories of crash for cash schemes: staged collisions, ghost collisions and induced collisions .

Staged collisions

Fraudsters intentionally damage vehicles to give the impression that a real crash has occurred. This could involve taking a sledgehammer to a parked car, or even intentionally crashing two vehicles – whatever it takes to fabricate the evidence.

Ghost collisions

While not strictly a crash for cash scheme, here a fraudster submits a totally fictional claim for a collision that never took place. It is like a staged collision except paper-based, taking advantage of instances where claims are never fully investigated.

Induced collisions

Finally, the most notorious tactic is the induced collision. This is where the fraudster drives in an erratic or manipulative way near innocent motorists, hoping to engineer crashes that appear legitimate.

With regards, to induced collisions, the most reported technique used to induce collisions is braking hard while driving in front of another car, causing a rear-end collision. However, AX has highlighted other, more sophisticated techniques:

Flash for crash: where criminals flash their lights at junctions to let other drivers out, only to crash into them on purpose.

Hide and crash: where criminals hide in a driver’s blind spot before moving in front and slamming on the brakes

Crash for ready cash: where the fraudster extorts cash from the driver at the roadside rather than through their insurer

Tips to Protect Fleet Vehicles from Crash-for-Cash Schemes

AX has three key recommendations for fleet managers to help avoid such schemes:

Teach drivers to recognise the warning signs

To reduce the risk of induced collisions affecting their vehicles, fleet managers should train their drivers to recognise the warning signs of these schemes.

For example, it is often possible to identify cars used in traditional slam-on collisions because they have rear-end damage from previous scams, or because the fraudsters have intentionally disabled their brake lights to increase the chances of a collision. Also watch out for erratic driving and passengers looking back as they could be waiting to tell the driver when to slam the brakes on.

Investigate collisions and claims against your fleet

When a collision happens, train your drivers to gather evidence safely at the scene, note key facts and where possible identify potential witnesses.

The phrase Road Traffic Collision (RTC) replaced Road Traffic Accident in Policing some time ago, the logic being very few, if any, collisions happen by accident. A good investigator can nearly always identify the reason, whether that is driver error, mechanical failure or fraudulent activity; it is vital that fleet managers have this evidence at hand quickly to prove fraudulent behaviour from the third party. For individuals and fleets that suspect they may have been the victim of a crash-for-cash scheme, report this to the police at the time and to their own Cheatline service.

Early identification of fraud can save companies significant amounts of money, stop fraudsters committing repeated scams and help authorities bring the criminals to justice.

Invest in dashcams, vehicle tracking devices and telematics

Finally, the use of technology can be instrumental in helping fraud investigators establish how the collision happened.

Any fleet manager who suspects they may have been targeted by a staged collision can use telematics data to instantly verify whether the damage happened at the time and location reported by the claimant.

A company spokesperson added: “It is important not to assume telematics is a silver bullet, however. While modern vehicle tracking devices collect a vast amount of information, making sense of this data takes time and expertise. For this reason, fleet managers hoping to stem the tide of fraudulent motor insurance claims and crash-for-cash scams should ensure they also have specialist vehicle crime investigators on their side.”