IFB ups pressure on Home Office

Are you in a fraud hotspot? Should you worry if you are?

These questions occurred to me when the Insurance Fraud Bureau came to the House of Commons at the end of last year and presented the latest research into staged motor accidents to MPs. This plague is spreading fast. Organised gangs are selling the methodology on a franchise basis, providing training and support to other criminal groups. With £30,000 to £40,000 to be made per accident this has become big business.

Over the past six years it estimates there have been more than 22,600 staged accidents and the growth has been exponential. The top hotspots at the moment are Blackburn, Bradford, Birmingham, Oldham and Bolton, with parts of London, Manchester and Liverpool catching up fast.

The IFB's plea was to put pressure on the police and the Home Office to give greater priority to investigating and prosecuting fraud, especially staged motor accidents. At the moment it does not get anywhere near the top of the police's priorities because all the targets set by the Home Office overlook it. Their argument is that it is a victimless crime, the only losers are insurance companies so there is no immediate threat to the public. They are wrong but nobody has succeeded in shifting the misconception. After all, insurance companies can only pass the cost of fraud onto the rest of us.

This presentation to MPs started to shift that perception. In every staged accident there is an innocent victim who is randomly targeted by the gangs. There is an increasing tendency for these victims to be women - mothers on the school run have become a particular favourite - because they are more likely to admit liability than men. This makes it a public safety issue and the feeling among MPs at the presentation was that this has to be impressed on the Home Office and the police. It is no longer a victimless crime.

So, should brokers worry about this? If so, can they do anything about it?

They should worry about it because there is no doubt that the average cost of motor insurance in the most identifiable hotspots for staged accidents is going to rise. That is part of us all becoming victims and is worth stressing to local MPs so that they can join in the lobbying for tougher action against the fraudsters. If you are speaking to your MP you would do well to arm yourself with the data the IFB has produced on this. Beyond that it is hard to see what a broker can do because the person against whom the claim - potentially their client - is an innocent and randomly targeted victim. It is not like other types of fraud where you can be on your guard against selling a policy to a potential fraudster as the perpetrators will not darken your door.