Category: Fraud

Crime: Fraud

Lord Sheikh:

To ask Her Majesty’s Government what steps they are taking to address the rise in fraudulent insurance claims.

To ask Her Majesty’s Government what measures they will put in place to tackle fraudulent insurance claims.

To ask Her Majesty’s Government what mechanisms they will put in place to give companies additional support in detecting cases of insurance fraud.

To ask Her Majesty’s Government what action they are taking to prevent insurance fraud.

To ask Her Majesty’s Government what action they will take to address the rising cost of undetected fraudulent general insurance claims.

The Advocate-General for Scotland (Lord Wallace of Tankerness): Due to improved measurement, prevention/detection capability and consistently raising the profile of insurance fraud both within the industry and in the public domain, the insurance industry has reported an increase in the number of fraudulent insurance claims that are being detected by insurers and through reports from the public who are increasingly playing a role in helping to identify insurance fraud.

The use of specialised software by the Insurance Fraud Bureau (IFB) since 2006 has helped to identify more fraudulent activity in particular areas of the industry, particularly in relation to crash for cash frauds and the involvement of professional enablers, which remains a core focus of attention for the IFB and industry in general.

The insurance industry is an important partner of the National Fraud Authority (NFA) which co-ordinates the implementation of the National Fraud Strategy with partners in Government, law enforcement, the third sector and industry.

As part of this, the NFA works with partners to develop improved information sharing to enable the prevention and disruption of fraudulent activity. The insurance industry is represented by the IFB on a NFA Taskforce to prevent fraud by improving the sharing of information about incidences of fraud across sectors of the economy.

The IFB also shares intelligence and data with, for example, the National Fraud Intelligence Bureau-operated by the City of London Police-the Solicitors Regulation Authority and the Ministry of Justice. Since its formation, the IFB has helped the police make over 426 arrests in connection with organised insurance fraud, resulting in almost 100 convictions to date.

Working with its membership and with the police in joint investigations, the bureau has successfully disrupted actions of criminal gangs concerning crash for cash frauds.

Action Fraud, the national fraud reporting centre run by the NFA, refers individuals and businesses with concerns about insurance fraud directly to the insurance industry’s confidential Cheatline, managed by the IFB.

As part of the insurance industry’s continued commitment to reduce fraud, the operational capacity of the Cheatline was increased in September 2010 and the improvements provide a more enhanced facility to deal with the increase in reports being made, which are complemented by online Cheatline reporting.



Lord Sheikh:

To ask Her Majesty’s Government what steps they are taking to tackle insurance fraud.

To ask Her Majesty’s Government what is their assessment of the reported increase in cases of insurance fraud.

To ask Her Majesty’s Government what plans are in place to give companies support in detecting cases of insurance fraud.

The Attorney-General (Baroness Scotland of Asthal): The national fraud strategy provides a framework for the counterfraud community to strengthen the UK’s fight against fraud and make the UK a more hostile environment for fraudsters. The National Fraud Authority (NFA) is dedicated to delivering on a number of initiatives across the fraud spectrum, co-ordinating the implementation of the strategy between government, law enforcement and the private sector.

Insurance Fraud

Whilst there has been a reported increase in insurance fraud, research also shows an increase in the detection and reporting of attempted frauds by the insurance industry. Research by the Association of British Insurers (ABI) highlights improved data sharing through the Insurance Fraud Bureau (IFB) and a more focused approach to detecting fraud has been adopted by the insurance industry.

Information Sharing

As part of the NFA’s initiative to improve information sharing between public and private sector organisations, it is engaging with the Insurance Fraud Bureau and the ABI (among others) regarding the occurrence of fraud. Improving information sharing channels will serve to improve intelligence gathering, the identification of gaps in our counterfraud measures and the detection of fraud to strengthen our response.

Motor Insurance Fraud (Staged Motor Vehicle Accidents)

General insurance fraud costs the industry £1.9 billion per annum, which adds £44 to the average premium of innocent policyholders. Motor insurance fraud, a highly organised multimillion pound enterprise, is a specific area of insurance fraud which has been on the increase.

Staged motor accidents, including induced accidents which occur when an accident has deliberately been caused with an innocent motorist with the intention of making a false or inflated insurance claim, are a particularly dangerous type of motor insurance fraud involving organised criminal gangs.

In response to this problem a Staged Accident Strategy Working Group (SASWG) was formed under the chair of the Ministry of Justice and latterly the ABI. The group, of which the NFA is a member, has worked with the insurance industry to raise the profile of this type of fraud and has been instrumental in instigating and supporting police enforcement action. By way of example, the IFB worked closely with the Greater Manchester Police on the Crash for Cash operation that recently resulted in the sentencing of 19 defendants for their participation in organising at least 92 fake accidents.

National Fraud Reporting Centre

The recent launch of the National Fraud Reporting Centre (NFRC) on 26 October 2009 now provides a single point of contact for individuals and small and medium-sized businesses to report incidents of fraud. The first facility of its kind, the NFRC’s mandate is to advise victims of fraud of action they can take, including directing them to appropriate authorities for further assistance, and to relay information to the police via the National Fraud Intelligence Bureau (NFIB). The NFIB will be able to better identify and detect cases of insurance fraud.


Police: Motor Accident Fraud

Lord Sheikh asked Her Majesty’s Government:

    What steps they will take to ensure that motor accident fraud becomes a policing priority within the national community safety policing plan, as recommended by their own review on this subject. [HL4412]

The Minister of State, Home Office (Baroness Scotland of Asthal): A wide-ranging cross-Whitehall review of fraud, which reported last year, recommended that the Home Secretary should consider making fraud a policing priority within the national community safety policing plan. The review made no recommendations specifically about motor accident fraud.

Key actions for the police, set out in the national community safety plan update published in November 2006, include the need to have strategies to address all major threats, including fraud.