Four conmen were jailed at Reading Crown Court last week for the death of a driver when they staged a car crash to claim a £20,000 insurance payout. The incident is the first time that a "cash for crash" scam is known to have resulted in the death of a driver.
Baljinder Kaur Gill, 34, was killed after her Ford Fiesta was caught up in attempted insurance fraud in June 2011. Four Polish men in a VW Passat and Audi A3 attempted to set up a crash with a Ford Transit on a three-lane stretch of the A40 in Buckinghamshire. The Passat braked sharply in front of the Transit, whose driver managed to stop. Gill, however, was unable to stop in time and hit the van. She was killed after her car, stranded in the outside lane, was hit by another van.
Estimates suggest that about £60 of your annual car insurance premium directly pays for losses within the insurance industry as a result of these "crash for cash" scams. That's according to David Hindmarsh, Detective Inspector in charge of the Metropolitan Police's Operation Catcher, a 10-strong team responsible for investigating car insurance fraud throughout London.
"The most concerning form of crash for cash scam is the induced collision," he said. "The criminal gang will go out with two cars; one is a decoy and the other is a stooge car [often an aging premium vehicle of little value]. The decoy car will brake hard and pull to the left at the last minute, giving the stooge car an apparent reason to brake. The stooge car will overexaggerate its braking so that the person behind runs into the back of it."
Current civil liability regulations dictate that the driver of a car that hits the back of another is at fault, so unless the incident is identified as being fraudulent, the claim will be made on the innocent victim's insurance.
"This is where the fraud begins," said Hindmarsh. "The organised gang will have set up an accident management company to handle the incident. This company will have a sister car hire company, which doesn't actually own any hire cars. However, they'll bill the third party's insurance for a like-for-like replacement, which may be a high-end Mercedes, for example, costing up to £250 per day. If a claim lasts for three or four months, a hefty bill soon mounts."
Since the accident management and associated car hire companies are not legitimate, the replacement car doesn't exist and the funds simply drop into the gang members' pockets directly from the victim's insurance company. On top of credit hire charges, the gangs can also make money from false recovery and storage fees, solicitor referral fees and personal injury claims.
The gangs' priority is that the victim's car is insured, so they will target vehicles with children on board and those with personalised number plates. The crooked drivers and passengers, meanwhile, will simply be foot soldiers recruited from the street on the promise of a quick buck.
One London-based gang, led by Masi Naqshbandi, committed 260 fraudulent accidents over a 15-month period, attempting to defraud the motor insurance industry of £6.5 million. Naqshbandi was sentenced to seven years and three months in prison last year.
Naqshbandi was brought to justice with the help of evidence compiled by Asset Protection Unit Ltd (APU). Neil Thomas, its director of investigative services, which works closely with Hindmarsh's Operation Catcher, said: "We're very keen to tackle fraud in the industry. Our role is specifically fraud detection and prevention to save the public money, as well as the protection of Accident Exchange's near 3,000-strong fleet."
Although APU and Operation Catcher are currently unique in their fields, Hindmarsh is confident that police forces are becoming more aware of such insurance scams: "The message is starting to get out there. I would urge the public to take pictures of the damage to both cars if they are involved in a crash; we've seen that gangs will cause further damage if it isn't sufficient.
"Also take photos of the driver and all occupants, if you can do so without putting yourself at risk, and look out for CCTV cameras and independent witnesses.
"It's only a matter of time before every single police force has a dedicated team to tackle crash for cash scams."
