Accident claim news 20/02/2007
Whiplash claim fraudsters targeted
Politicians have been requested to do more to combat the huge number of whiplash claims caused by bogus car crashes.
Road traffic accidents caused intentionally for the purpose of claiming personal injury compensation cost the UK insurance industry hundreds of millions of pounds a year and put numerous drivers at risk every day.
Conservative MP Richard Bacon has called on the Government to make an extra effort to tackle the "crash for cash" issue, warning of the dangers that drivers are facing and pointing out that insurers are struggling to make prosecutions because insurance fraud is not viewed as a high priority for the police.
Talking to the media after making his request at Parliament, the MP for South Norfolk said, "It has been a very low risk crime with a very high reward, and so unsurprisingly it has grown very rapidly."
The Insurance Fraud Bureau (IFB) has estimated that there have been in the region of 22,600 bogus vehicle accidents since 1999 and each car crash can often result in compensation claims of as much as £30,000.
A typical "crash for cash" involves fraudsters driving a car and breaking sharply at a roundabout or junction with the intention of causing other motorists to collide with them. A claim for the damaged car, as well as for supposed personal injuries, is then made against the innocent driver's insurance.
Some fraudsters fill their vehicles with as many as five adults before causing a car accident for which they can all then make bogus whiplash claims for compensation. Phoney whiplash claims are especially popular among criminals causing car accidents because the symptoms are fairly limited and can be faked with little difficulty.
Bogus car accident compensation claims damage not only the innocent motorist's no-claims bonus but also the insurance industry in general. An estimated £1.5 billion is spent every year on fraudulent accident claims and each motorist is said to pay an extra 5% on their insurance premium as a result.
Mr Bacon told ministers that "crash for claims" are becoming increasingly frequent and it is predicted that the next 18 months will see more than 20,000 take place. He urged the Government to do more to halt the epidemic and also warned that some of the money made from fraudulent whiplash claims was being used to fund serious criminal activities.
Addressing the House of Commons, the Tory MP revealed, "Insurers believe the proceeds are now being routinely used to fund other forms of serious, organised crime including drug trafficking, money laundering and other frauds."
In light of the MP's request, the Solicitor General accepted that there was a problem and promised that more would be done to help the police and the recently formed Insurance Fraud Bureau to fight phoney car accident and whiplash claims.
For more information about the IFB, visit www.insurancefraudbureau.org.