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The number of fraudulent claims has been steadily rising over the past few years and is said to get worse as the severe government cuts and the increase in VAT are likely to hit the pockets of the public. The Association of British Insurers (ABI) stated that 107,000 insurance claims made during 2008 were false. While most claims were against home insurance, fraudulent car insurance claims were number one in value. Car insurance companies have become increasingly stringent in their investigations as they are in a particularly vulnerable position.

However, it is not just ordinary consumers who have been found guilty of making false claims. Early in 2010 the BBC discovered that a claims company based in the midlands was arranging fabricated car crashes and paying participants to accept responsibility for the incident. The BBC unearthed this unusual story when one of their undercover reporters was asked to be involved in a fake crash for £500, the reporter wasn’t involved in a collision but his car was taken for a short period of time that the accident was said to have taken place and he was coached on what to tell the car insurance group. The claims company was making considerable earnings from this practise claiming compensation for damage to the vehicle and personal injury. As a result the Insurance Fraud Bureau opened a phone line and website dedicated to reporting similar crimes.

Later that year the BBC issued another report stating that ‘crash for cash’ scams were at record levels. In the report it claimed that the Insurance Fraud Bureau put the number of these kinds of accidents at 30,000 for 2009. The scam was especially prolific in the midlands but throughout 2010 had been spreading to other areas of the country. The scam involves a paid driver deliberately applying their brakes suddenly so an unsuspecting motorist rear ends their vehicle. The claims made to the car insurance groups were quite considerable. What has enraged the public in particular is that these fraudsters target susceptible drivers such as the elderly.

The report goes on to advise that motorists involved in such incidents should be careful to remain calm and to record any damage by taking photos with their mobile phones. As the scam has advanced the car insurance groups are fighting back. In April 2010 a gang of 25 were sentenced to prison for their part in a widespread ‘crash for cash’ scam. The gang had scammed thousands of pounds from car insurance groups and were on their way to making hundreds of thousands. To make sure you avoid this and save as much as possible on your insurance click here.