EDITOR’S BLOG: Conmen frauding it over the rest of us
Dave Smith (not his real name) makes a very nice living – by conning you and me out of our money by criminal means.
He does this by staging minor accidents on the road, specialising in getting people to run into the back of his car by braking suddenly for no apparent reason and then claiming the insurance, usually for ‘whiplash’ injuries, off the other driver because, technically, the ‘accident’ was their fault.
“It’s a doddle (easy),” Smith explains. “If someone asks me why I braked so hard I just say that an animal ran in front of my car and I hit the anchors by instinct and that they shouldn’t have been following me so closely. That usually calms them down a bit and then we swap details. Once I’ve got to that stage, it’s nearly lovely lolly time.”
Smith does not particularly care that his actions both endanger lives and puts everyone else’s insurance premiums up, but then he is that sort of a person. “Looking after number one is the top priority in my life,” he boasts, “and I don’t really care what anyone else thinks about it. I had a factory job once and the hours were long and the money was rubbish, so this is miles better for me and my family.”
So, while he is hardly a criminal mastermind in the echelons of the British underworld, is Smith a thankfully rare phenomenon, a one in a million lowlife that we will hopefully never encounter in our day-to-day lives?
Not quite, according to a survey by Experian, which claims that nearly one in 10 of us (8%) admit to making fraudulent insurance claims.
The UK insurance industry pays out around £54m a day in general insurance claims, although more than 21% believe that everyone exaggerates when making a claim. Having found that, the survey also discovered that 91% believe that insurance fraud is a serious offence, but only 14% of us would report someone we knew to have carried out a fraud.
David Murby, managing director of Experian’s insurance services division, has a theory as to why this is the case. “The survey revealed that people are well aware of what constitutes insurance fraud and consider it a fairly serious crime which is not victimless,” he says. “But they see it as a crime against an organisation rather than an individual and so are less likely to report it.
“In fact, there appears to be a deeply entrenched impression that insurance fraud is commonplace in the UK, but the desire to do something about it is not strong. Despite two-fifths of the population claiming to know someone who has committed insurance fraud, the public is not inclined to report fraudulent activities.”
Murby sees a problem here, as people should be taking the issue more seriously than they do. “It would appear that the insurance industry needs to raise the awareness amongst consumers of the impact of these crimes and work together to change the attitude people have about insurance fraud,” he says.
So why is this? “Because fraud continues to be a major challenge facing the insurance industry, costing an estimated £1.5bn a year,” he replies. “There is little doubt that insurance fraud is seen as serious and people are generally aware that it is not a crime without consequences.
“However, only 15% feels that the efforts made by the insurance companies to combat fraud are sufficient and 51% stated that they didn’t know if the insurance industry does anything to put its house in order or not.”
Finally, Murby has anxieties about the increasing seriousness of the problem, with suggestions that organised crime is becoming involved. “Insurance fraud is evolving and there has been a significant upsurge in organised rings and new claims methods, like slam-ons (the braking trick practised by Dave Smith), leading to higher premiums and greater pressures on the insurer-customer relationship.”