1 in 7 claims are fraudulent, says Insurance Fraud Bureau

Weekly whiplash news review: 7 days ended 28 nov 2012:

This week, the Insurance Fraud Bureau made major waves after announcing that one out of every seven whiplash injury claims are a result of organised fraud.

According to the IFB’s most recent research, not only are one out of every seven personal injury claims for whiplash injury completely fabricated and as a result of a ‘cash for crash’ scam but one out of every 12 of those surveyed admitted to being amenable to becoming involved in a scam themselves. The Bureau, which is currently undertaking investigations of around 40 criminal gangs, estimates that fraud could cost as much as £400 million in increased costs to insurers every year – costs that are passed along to policyholders in the form of increased premiums.

Bureau chairman, David Neave, says that it’s more than just the insurance industry that suffers from these dastardly criminals. Scammers are picking the pockets of every single insurance customer who experiences a rate hike in order to cover fraud-related losses, Mr Neave added, but ‘cash for crash’ fraud is especially abhorrent because of the additional risk places upon innocent drivers.

The risks posed by fraudsters causing accidents deliberately all over the UK are quite diverse, made worse by the fact that these criminals are motivated completely by their own avarice and don’t care a whit about potentially putting the lives of innocents in harm’s way. Faking accidents is incredibly dangerous as collateral damage is quite common, and many times drivers not in on the scam end up embroiled in highly expensive and possibly even physically debilitating accidents.

The IFB’s recently published report says that around 69,500 personal injury claims – approximately one in seven – were from cash for crash scams throughout the period of the research study. The report exposes how these organised crime rings operate, coercing and recruiting those from local communities to participate in these schemes in exchange for a cut of the profits, and it’s not just other drivers – personal injury lawyers, mechanics, doctors, and recovery and storage companies all get in on the act.

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