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300K Car accidents deliberately staged since 2009

Press release: 14/02/2014

  • It is estimated that over 300,000[1] car accidents were deliberately staged in the past five years involving thousands of innocent motorists; over 1,000 a week
  • Over 30,000 people have been a victim of a ‘slam-on’ scam in the past year where the driver in front slammed on their brakes for no apparent reason causing them to crash[2]
  • One in 30 (3%) drivers believe they were involved in a ‘flash for cash’ scam in 2013[3]
  • Fraudsters target females and the under 35s as they believe they are less likely to challenge the insurance claim[4]

A growing number of drivers say they have been involved in a staged car accident, where the other party deliberately collided with them for financial gain. According to research from LV= car insurance, it is estimated that over 300,000 accidents were staged in the past five years involving thousands of innocent motorists – equating to over 1,000 every week.

Crash for cash fraud takes place when one or more parties involve themselves willingly in a road traffic accident in an attempt to financially gain, often claiming for injuries such as whiplash, with additional pay-outs to compensate for loss of car or lost earnings. Various methods are used to create an incident which results in the victim believing they were at fault and admitting responsibility.

Staged accident tactics

LV=’s claims crime prevention team investigates suspicious claims to make sure that fraudsters are brought to justice and do not profit from their crime. It has identified that the most common types of staged accidents are ‘slam ons’, ‘flash for cash’ accidents and ‘full-car smash’ scams.

  1. The slam-on. This is where a fraudster brakes sharply for no apparent reason, causing the motorist behind to drive into the back of them. In these cases, the fraudsters will often disconnect their brake lights so the motorist behind does not know that they are slowing down. Over 30,000 accident victims were involved in a staged rear-end shunt in 2013.
  2. The flash for cash scam. This is where the fraudster flashes their headlights at the victim to let them merge into traffic, but will then drive ahead and crash into the back of their vehicle. Almost one in thirty (3%) motorists involved in a car accident in the past year believe they fell victim to this scam.
  3. The full-car smash. In these cases fraudsters take a car-load of passengers out on the roads and then induce an accident with another vehicle. The fraudsters then make multiple claims for personal injuries, which often far outweigh the cost of repairing the vehicles involved.

In each of these scenarios it usually results in a ‘your word against mine’ situation making it extremely difficult to allocate blame. Fraudsters appear to select targets who they believe are less likely to kick up a fuss about the accident. Research shows that in the past two years, almost two thirds (65%) of victims were female and 59% were aged 34 or younger.

In addition to staging accidents, LV= has seen a marked increase in fraudsters exaggerating the circumstances of an accident in an attempt to gain a higher payout. For example, fraudsters may exaggerate or even invent an injury in order to claim compensation or try to claim for vehicle damage that is unrelated to the accident. One in three (32%) drivers who have been involved in an accident in the past two years say the other party tried to claim compensation for injuries to passengers who weren’t in the vehicle at the time or say the other party exaggerated the circumstances of the accident in order to inflate their claim.

John O’Roarke, Managing Director of LV= car insurance, comments: “Every year there are tens of thousands of staged accidents, which are putting the safety of innocent motorists at risk. Fraud is not a victim-less crime and the cost of paying fraudulent claims drives up the cost of car insurance for all. LV= takes a hard line on fraud, investigates all suspicious claims and pushes for the toughest sentences for those who are prosecuted.”


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Case studies of attempted fraud picked up by LV=’s claims crime prevention team:

  1. The full-car smash and exaggerated car damage claim. An LV= customer had a minor accident with another driver that had three passengers in his car. The accident appeared to have only caused minor damage to the other vehicle as it left the scene. However, when the third party submitted their claim for compensation they sent in photos showing extensive damage to the car, including a smashed rear windscreen indicating the damage had been inflicted post-accident. They also submitted three personal injury claims, even though it was unlikely that the passengers had sustained any injury from the impact. We believe that was an ‘induced’ accident where the fraudsters deliberately targeted our insured in order to get a compensation payout. The claims were formally rejected in writing and the third party subsequently withdrew the claims.
  2. Adding injury to insult: the case of the road rage fraudster who was caught red-faced. Last summer, an LV= customer was returning home when he found a vehicle blocking the entrance to his road. He sounded his horn to alert the other driver to move along, but instead the driver got out of his vehicle and approached our insured and started to assault him. Unfortunately the shock of the attack caused our insured to slip off the brake pedal and accidentally drive into the back of the vehicle. Two days after the accident, the third party tried to claim he had a whiplash injury when he was not even in his vehicle at the time of impact – as he was abusing our insured at that moment! The claim was challenged by LV=’s fraud team and the driver was convicted for fraud by misrepresentation.
  3. The CCTV slam-on. When Mr C, a cash-for-crash scammer, slammed on his brakes in front of a van he did not realise that his antics were being caught on camera. The van belonged to a CCTV installer who had installed a video camera in his rear-view mirror. When the vehicles collided, the camera had a clear view of the inside of the car showing that there was one driver and no passengers. However, when Mr C submitted his claim for compensation, he claimed that there were several other people in the car who were all injured. When challenged with the footage, he quickly disappeared.

Notes to editors

All research unless stated otherwise was conducted by PCP research. PCP interviewed a sample of 4331 UK drivers, 1000 of whom had been involved in a car accident whilst driving in the past five years. The fieldwork took place online between 13-17 January 2014.

[1] According to the latest ABI claims data there were approximately 15,945,000 private car insurance claims in the UK during 2009-2013. LV= estimates that 46% of these were not related to accidents based on analysis of its own claims data, which equates to 8,610,300 (54%) accident claims. It also assumes that two vehicles were involved in each accident on average, which equates to 4,305,150 individual accidents. This is a conservative estimate based on claims data only and does not include accidents that were not reported.

According to PCP research, 7% of those involved in a car accident in the past five years believe the accident was staged and their description of the accident supports their belief. 7% of 4,305,150 equates to 301,361 staged accidents over the past five years.

According to PCP research 4% of motorists who had an accident in the past year say the other driver slammed on their brakes for no apparent reason causing them to crash, this equates to 31,601 accidents.

[2] According to the latest ABI claims data there were approximately 2,926,000 private car insurance claims in the UK in 2013. LV= estimates that 46% of these were not related to accidents based on analysis of its own claims data, which equates to 1,580,040 (54%) accident claims. It also assumes that two vehicles were involved in each accident on average, which equates to 790,020 individual accidents. This is a conservative estimate based on claims data only and does not include accidents that were not reported.

[3] According to PCP research 3% of motorists who had an accident in 2013 say the other driver flashed their lights at them to allow them to merge into traffic and then drove into the back of them, causing them to crash.

[4] According to PCP research based on those involved in a staged accident in the past two years, almost two thirds (65%) of victims were female and 59% were aged 34 or younger.



LV=

LV= employs 5,800 people and serves over 5.5 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trade unions.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.