Types of 'crash for cash' schemes: how to protect your fleets

‘Crash for cash’ schemes represent a real and growing threat for fleet managers. Here’s how to ensure your fleet vehicles are protected.

Motor insurance fraud is one of the fastest growing categories of insurance fraud in the UK, according to 2019 data from Cifas.

In March, the industry body revealed that fraudulent car accident claims increased 45% year on year- well above an average of 27% across all categories of insurance fraud.

For fleet managers, it’s a bleak outlook, and reflects the growing willingness of fraudsters and organised crime gangs to use any and every technique at their disposal to profit from the motor industry’s blind spots.

One such technique is the ‘crash for cash’ scheme, where fraudsters stage non-fault accidents specifically in order to file insurance claims. According to data from the Insurance Fraud Bureau (IFB), these scams cost the industry around £340 million a year- and anti-fraud experts are discovering new techniques fraudsters use to fabricate or induce accidents all the time.

Below, find out more about the different types of crash-for-cash schemes, as well as what you can do now to protect your fleet against them.

The different types of crash-for-cash schemes

Most experts, including the ABI, agree there are three main categories of crash-for-cash schemes: staged accidents, ghost accidents and induced accidents.

Staged accidents

In a staged accident, crash-for-cash fraudsters intentionally damage vehicles to give the impression that a real crash has occurred. This could involve taking a sledgehammer to a parked car, or even crashing two vehicles together - whatever it takes to fabricate the evidence for a high-value claim.

For an example of how this type of scam can affect fleets, check out our case study on an incident where the damage to a hired Mercedes M Class was shown to be inconsistent with what the claimant reported:

Ghost accidents

A ghost accident is where a fraudster submits a totally fictional claim for an accident that never took place. It’s similar to a staged accident except paper-based, taking advantage of instances where claims are never fully investigated by the affected parties.

Induced accidents

Finally, perhaps the most notorious type of crash-for-cash scheme is the induced accident. This is where the fraudster drives in erratic or manipulative way around other, innocent motorists, hoping to engineer crashes that look to the outside observer like legitimate non-fault accidents.

The most commonly reported technique used by fraudsters to induce accidents is to brake hard while driving in front of another car, causing a rear-end collision. However, experts at AX have also helped draw attention to other, more sophisticated techniques:

• Flash for crash: where criminals flash their lights at junctions to let other drivers out, only to crash into them on purpose. Compared to traditional slam-on accidents, this has the added benefit of making it more difficult for the innocent motorist to prove the crash was intentional in court - it’s often their word against the fraudsters’ that the other driver gave a signal to let them out.
• Hide and crash: where criminals hide in a drivers’ blind spot before moving in front and slamming on the brakes. This is similar to traditional slam-on accidents, but the technique makes it more difficult for the innocent motorist to avoid collisions through vigilance and cautious driving alone.
• Crash for ready cash: a crash-for-cash scheme where the fraudster extorts cash from the driver at the roadside rather than through their insurer, convincing them it’s the cheaper option. Our director of investigative services Neil Thomas has described this as “the modern-day equivalent of highway robbery”.

Tips to protect fleet vehicles from crash-for-cash schemes

So what can fleet managers do to protect their vehicles from crash-for-cash schemes?

As with car theft prevention, asking how to protect vehicles in a fleet context is very different to asking what steps private motorists can take to protect their own property. However, some of the recommendations we would make to commercial and dealership fleet managers would be as follows:

Train drivers to recognise the warning signs

In order to reduce the risk of induced accidents affecting their vehicles, commercial fleet managers should train their drivers to recognise the warning signs of a crash-for-cash scheme.

For example, it’s often possible to identify the cars used in traditional slam-on accidents because they have rear-end damage from previous scams, or because the fraudsters have intentionally disabled their brake lights to increase the chances of an accident.

In terms of behaviour, drivers may also be able to spot a crash-for-cash scheme in progress by watching out for erratic driving and suspicious activity from the person behind their wheel (and their passengers). A fraudster will constantly monitor other traffic, and speed up and slow down in search of potential victims.

Investigate accidents and claims against your fleet

When accidents do happen, it’s vital that fleets are able to investigate them and have evidence at hand to prove fraudulent behaviour from the third party. For individuals and fleets that suspect they may have been the victim of a crash-for-cash scheme, the advice from the IFB is to report this, both to the police and their own Cheatline service, and collect as much information as possible from the scene - including photographs - to act as evidence in a subsequent investigation.

Invest in dashcams, vehicle tracking devices and telematics

Finally, the use of dashcams, vehicle tracking devices and telematics can be instrumental in helping fraud investigators establish how an accident unfolded, and whether that matches the insurance claim, down to the smallest detail.

For example, dashcam footage can be used to demonstrate whether an accident was induced through techniques such as disabled brake lights or the flash-for-cash scam.

Meanwhile, hire car fleets that suspect they may have been targeted in a staged accident scheme can use telematics data to verify whether the damage happened at the time and location reported by the claimant - or if the story, and its evidence, were fabricated.

Of course, as with any telematics use case, it’s important not to assume the technology is a silver bullet in the fight against crash-for-cash schemes. As much as modern vehicle tracking devices are powerful and can collect a vast amount of useful information, making sense of this data - and looking at it in the context of the latest criminal intelligence - takes time and expertise.

For this reason, fleet managers hoping to stem the tide of fraudulent motor insurance claims and crash-for-cash schemes should ensure they also have specialist vehicle crime investigators on their side.