Telephone 'Cheat Line' Established in Britain to Fight Fraud

The Association of British Insurers has launched a nationwide confidential "cheat line" as part of a crackdown against bogus uninsured motor loss recovery firms. The firms, which deliberately inflate claims for damage to vehicles, car rental costs and bodily injury, are estimated to cost insurers and honest policyholders £30 million a year.

The activities of the bogus companies were revealed in ITV's World In Action television program as a result of a joint initiative coordinated by the association involving insurers and the police. Researchers from World In Action posed as victims of motor accidents to uncover how certain companies deliberately inflate claims for damage to vehicles, car hire costs and bodily injury, sometimes without the claimants' knowledge and sometimes with their help. Dishonest repair shops, car hire operators, solicitors and medical practitioners are also involved. ABI is assembling evidence from insurers to help police investigations.

In one case a repair bill for a damaged vehicle was increased from £950 to £2,100. Instead of being scrapped, the car was repaired and put back on the road. The firm provided a rental car for a week at the cost of £150, but claimed £1,800 for a month's rental. The frauds center on the Northwest, but have been spreading throughout the country.

At a recent meeting of 120 motor insurance company representatives, the association announced a package of measures to tackle the problem and expose similar frauds. These include:

• Detailed guidance to insurers on potential fraud indicators to look out for when dealing with motor accident third party claims.
• Random checks with third parties on the dates of hire and condition of hire vehicles.
• Setting up a free confidential telephone line for people to alert the Association of potential frauds. The cheat line number in the UK is 0800 328 2550.

Tony Baker, ABI's deputy director general, says, "Once we were aware of the problem, it was essential that we acted quickly to stamp it out. The joint approach and months of careful planning between insurers, the DVLA, the police and World In Action shows just how necessary and effective the partnership approach can be in tackling the organized nature of many insurance frauds. The measures we have announced today are evidence of the industry's seriousness and determination to protect the interests of our honest policyholders."