Tackling crash for cash insurance fraud

What is crash for cash insurance fraud?

‘Crash for cash’ is the term commonly given for incidents where people deliberately stage or cause a road traffic collision for the purpose of financial gain. Ask the Police, an official resource on policing questions, describes three types of crash for cash fraud:

• staged accident – someone makes an insurance claim for an accident that they have deliberately staged with another person
• ghost accident – someone makes an insurance claim for an accident that never happened
• induced accident – someone makes an insurance claim after intentionally causing a collision with an innocent motorist

Crash for cash scams usually centre around making fraudulent insurance claims, based on personal injuries and damages that did not occur. Pay-outs can be increased by making up or exaggerating injuries or lying about the number of people in the car at the time of the accident.

What is the scale of the problem?

Official crime statistics are not published at a level of detail which allows the identification of the number of crash for cash offences to be determined. These are currently published within the “insurance related fraud” category - there were around 13,700 offences recorded in this category by Action Fraud, or referred to the National Fraud Intelligence Bureau, in England and Wales during 2023.

The insurance industry provides some estimates on the number of claims that are related to crash for cash. For example, the Insurance Fraud Bureau, a not-for-profit company that coordinates the industry response to insurance fraud, estimated that around 170,000 car insurance claims between October 2019 and the end of 2020 were linked to crash for cash fraud schemes.

It has also estimated that annually there are 69,500 personal injury claims linked to suspected crash for cash scams (PDF) (costing the insurance industry £392 billion a year), though no particular year is given for this information.

What are the police doing?

The City of London Police acts as the lead force for fraud across England and Wales. It hosts both Action Fraud and the National Fraud Intelligence Bureau, which are responsible for receiving and assessing reports of insurance fraud.

City of London Police also hosts the Insurance Fraud Enforcement Department (IFED), a specialist policing unit that leads investigations of insurance fraud. It was first established in 2012 and is funded by the Association of British Insurers. The IFED receives referrals through Action Fraud, National Fraud Intelligence Bureau and directly from insurers. It works with police forces and Regional Organised Crime Units through the UK. The Home Office has stated that the IFED “works tirelessly to bring ‘Crash for Cash’ criminals to justice”.

What is the Government doing?

The Government has conducted recent work on addressing fraud generally. For example, as committed in its fraud strategy, it has now appointed 400 specialist investigators across the National Crime Agency, City of London Police and Regional Organised Crime Units as part of a “national fraud squad”. It has also created a new voluntary post of Anti-Fraud Champion (currently held by Simon Fell MP).

The Government’s fraud strategy also committed to invest £100 million in fraud enforcement efforts before 2024/25 and committed to replace Action Fraud to make it easier for people to report suspected fraud.

However, the Government’s fraud strategy does not specifically mention crash for cash insurance fraud and the Government does not appear to have recently conducted specific work in this area, since it established an insurance fraud taskforce in January 2015, with membership from the insurance industry, Financial Ombudsman Service, Citizens Advice, as well as HM Treasury and the Ministry of Justice.

What is the insurance industry doing?

The insurance industry provides funding for both the IFED, the specialist policing unit that leads investigations of insurance fraud, and the Insurance Fraud Bureau (IFB). The IFB was established in 2006, in response to an increase in crash for cash fraud. It operates a phoneline for people to report suspected insurance fraud and works with the IFED to bring prosecutions for insurance fraud.

Additionally, insurance firms fund the Insurance Fraud Register, a database populated with details of insurance fraudsters.

There has been some criticism of certain activities by insurance companies when dealing with potential crash for cash fraud. Consumer website Which? reported in August 2023 cases of members who believed they were victims of the fraud, saying “insurers need to do a much more thorough job of investigating claims with dubious evidence”.