As expected, during the COVID-19 pandemic the number of Motor Claims in the UK has fallen significantly due to the reduced number of vehicles on the road. However, according to the Association of British Insurers, motor insurance frauds were up on the previous year by 6%, around 75% of which contained an element of personal injury.
Early investigation essential
Insurers will wish to settle the genuine claims as soon as possible. Early intervention is beneficial to both parties, as it not only provides the claimant with the financial, medical, and rehabilitation support they require but also keeps costs to a minimum for the Insurer. It is, therefore, crucial to validate the claim in terms of indemnity, liability and fraud concerns as soon as possible. Even if a claim has not been intimated by the third party, Insurers will still wish to investigate, secure evidence and obtain information relating to liability and severity of injuries, for them to hold an accurate reserve. This is commonplace, for example where a pedestrian or cyclist is involved.
Ideally, an investigator should be instructed immediately following notification of a claim, to secure evidence in the form of statements from both the policyholder and any witnesses who will be more likely to cooperate within a short period of the accident, and their recollection will be much clearer and more detailed. If an instruction is received several months following an accident, it is far more likely that the witness will have changed address or is less keen to cooperate as they may have already provided their account to other interested parties. The policyholder may also have relocated and potentially changed insurers and will therefore be harder to track down and less interested in assisting. In terms of locus inspections, it is also beneficial to see the accident locus in similar conditions, in relation to weather and lighting, which means attending at a similar time of year if possible. The road surface and road markings may also change if a long period has elapsed. Any CCTV or dashcam footage also needs to be secured at the earliest opportunity, as most systems automatically record over the previous recording after a certain length of time, or when the storage becomes full.
Some examples of fraud on the part of the policyholder are failing to disclose motoring offences and convictions; ‘fronting’; modification of the vehicle and change of circumstances. The policyholder may also be a victim of fraud involving ghost Brokers; staged accidents; induced accidents; and ghost accidents.
In terms of the investigation, standard enquiries include interviewing and obtaining detailed statements from the policyholder or named driver in charge of the vehicle at the time of the accident, concerning the events leading up to and following the accident, and in respect of indemnity. Enquiries are also made with the Police and DVLA. Signed mandates providing permission will be obtained in this regard.
We will also inspect the accident locus and provide a locus report to include sketch plans showing the road layout, road markings, movement of vehicles, and the points where the images were taken. A detailed investigation report will provide full details of our investigation into both indemnity and liability, photographs taken at the time of the investigation together with signed CPR format statements from the policyholder and any witnesses.
If the vehicle has not been recovered for repair, then we will also provide photographs of the damage or lack of damage as the case may be. We will also endeavor to secure CCTV, dashcam footage and black box recorders. Where appropriate we can reconstruct and video the path, view, and conditions from both the policyholder’s view and that of the third party. This is especially useful for roundabout collisions or places where it is dangerous to stop.
Google Earth can also be a useful tool for images and approximate measurements in this regard. We will also obtain a sketch plan from the policyholder and witnesses. We can provide video evidence and timings of traffic light sequences where one party alleges the other has jumped the lights. In addition, we will make enquiries into the history of the vehicle to include MOT, servicing, and the purchase of the vehicle where necessary.
Insurers will have access to shared anti-fraud databases. However, access to some of these can only be obtained in certain circumstances, due mainly to restrictions imposed under the Data Protection Act. The databases include Claims Underwriting Exchange (CUE); Insurance Fraud Register (IFR); Motor Insurance Anti-Fraud and Theft Register (MIAFTR); My Licence Database; Motor Insurance Database (MID). The Insurance Fraud Bureau (IFB) also assist insurers to identify fraud and avoid the financial consequences, in addition to supporting the Police.
If required we can provide services in terms of open source intelligence; track and trace enquiries to trace policyholders, third parties and witnesses; and carry out cold calls should Insurers be unable to obtain a response to telephone calls and letters, etc. We can also provide surveillance services to obtain video footage in order to evidence a claimant exaggerating or fabricating their injuries.
With over 30 years of experience as an Insurance Claims Professional; Liability Adjuster; Operations Manager; and Professional Investigator, the writer has seen almost every kind of insurance fraud. Insurance fraud can range from: inventing and exaggerating claims or deliberately and recklessly providing false information when applying for insurance, to organised crime gangs involved in ‘crash for cash’ motor fraud scams.
Fraudulent claim by employee
One early example comes to mind from working as a Liability Adjuster, whilst not motor related, it is relevant in terms of the investigation. We had received an employer’s liability claim where an employee alleged that he had an accident at work. The manager, who the claimant maintained he reported the accident to, had no recollection of it and there was no entry in the accident book. An accident book later turned up with a single entry, despite numerous accidents having occurred either side of the date in question, being entered in another accident book.
The claimant alleged that he had injured his shoulder during his duties, however, we had intelligence that he had been moonlighting as a nightclub ‘bouncer’ and had injured his shoulder during a scuffle. We requested the claimant's authority to access his medical records via his solicitor and the records confirmed his attendance to his GP following the alleged accident at work. However, the notes recorded the date as being on a Sunday, which raised suspicions. We, therefore, contacted the GP to review his notes. The GP advised that whilst he could not recall seeing the claimant and it would have been unusual to have seen him on a Sunday, as the notes were in his handwriting, he must have seen him and perhaps the date was a mistake. We still had our concerns, so we took the unusual step of sending the notes to a handwriting expert who worked for the Police. He analysed the notes and concluded that they had been forged by using computer software to replicate words from other notes to make up the new entry. The expert came to this conclusion as the repeated words within the notes were identical and in his expert opinion, it would be impossible to mimic the exact form of the word each time.
Further enquiries revealed that the claimant had a friend who worked in the Doctors surgery who had colluded with him in obtaining the notes and planting the evidence. When presented with the evidence, the claimant's Solicitor advised that they were no longer acting for their client. Unfortunately, this was prior to the Fraud Act and the Police with limited resources were not interested in taking any further action in the matter. Despite not insubstantial costs incurred in investigating the matter, the insurers were able to close their file, knocking off a hefty reserve in the process. Quite an elaborate fraud, however in our experience, it’s the fine details that trip the fraudsters up in the end!
A more recent case emphasises that as investigators, we should never have preconceptions and should always keep an open mind. Our initial instructions were in respect of a road traffic accident (RTA), as a result of which the policyholder had been banned from driving for a year due to driving under the influence of drugs. The incident occurred at 2am and a passenger in the third-party vehicle was reported to have sustained serious injuries. You may be forgiven for predicting that the policyholder would be at fault, however, on this occasion this was not the case.
Following a full investigation, it was established that the third party was entirely at fault. He was driving at an excessive speed around a sharp bend and lost control colliding with the policyholder’s correctly proceeding vehicle. This was evidenced by the tyre marks and photographs taken post-accident where the vehicles came to rest. The third party was breathalysed at the scene and was found to be more than 3 times over the legal alcohol limit. He was also banned from driving.
Adapting to COVID
Due to the restrictions of the current pandemic, most statements are being taken either via video conferencing services or by telephone. However, under normal circumstances, there is no substitute for a face-to-face interview as you can build a rapport with the interviewee, and survey their surroundings and assess the property in terms of indemnity issues such as where the vehicle is kept, etc. Whilst interviewing via video conferencing is the best alternative, interviewing someone you have never met before with a blank wall behind them with a list of questions can seem more like an interrogation. You will be surprised at what additional information will slip out when using soft skills in a more relaxed manner. Body language can also reveal a great deal. Following an interview, in-person an investigator should be able to provide an opinion as to whether (or not) they believe the interviewee would make a credible witness should the case progress to court.
General indemnity themes include false information regarding where the vehicle is kept overnight, non-disclosure relating to driving convictions / criminal offences, ‘fronting’, and the last person in charge not being named on the policy.
As a brief example of fronting, we interviewed an 18-year-old named driver, who was driving the vehicle at the time of the accident. When asked what percentage of time she used the vehicle and what percentage the policyholder (her Father) used the vehicle, she confirmed that she drove the vehicle 95% of the time and used it to commute to and from work each day. The V5C document confirmed that she was also the registered owner of the vehicle. We also established that the policyholder had his own vehicle.
Even in cases where liability is not in dispute, causation of the claimant's injuries can be an issue. As a final example, the claimant allegedly suffered a soft tissue injury to his back as a result of an accident. The medical expert prepared a report based on his examination, a review of medical records and a history provided by the claimant. The claimant advised that he was in severe pain, found it difficult to walk and was essentially housebound. He was off work as he was unable to perform his duties. The medical expert concluded that in his opinion the claimant's symptoms were so serious that he did not believe he would ever be able to return to his current employment and he also doubted that the claimant appreciated how significant his injuries were.
Insurers had an exceptionally large reserve on the case; however, they were not convinced that the accident could have been causative of the claimant's injuries. We, therefore, arranged static surveillance outside the claimant's property. A few days went by without the claimant being seen leaving his home, which was consistent with being housebound. However, the surveillance continued for a few more days and to the surveillance operatives’ surprise the claimant was seen walking along the side of the property carrying a car door, negotiating some steps down to his car which was parked on street. He then continued to work on the car, replacing the door without any visible signs of discomfort or restriction of movement, even getting down into the footwell of the car.
The video evidence was later submitted to the medical expert who advised that this could not have been the man that he saw, and the only explanation could be that he had a twin brother. Of course, the claimant did not have a twin brother, but was well versed and rehearsed in exaggerating and faking injuries. However, the claimant was clearly not prepared to stay in forever and dropped his guard.
Any investigation must comply with both civil and criminal Law, not only to justify the methods used and to protect innocent parties and avoid prosecution, but also to be admissible as evidence. A Legitimate Interest Assessment (LIA) and Data Protection Impact Assessment (DPIA) must also be completed, in order to comply with the General Data Protection Regulations (GDPR) and the Data Protection Act 2018.
When hiring an investigator, whatever the specialism required, it is always advisable to ensure they have the requisite skillset, qualifications and insurance. The simplest way to do this is to check that the investigator is a member of the Association of British Investigators. www.theabi.org.uk By instructing an ABI member you will have the assurance that they have been DBS checked, have demonstrated the necessary qualifications or industry experience; are financially stable; have demonstrated their professional ability to the high standard required; have passed the scrutiny of an interview panel; are registered with the information commissioner’s office; have appropriate professional indemnity insurance; can be further held accountable for their actions through the Association’s robust disciplinary system. Further, the ABI is the only association in this industry to be recognised by the Law Society of England and Wales, and included in the Law Society of Scotland's approved Supplier Scheme.
Article submitted by Full member (F2138) – Justin Inson