Ministers pledge car scam crackdown

CHRIS FISHER, EDP Political Editor Ministers yesterday pledged to get the police and prosecutors to respond seriously to a multi-million pound insurance scam which sees car crashes staged by organised gangs.

CHRIS FISHER, EDP Political Editor

Ministers yesterday pledged to get the police and prosecutors to respond seriously to a multi-million pound insurance scam that sees car crashes staged by organised gangs.

Solicitor general Mike O'Brien told the Commons yesterday that he would be talking to the appropriate authorities and that he agreed with South Norfolk MP Richard Bacon that more needed to be done to check a form of crime that threatens lives and is costing more than £200m a year.

After hearing from Mr Bacon that two prosecutions were in the pipeline but that not a single case has been accepted for investigation by the police in the north of England - where the problem is most prevalent - Mr O'Brien said there were three ways in which induced car accidents could be tackled.

He said the police and CPS had to take action and insurance companies had a responsibility to investigate potential frauds and pass on their evidence to the authorities. The public also needed to be made aware of the way the scam operated and to question whether they had been involved in a genuine accident, he continued.

Mr O'Brien said: “What we are seeing is a growing awareness by the police that this problem has arisen, and I suspect we will see an increasing focus on it in the months to come. We have flagged up with police the need to deal with fraud issues.”

Most Read

He also said that the Fraud Act, which became law yesterday, would offer longer jail sentences for some types of fraud.

But Mr Bacon said that insurance companies had, at times, presented files of evidence to the CPS but “found resistance” to proceeding with the case.

Opening a Commons debate that he had called for, Mr Bacon said that “an induced car accident happens where fraudsters who wish to claim from an insurance company drive motor vehicles to busy road junctions where they perform unexpected, unnecessary and dangerous emergency stops designed to cause innocent members of the public to crash into them.

“Some disconnect the brake lights of their vehicle and then brake sharply in moving traffic once a victim is positioned behind. Others pull onto roundabouts from busy slip roads, then brake sharply once over the line.”

Mr Bacon emphasised that under current insurance law, the fraudsters were given a “virtually automatic” admission of liability from the innocent motorist's insurers.

He said a single collision could net up to £30,000 and that each of 40 gangs operating in this field could stage between 300 and 400 crashes a year.

Calling for the police and CPS to take the problem more seriously, Mr Bacon said: “Insurers believe the proceeds are now routinely being used to fund other forms of serious, organised crime including drug trafficking, people trafficking, money laundering and other frauds.

“It may even be funding terrorism. Induced accident fraud started with predominantly Muslim gangs in the north of England.”