Various methods are used to create an incident which results in the victim believing they were at fault and admitting responsibility. One scam involves the perpetrator braking suddenly on a clear road or roundabout sometimes using the handbrake so there are no warning lights.
Sgt Mark Beales, from Greater Manchester Police, said the criminals often choose their "victim" drivers carefully. "What these fraudsters tend to pick on are people who are single mums or elderly people, people who are less likely to cause them any issues. They also target drivers of commercial vehicles, because drivers tend not to care as much if they're not driving their own vehicle," he said.
In addition to claims for damage to vehicles, the scammers are known to feign injury and have the fire brigade cut themselves from the car to lend weight to their claims. In one case highlighted recently a man was convicted and sentenced to a two-year jail sentence, with 12 months suspended, after admitting staging a series of crashes. Abdullah Ahmed used his black Lexus in three staged crashes and as well as attempting to claim for damage and injury, he alleged his victim had racially abused him. He even tried to claim for storage costs but police found he had been driving the car since the 'accident'.
Earlier this month two men, 35 year old Rehan Javed and his brother Rezwan, 33, from Burnley in Lancashire, were convicted of running a £12 million scam. They had even processed many of the claims themselves using their own claims management company. And last year 24 year old Mohammed Patel was jailed for four and a half years after being found guilty of staging 93 'accidents' [Daily Mail].
The rise of such incidents is becoming increasing concerning for police who believe staging such crashes could lead to real injury or even death of those targeted. In the US fatalities have already been recorded after staged crashes went wrong. "Staged motor accidents are on the rise and are potentially extremely dangerous. Not only do they cost honest drivers millions of pounds each year but they also put innocent motorists in danger," John Beadle, Britain's Insurance Fraud Bureau [IFB] chairman, told the BBC in 2007. Some scammers have even invented secret codes to identify each other, such as tying coloured ribbons to car aerials, to show a willingness to take part in fake crashes as the Guardian reported in 2005. But it may not always be so obvious.
Some of the staged crashes can be far more involved than simply braking in front of a victims vehicle. One such scenario has been called the 'swoop and squat.' The first car 'swoops' in while the second car 'squats' in front of the victim. After the 'accident,' everyone in the car the victim rear-ended (usually crammed full of passengers) will file bogus injury claims with the victim's insurance company. They will often complain of whiplash or other soft-tissue injuries. Such injuries are difficult for doctors to confirm. The fraudsters may even acquire the services of dishonest physical therapists, chiropractors, lawyers, or auto repair technicians to further exaggerate their claims.
As well as the so called 'swoop and squat' there are several other scenarios which motorists need to be aware of. There is the 'drive down' where a motorist is attempting to merge and another driver waves the victim forward. But instead of letting the motorist in, the fraudster slams into the victim's car. If the police arrive, the scammer will deny ever motioning to the victim.
The 'sideswipe' is sometimes used. As the victim takes a corner at a busy intersection with multiple lanes, they may drift slightly into the adjacent lane. This is where the fraudster will strike, accelerating in that lane and sideswiping the victim. The t-bone may be employed at an intersection. When crossing an intersection, despite having right of way, a fraudster may target the victims car by accelerating into it. When the police arrive, the driver and several planted 'witnesses' will claim that the victim ran a red light or stop sign.
In the United States staged accidents cost the insurance industry at least $20 billion a year. and as seen in Britain these losses are passed on to motorists in the form of higher insurance rates at an average of $100-$300 extra per car per year.
Now Britain is seeing a rise in this type of fraud. Birmingham tops the list of fraud hot-spots according to an insurance industry-funded report. Until recently the claims were largely confined to north-west England, and the other four top spots for insurance fraud of this sort were Liverpool, Blackburn, Manchester and Leeds. But the scams now appear to be moving south, with parts of London in the top 10 for the first time. East London takes sixth position while north London is in ninth position.
Advice to motorists caught in such an accident is to stay calm, not to accept liability and, if possible, to record photographs of the other driver and any other passengers in the car on a camera or mobile phone. In the US authorities also advise calling the police immediately, even if damage is minimal. A police report makes it more difficult for a stager to intentionally damage his or her car later in order to collect a larger claim against a victim's car insurance company. In addition it is important to report accident claims to your insurance company and not to settle at the scene with cash. Be careful with your personal information, since identity theft can also be an added risk.
But it is better to avoid such incidents altogether. While not entirely impossible there is some basic advice for motorists. Don't tail gate and drive safely. Diving with a mobile phone in your hand is dangerous enough, but fraudsters may take advantage of such behaviour. Young women and older adult drivers are often targeted as they enter or exit a shopping mall or car park, so be doubly cautious at these locations.
As well as the accident risk there have been other scams employed at crash scenes. A stranger may approach victims, or telephone them after the incident. Regardless of whether a set-up or honest accident, the stranger attempts to convince the victim to get repairs at a specific auto-body shop, seek treatment from a certain doctor or chiropractor, or visit a suggested lawyer who can help you sue for injuries. Be careful, this too could be a scam. The body shop may try to illegally pad your repair bill. The doctor or chiropractor may give poor or no treatment, but invoice the insurer for large sums of money. The lawyer may encourage the victim to sue the auto insurer for thousands of dollars even if minor or no injuries have resulted.
In Britain those believing they have been a victim of insurance fraud can call the IFB's cheat line on 0800 328 2550. If you suspect that you've been a victim of or witness to a staged accident in the US, you can report it anonymously through the NICB website, or by calling the toll-free number (800) 835 6422 or by texting your information to TIP411, keyword "FRAUD." [BBC / BBC video / About Crime / FBI / Bankrate / Insurance Fraud]
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