Fraudsters KO'd by technical knockout

Foreign drivers are regularly targeted by fraudsters – either to be involved in organised fraud or (more often) by those looking to take advantage of road users unfamiliar with the driving environment and claims processes.

In an ongoing fraud ring, in which a credit hire and claims management company is targeting foreign drivers, it is obvious that those driving and enabling these claims do not really believe insurers and/or the insured will fully support an investigation or provide evidence. Foreign insurers are, however, as willing to fight fraud as we are.

Emboldened by assumption, claimants often litigate but, in doing so, fail to understand properly the fundamentals of the sixth Motor Directive resulting in incorrectly issued claims.

If fraud is an attack on weak process then taking a technical point allows us, in the face of fraud, to make the processing of this claim a little tougher for the fraudster.

An alleged collision

In April 2016 an accident that was never reported to insurers is said to have occurred. The circumstances reported by the CMC on presenting the claim were unremarkable and liability would obviously attach to the foreign insured. However, on further examination the following issues were identified:

– No report of the accident prior to the claim being presented.

– Multiple areas of damage to the claimant’s vehicle which failed to fit the alleged circumstances.

– Discrepancies in various documents disclosed by the CMC in respect to a number of alleged losses.

– Over-valued repair costs.

– Failure to disclose information relating to an (alleged) ongoing hire.

– CHO did not own hire vehicle.

– Inconsistent accounts as to the identity of the defendant.

– Signature discrepancies.

– And other issues that cannot be disclosed that are relevant to other ongoing investigations.

The claimant issued proceedings which were technically deficient and issued in the wrong jurisdiction, which was challenged along with an application to strike out the claim (as the claim offered no reasonable grounds).

The application was successful and costs awarded in the defendants favour pursuant to CPR 44.15. A cross-application was refused. This provided a cost effective and early resolution to the client, saving nearly £40,000.

Using all available tools

Fighting fraud does not need to be a showdown. We always look at ways we can block routes off and make the claims process less hospitable in these types of claim. Insurers don’t take points for the sake of it. In genuine cases early resolution is desirable. Working with insurers to identify those genuine cases is as important as identifying those to be fought.

In acting for foreign insurers we will always pay close attention for technical and procedural mechanisms to make fraud more difficult to execute. A technical knockout is still a knockout.

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