2021-01-06

Credit hire fraud: a paper-based scam

This blog was co-authored by Ian Williams, Litigation Executive, Manchester office.

What is credit hire fraud?

Credit hire fraud, in its purest form, is an entirely fabricated claim. It is no more than a paper-based exercise designed to induce a quick pay-out from an unsuspecting compensator.

It may be that the credit hire organisation simply does not exist as a valid trading entity and certainly has not hired a replacement vehicle to a claimant. Any documents produced are a sham.

However, there are other forms of credit hire fraud that can be a little more advanced and harder to detect:

  • The credit hire organisation is a genuine trading entity but fabricates some invoices having never hired to a claimant
  • The same replacement vehicle is on hire to two unassociated people at the same time
  • Additional damage is caused to a claimant’s vehicle to support a credit hire claim
  • An engineer, with a vested interest in claims management, will produce a report inflating the cost of repairs or the value of the vehicle, to support a credit hire claim.

Credit hire fraud becomes even murkier with the involvement of organised criminal gangs and ghost broking. There are significant sums of money to be made and quickly, especially with so few barriers for entry into the market.

Detection and investigation

The first sign that a credit hire claim may not be genuine could be something as seemingly innocuous as an invoice not appearing professional or missing basic information. It may be as easy as spotting that a repeat offender has returned for another attempt at a fraud.

Once a credit hire claim is identified as high risk, a tailored investigation strategy is needed. The lines of enquiries will vary from case to case but here are a few examples.

Desktop enquires:

  • A cross-hire check reveals that the vehicle is allegedly on hire to two people at the same time
  • A credit hire validation report discovers that a credit hire company is not operating as a valid trading entity
  • A DVLA search on a hired vehicle shows that it has no connection to the hire company
  • An ANPR report on the claimant’s damaged vehicle shows that it remains in use
  • There are links between the claimant and the credit hire company.


Combining the above desktop enquiries with a more direct approach will often get to the crux of the issue:

  • A physical attendance at the premises of the hire company shows no signs of a legitimate business
  • Contact with a claimant discovers that they have no idea about a hire vehicle
  • Surveillance on the claimant shows use of other vehicles
  • Contacting the insurer named on an insurance certificate confirms that the certificate is fabricated
  • An engineer’s assessment of the claimant’s vehicle reveals damage that was not caused in the accident.


Increasingly, securing disclosure of electronic devices such as satellite navigation data, vehicle tracking data and taxi booking applications will assist in defeating fraudulent credit hire claims.

Don’t assume anything

The vast majority of credit hire organisations have no involvement whatsoever in fraud and actively safeguard against it to preserve their business and reputation in the industry.

Then there is the wider context of the accident itself and where the fraud originates. It may be that the accident has not happened as alleged, the claimant is not complicit in the credit hire fraud or the credit hire company are unaware. Even genuine credit hire claims sometimes involve fraudulent behaviours given the significant financial drivers involved.

It is helpful not to make any assumptions when dealing with suspected fraudulent credit hire claims but instead to treat each instance with care.

Perhaps the paper-based scams are easier to detect and defeat but not always. Having a system in place to identify credit hire fraud following by a tailored investigation strategy will enable you to defeat the fraud and validate the genuine claims.

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