Organized fraud

In 2006, British insurers set up the Insurance Fraud Bureau with a specific target: staged accidents in series, crash for cash, where a driver brakes hard in front of a chosen victim so that the victim rear-ends him, then claims whiplash compensation along with his passengers. Organized fraud, known as hard fraud, covers these claims manufactured from scratch by structured groups that share out the roles. A garage overcharges or certifies repairs that were never done, a false witness backs the story, a clinic or practice supplies the medical certificates, an intermediary recruits straw policyholders and even sells fictitious policies, which is ghost broking. The same vehicle turns up from one file to the next, the same address serves twenty policies. These rings increasingly resemble organized crime in the criminal-law sense: they launder money, recycle stolen vehicles and work several insurers at once so that none of them sees the whole scheme. In France, article 313-2 of the Criminal Code punishes fraud committed by an organized gang far more heavily than simple fraud, and ALFA coordinates the industry's response. Conventional claims handling falls short against them, because each file taken alone looks plausible. What gives the ring away is the recurrence of the same actors, and that is what network analysis and data sharing between insurers try to surface. The investigation then takes months and ends in criminal court rather than under the policy. It is expensive, too: a special investigations unit picks its cases according to what the prosecutor is willing to pursue, and some of the dismantled rings rebuild elsewhere, under other names, with other garages.