Summary
In this pilot episode of the Morse & Holmes Podcast, Toby Morse (Intelligence Manager) and Paul Holmes (Senior Intelligence Handler) discuss the current trends in relation to motor claims fraud and how they share some of the traits of their fictional namesakes!
Transcript
Hello and welcome to the Morse & Holmes podcast for Weightmans.
This is the first in a series of podcasts in which we're going to be talking about all things insurance fraud. My name is Toby Morse and i'm the intelligence manager for Weightmans, and I'm joined by my colleague, Paul Holmes. Paul is a senior intelligence handler in our intelligence team. Ayup, everybody.
Alright, let's make a start. But firstly, Paul, the name of this series, the Morse & Holmes podcast now, I am absolutely confident that Weightmans employed us for our experience of dealing with and tackling insurance fraud for our passion for it as well. And that is just a complete coincidence that we both happen to share the names of famous fictional detectives.
Yeah, definitely so. But I suppose it's also a coincidence that we've also have a Mr. Bond in our team as well. My name's Bond, Gary Bond. So yes, you you're right. We do like to think of ourselves as a couple of detectives when it comes to fraud, putting all the jigsaw pieces together to make this a complete puzzle for everybody to see.
Yeah, absolutely. Now, listeners to kick off this fraud. Podcast we are going to be looking at the world, of motor claims fraud, and we all know that fraudsters are always changing the way in which they commit fraud to try and keep ahead of the insurers and those investigating fraud.
They just don't stick to one area where they can make money. And for that reason in future sessions of this podcast, we'll talk about public liability fraud, disease fraud, healthcare fraud, housing, disrepair, fraud, and actually all areas of fraud in our industry.
However, motor claims still remains a significant challenge for compensators with motor risks. So this seems like a really good place for us to start. Do you agree with that Paul? Yeah, definitely, indubitably, my dear Toby. Yes, to be a fraudster, I think we need to really think like a fraudster.
Oh really leaning into the Holmes & Morse thing. Yeah, completely agree. I mean the fraud, the fraud statistics for 2020 to confirm that whilst there has been an awful lot of targeted activity against motor fraud. It's still the case that 59% of detected insurance fraud targets, a motor insurance policy. Well, so over half of fraud is to do a motor claims area. That's madness. I know, I've obviously been the press and stuff like it puts an extra 50 quid on people's yearly premium.
But the sheer amount of money insurers pay out from fraudulent claims, but wasn't sure. I thought they may have gone down. Well, that's a lot. It's just maddening, isn't it? To be honest?
And we know that insurers remain under huge pressure in relation to premiums because of, you know, the cost of living crisis, and those sort of issues. And we also know the industry and Government have tried to change things in recent years.
There have been, for example, changes in legislation which have altered the dynamic and the volume of fraudulent motor claims. But as ever, many of those involved in putting in these fraudulent claims have been able to evolve and adapt, to make sure they can still make money. Paul, you've been doing this for a long time. We both have. Do you think the major changes that we've seen in relation to fraudulent motor claims in the past, say, 5 or 10 years.
Yeah, as you say, Toby, I've been doing it for quite a while, I think. I've been in fraud for about over a decade. Now, just like yourself, Toby, again, 20 years have been spent strangely again, in insurance like yourself, Toby. So yeah, quite a lot of experience around all that stuff. So the fraud world, from my opinion, looks like, and it's nowhere where it used to be like, and used to get that traditional car of sometimes 2 cars full of passengers and 3 people in the back, one person passenger seat and the driver. And they were most likely driving a car that's over 20 years old. It's a slight exaggeration, but as long as it's got 4 wheels and moved. I think they what they were driving and what this meant was that these claims actually stuck out for insurance companies.
They were easily identifiable. But one claim will give fraudsters a lot of money. So you're probably looking at about 3K a pop for an injured party, and maybe another 3K for solicitors, and then they've obviously got the rest of the people on the claim on there. So you could be looking at 20/30 grand just on one claim. So everybody on those claims were quids-in, even the Solicitors and an accident management company for all those just on that one claim. So if you do it, you could gonna do it right.
So, however, obviously now moved away from a multiple occupancy, injury fraud, due to the impact to legislation which includes most recently, like the civil liability acts, and the Jackson reforms that helped out a little bit towards this, as well to reduce the amount that insurers will pay it out so some of us listeners, I'm sure we'll be able to recall that multiple occupancy whiplash claims arise from stage and induced and low speed impacts was a real big problem for no insurers, probably from 2010 onwards, which again, not to say we're old. But that really doesn't make me feel old that Toby, I'm sure. It's made me feel really old as well.
So yeah, the OIC Portal as well. That was introduced around May 2021, which meant that if a person was injured mainly, these whiplash type claims they just submit it through this portal without any solicitors help. So really cutting out the solicitor in the claims process of compensation after an accident. They also introduced a steep reduction in the value with these whiplash claims as well, and produced a tariff based system. So you've got things like people that I've got prognosis period, so their injury lasted for up to 3 months.
You were looking at about £240 compared to 6 months, about £495, while previously, as I mentioned before you were looking at about 3 or 4 grand, for simple whiplash claims. So I suspect that this would have helped reduce the amount of these cases, as there wasn't much money in for fraudsters anymore and claims farming probably is reduced as well.
You may notice that you've got less of those phone calls, people asking if you've been involved in an accident. Are you aware your insurance company has put this money aside compensation for you. So again, because of all those reforms come in, this again meant that there's less in it for these accident management companies. These call centres trying to obtain this information and sell it onto solicitors, which this means that fraudsters need to again change their approach to how they go after these claims.
They're just so dynamic aren't they, Paul? Fraudsters and professional enablers are so dynamic when it comes to circumventing the impact of laws and the reforms that have been brought in. So what do you think? Specifically, the motor fraud trends that are on our radar and those of our clients at the moment. So we've seen a lot of claims where, the injured person has said that they've not just got a whiplash side claim.
So, as I mentioned before, whiplash claims go through the OIC portal. So what we see now is that people are saying, they've got something called a mixed injury, which, as it says, it means, is more than one injury that's been caused from the accident. So again, as mentioned, this can't go through the OIC portal. So we're seeing claims against our clients for things like knee and wrist sprains along with
whiplash, and psychological issues. So that means it can not be put through that portal. In some cases the clients are even having claims submitted for noise related issues, such as tinnitus as well.
Yeah, we're seeing a lot of this, aren't we? I mean to me it's all concerning but tinnitus arising from a minor RTA should definitely be subject to some further checks and validation. I think. I mean we are seeing some cases as well, Paul. Noise related cases where there are what appears to me as a non-medical expert to be strange suggestions for further investigation. So things like MRI and blood tests. For a motor claim, that's so mad.
I'm not a medical expert, but I’ve got no idea why those would be needed in relation to the alleged hearing issue from a pretty minor RTA. We've also seen cases where hearing aids for life and tinnitus blockers for life have been suggested, and obviously, you know for our insurer clients that can lead to really significant special damages claims, from a really minor RTA incident.
Yeah, just proving the point there, Toby. They’ve moved from one area to another and they've adapted to the world of fraud. So yeah, you're right. We've seen some concerns regarding the quality of medical evidence, that clients have basically given us. In some cases, I think I saw one the other day where it was a copy and paste of 2 people's medical reports. It was mad.
It's ridiculous. So what sort of advice can we offer listeners in order to guard against high risk and mixed injury claims? Cool, good question. I think the first step is fraud awareness. I think knowledge is power, the more people have an understanding of what fraud is, is basically key.
So making sure that people deal with the claims, the personal injury areas are aware that these are potential key triggers, and we just talked about their mixed injury claims as well. If they could understand these high risk indicators, these things where we can say that it could be a potential fraudulent claim and when you should refer to further investigation. Absolutely, and we both know, don't we, from experience that some of the best referrals into fraud teams, are those ones that are generated by non-fraud area, by just picking up on something that doesn't feel right or potential fraud issue and referring the claims over. I think, in relation to mixed injury claims, teams should be looking for injuries which seem exaggerated in the context of the vehicle damage, and the insured drivers account of the speed, you know, if the insured driver says it was a low speed incident.
As we just touched on further medical tests which just appear unusual, or in congress with the alleged injury, and high value special damage claims.
Because we are seeing £25,000-£30,000 special damages claims, arising from really minor RTA's that are linked to the diagnosis in the medical reports. We've also seen a recent spike of high risk medical reports where it appears unlikely. We think, that the named expert has actually seen the claimant and authored the report.
Yeah, that's been going on for a while that, I’ve seen that before. As you're obviously aware, working in the Intel team. I was also going to say that if you find any fraud on these companies, then we must be intelligence-led, and intelligence needs to be right on the front end, because if it's there and we can identify it before it gets anywhere, then it's gonna obviously help our clients out.
So it's about understanding who the high risk players are and making sure that the claims involved in those entities are flagged for further review, basically. So it's about us having a robust process to challenge those claims, such as asking questions of claims experts which is so often done, and obtaining our own evidence and other lines of inquiry. Just because a medical expert has said that this is the case, we can still obviously go after and get our own expert to see if that information's correct.
Definitely, I also think it's a good idea for fraud and intel teams to exploit other skills and knowledge that might exist in their business when it comes to unexpected injury claims. So, for example, we've obtained great intel, haven't we Paul, from the Weightmans disease team? Who have huge experience in dealing with noise-induced hearing loss claims, normally, employment-related noise-induced hearing loss claims.
So they've got a really good handle on the high-risk entities that are involved. As well as some of the sort of tactics to deploy and the pitfalls to be aware of, and we've been able to utilise that intelligence and we've been able to apply that experience to dealing with the RTA hearing-loss claims. Yeah, yeah, definitely, experience from one area to another can help someone else out. So that's good, obviously a good thing about our businesses, we have got a lot of different areas that we deal with.
So as our head of fraud, Mike Brown, says "collaboration is key". Fraudsters will move from one area to another, so we all basically need to work together. That is what intelligence is about, that collaboration and working together to meet that ultimate goal of detecting and preventing fraud. Other areas of businesses can be a great source of intelligence, as you just mentioned there from our disease team. And know your opponent and handling strategy, which obviously it'll help with dealing with claims.
Pretty great. Paul. Talking of the head of fraud, and I almost forgot. Listeners, we'd love to have some guest speakers on this pod in future episodes. And talking about fraud, Mike Brown, if you're listening, you may well be the first victim for this. Yeah, that definitely sounds good that, Toby. I've worked with Mike, for over 12 years and he's got a lot of experience around fraud in the industry of regulations.
He’s also got a big passion for fraud. He’s been doing it for a long time. And he still is happy dealing with what he's doing now. He’s also an ex copper, so he does like to get involved in all this sort of stuff. Any other trends you think we're seeing? Yeah, I mentioned before about the medical reports, thinking about it now about the cut and paste, and about amending these documents. We have actually seen quite a few fraudulent repair documents related to prestige vehicles.
Yes, and we have a recent hot off-the-press example of this, don't we? So we recently had a case where a fabricated engineers report was presented in relation to a third-party claim. So at first glance the report seemed okay, appeared to be from a provider who works for various different insurers.
The report effectively classed the claimant's vehicle as a total loss, with a value of nearly 50k I think, Paul? Yeah, I remember this when it was that it was a really nice car, but I can't remember the name. It was a really nice car, I remember looking at the pictures.
Yeah, it was. What we've been able to demonstrate is that the engineer's report that has been provided, is a completely fraudulent document. We've been able to pull it to bits, haven't we? Effectively, we now know that that document has been used multiple times for multiple, probably fraudulent claims. Actually, the instant we're dealing with, it's almost definitely, entirely contrived.
Yeah, no, definitely. It was a really good one that one, but what it should show the listeners is how easily accessible tech is these days. Years ago, again, when we probably started in fraud, there wasn't a lot of that technology around. But now it's really easy to actually make something relatively easily, and a relatively convincing as well, which includes images. You can amend images as well now, with very limited tech as well. Even the limited tech is still pretty good in order to produce a repair auto lost claim.
And this is the thing isn't it, Paul? You know it's always the sort of path of least resistance sometimes for fraudsters. Because there's been legislation in the whiplash space,they sort of loop back around to fraudulent bent metal claims. To be honest, they're not new methods. They're actually straight out of the fraudster's playbook. I think, for compensators, it's all about awareness. As you say, it's about intelligence. You know, making sure that frontline teams have regular fraud awareness training, and that they're aware of those kinds of telltale indicators that a document or an image might not be what it appears.
Yeah, true. This is a big subject, Paul. What about credit hire claims, what are we seeing and what are our clients seeing in that area? How long have you got with that, Tony? We've got a lot to get though, a lot of instructions to have a look at some credit hire claims. So I think we probably could do a whole episode solely on the credit hire area. Maybe even get one of the hire guys in and talk about things they look out for, within fraud as well as non-fraud areas. I think the main thing though that I can see when I do these reports for people, or read these reports in credit areas, is that when they have fraud concerns on credit hire claims, it's normally an exaggeration of the credit hire claim, and claims that may emanate from induced accidents. Cross-hire is sometimes a concern, I haven't seen it that often though. It does involve the credit hire organization.
Obviously, some people might be quite shocked at this, but they are hiring the claimant a vehicle from a mainstream provider, rather than their own vehicles. They then present the claim as a credit hire claim. I was looking at one, I think it was last week, Paul. This was the issue on it. It was a case of cross-hire. The credit hire firm was hiring the claimant a vehicle from a mainstream provider, and then passing the costs on as a credit hire, but 5 times the source cost.
There were also some concerns about the add-ons like, you know, collection and delivery, and whether or not they were actually chargeable.
There's a lot more detail to that case, but I think I'll hold that back. So yeah, we see claims where this significant uplift in the higher cost when compared to the original source costs from the hire company. As well as, as you've said these unjustified claims for add-ons like storage, recovery, and excess waives if they have an accident in that hire car.
So in addition, we've also had the experience of hirers not being aware of the nature of the hire claim and the credit hire organisation involvement. So they'll just rock up to a hire company, thinking they are hiring a car from a high street company and not actually knowing they're actually in credit hire from a big firm. So there's that part of it. Then you've also got on top of that, these high-risk moped claims, which listeners may have seen in the news.
So mostly in the London and southeast area. But as I said, I'll stop there cause I could talk all day about this. The podcast will end up longer than we expected.
We absolutely will do a future session on high-risk moped claims. Because we know that it remains a huge challenge for our motor clients.
But listeners, this is all we have time for today. I'd like to thank you for listening. I hope you found this episode of the Morse & Holmes podcast to be useful and informative.
We're really keen to hear from you. If you have any questions on the content of today's episode, any suggestions, or requests for future sessions, you can contact us at intelligence@weightmans.com, but bye, for now, thanks for listening. Yeah. See you later. Thanks very much. Bye-bye.