The Insurance Fraud Bureau’s (IFB) statistics from earlier this month reveal that undetected general insurance claims fraud total £2.1bn a year, adding on average £50 to the annual costs individual policyholders face, each year.
Following an investigation carried out by Northumbria Police, with the help of the IFB’s highly-sophisticated counter-fraud software, three men and two women were arrested at an accident management company in Sunderland.
In addition, three homes were searched, and a quantity of cash, jewellery and documentation was recovered, which will no doubt lead to further investigations.
All five were arrested on suspicion of conspiracy to commit fraud by false representation and have all been bailed pending further enquiries, as crash for cash activities, as they are called, cost the UK nearly £400m per year.
If found guilty, the alleged fraudsters will then be ordered to pay Confiscation orders, which will involve a minute inspection of their accounts to find out to what extent they profited from their criminal activity.
Such cases involve long and complex investigations into accounts and can take several years to bring to court but the IFB is determined to send a clear deterrent message to fraudsters targeting the insurance industry.
However, the five arrests are almost certainly a drop n the ocean, as an IBF report from earlier this month revealed that one in 12 people would consider taking part in a crash for cash scam for financial gain.
While the research, which was organised by Ipsos MORI, also revealed that more than half the population think it unlikely that someone perpetrating such a fraud would be caught, which shows just how wrong people can be.
As an accountant; Roger Isaacs specialises within business turnaround and business valuation.