News

Insurance Fraudsters of ‘Crash for Cash’ scheme found guilty

The insurance industry is breathing a sigh of relief after a judge rules in the insurers favour for an insurance scam known as ‘crash for cash’ and people were successfully prosecuted as a result.

The investigation into the fraud cases was initiated after two insurance firms, LV and Esure received suspicious insurance claims which were very similar in terms of their circumstances and claimants to 5 previous accident claims.

Compensation claims were made by 4 individuals after they claimed a taxi was hit side on by another vehicle.  The taxi driver, who was insured by LV, claimed his vehicle was hit side on by another car and needed vehicle repairs and storage, as well compensation for a hire vehicle.  The three occupants of the taxi claimed injury compensation from their insurers Esure.

The two insurance companies involved took particular interest in these claims, not just because of similarities to other claims but also because all four individuals had only just purchased an insurance policy which also raised suspicions.  A forensic investigator had also informed the insurers that it was their opinion that the taxi was stationary when the so called ‘collision’ occurred.

Evidence of fraud mounted further after one of the occupants of the taxi, Farhana Kazami, told the insurers solicitors that the accident never happened and that the claims were false.  LV and Esure turned down all the insurance claims after evidence of fraud mounted as the investigation progressed.  The remaining three claimants maintained their innocence and then issued proceedings against LV and Esure for their losses and the case went to trial.

On receiving the verdict from the judge, John O’Roarke, managing director of LV car insurance said: “This is a case where organised criminals were deliberately staging accidents, putting themselves and the safety of innocent motorists at risk, in order to defraud insurers of thousands of pounds.

“Fraud is not a victimless crime and the cost of paying fraudulent claims drives up the cost of car insurance for all. LV takes a hard line on fraud, investigates all suspicious claims and pushes for the toughest sentences for those who are prosecuted.”
In court it was heard that it would have cost LV in the region of £145,000 in payouts if the fraudulent claims had been successful.  This demonstrates how much insurers lose each time a fraudulent compensation claim goes undetected.

The Head of Financial Crime for Esure, Matt Gilham, also commented after the trial: “Where we have evidence of fraud, we will take steps to pursue the perpetrators whether this is working with law enforcement or using the powers of the court, be this acting alone or in collaboration with our industry peers.”

Following the claimants failed attempt to receive compensation by trial, the two insurers decided to begin criminal proceedings and took the claimants to the High Court for contempt of court.

Only on the day of the hearing did the remaining three claimants plead guilty to fraud and accept the 33 charges against them. Farhana Kazami, the only claimant to admit fraud at the beginning of the investigation, was given a suspended twelve week sentence.  Abdul Jamil and Shamila Saleem were each sentenced to eight months in prison and Mohammed Adris Aziz, the main claimant, was sentenced to six months in prison.

December 4, 2014 in: News
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