For many years now insurers and paying customers have been acutely aware that fraud has had a major impact on premiums and profitability. This fight continues and motor insurers now want to share data from suspected fraud at the application stage, as criminals try multiple submissions to get cheap short term car insurance to get vehicles on the Motor Insurers Database. The Fraud Investigation bureau has advised Post magazine that that it will commence dialogue in 2012 with potentially a new system in place before the introduction of the Insurance Fraud Register in July. So that they can confirm the driving licence details of any policyholder, the Insurance Fraud Bureau is also trying to secure insurer access to DVLA information.

Separately, it is thought that a number of insurers that provide 1 day car insurance or more, are vying to launch a no claims discount register to give insurers the opportunity to cross check declared claims free years, as this has a major impact on premiums.

Application fraud has been described as the new “crash-for-cash”. This is because the number plate recognition system currently being used by the police has proved very successful, so fraudsters need to have their vehicles legitimately registered on the Motor Insurers Database to avoid detection and suspicion. They buy the cheapest car insurance they can, giving completely false details such as age, use of the vehicle, occupations etc to bring the premium right down. These criminals attempt multiple applications, varying each of the details in a bid to find the lowest possible premium. Cheekily these gangs then share their data with other fraudsters on social media sites. A similar sinister technique is also used by “Ghost Brokers”, those that sell cheap insurance to vulnerable groups of people that would otherwise pay a very high premium, such as young drivers. They too pass on incorrect details deliberately to insurers, but on the face of it, the details would seem legitimate.

Insurers are now wising up – apparently one particular applicant had applied for over 60 polices in various guises then had the tanacity to ring the insurer concerned to establish why he was being blocked off their site! Of course, it was never established as to the true indentity of the individual.

It is important for insurers and anti-fraud organisations to publicise their pro-activity to give some comfort to honest paying policyholders and that they are being pro-active in defeating those criminals who have no regard for the knock on effect of their actions. Can fraud be eradicated entirely? No, but if it can be made as difficult as possible, hopefully it will be kept to a minimum. The fight goes on….