Insurance fraudsters are becoming more brazen in devising bogus claims. The most recent phenomenon, according to the Insurance Fraud Bureau (IFB), is the “crash for cash” car crime.

The perpetrator targets an innocent motorist, often someone seen as vulnerable, such as a mother with children in the car or an elderly driver. The fraudster creates an accident by braking suddenly so that the victim’s car shunts his car from the rear. After insurance details are exchanged, the scammer bills the insurer for a rash of injuries that were never sustained, even inventing apparently injured passengers.

The IFB, funded by insurers, was set up in 2006 to fight fraud. That year, it set up a “Cheatline” telephone service for tip-offs about suspect claims. It has since received more than 2,000 reports.

Car insurance fraudsters claim for the theft of vehicles that they have sold or deliberately damaged. In a crackdown by insurers last year, cases discovered included a policyholder who claimed that his car had been stolen after a mugging when he had sold it to a friend, the Association of British Insurers (ABI) said.

One client pushed his car off a cliff to claim insurance money; a newspaper photograph identified the date of his misdemeanour. Another driver set light to his car, before claiming it had been stolen.

In general insurance, the most common fraud involves damage to household goods. The ABI says that typically a homeowner will spill liquid, such as paint, on a carpet deliberately and claim for a replacement. Clients will even claim for illegal goods. Insurers have had cases of policyholders claiming as stolen DVDs that were yet to be released in Britain.

Another common fraud involves false claims for personal injury. Unfortunately for the scammers, their frauds are now more regularly exposed when camcorders record supposedly crippled claimants dancing merrily at parties.

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