In dawn raids across north London last week, accompanied by The Sunday Times, police arrested five men thought to be responsible for staging at least 57 crashes, for which they claimed around £500,000.

One man, arrested in his underpants, is believed to have used 15 aliases to open bank accounts, obtain credit cards, rent cars and file insurance claims, and to hold driving licences in two different names.

The operation by City of London police, codenamed Phantom, is the first in a series intended to halt a wave of 10,000 fraudulent accidents per year. Insurance firms pass on losses to honest motorists in increased premiums.

The London gang is alleged to have made false claims for accidents that never happened, or for staged accidents involving a supposedly high-value car that was in fact already a write-off.

In a staged accident, both drivers are gang members, with the driver of the less valuable car accepting liability for writing off the other.

Other cases involve “slamming”, in which gang members cause an accident involving an innocent motorist then use accomplices as “witnesses” to claim it was the other driver’s fault.

Gang members typically target a smart family car because they know it is likely to be properly insured. They drive in front of it before slamming on their brakes — possibly after disconnecting their own vehicle’s brake lights — causing the target to crash into the back of the gang’s car.

The London gang allegedly used a series of cars it claimed were high-value vehicles and fraudulently said they had been written off in accidents. Claims included £10,137 for a Mercedes 300, £8,693 for a Mazda MX-3 sports hatchback, and £4,176 for a Ford Mondeo saloon.

A typical example was the use of a Volvo in an alleged crash with a BMW X5 on the A40 on August 10, 2005. According to the BMW policyholder, he was driving through heavy traffic into London when he collided with the Volvo. Two weeks later a £4,176 claim was made under the BMW’s insurance for the total loss of the Volvo.

The BMW’s policy with Direct Line was only eight days old, while the Volvo was covered by Churchill Insurance and there had already been a claim on it two weeks before.

The address for the Volvo’s owner also appeared in multiple claims, but under different names and for different cars. A further check showed that the Volvo had appeared in claims filed in December 2004 with Tesco, in March 2005 with Axa and in May with Esure.

Soon after the accident, the owner of the BMW sold the car. DVLA records reveal that the new keeper shared the same address and phone number as the owner of the Volvo.

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