Episode 8 Claimed and Shamed

Insurance fraud in the UK has hit epidemic levels.

It's costing us over £1 billion every year.

That's almost £3.5 million every day.

Deliberate crashes, bogus personal injuries,

even phantom pets.

The fraudsters are risking more and more to make a quick killing,

and every year it's adding over £50 to your insurance bill.

But insurers are fighting back,

exposing just under 15 fake claims every hour.

Armed with covert surveillance systems...

Subject out the vehicle.

..sophisticated data analysis techniques...

..and a number of highly skilled police units...

Police, don't move, stay where you are!

..they're catching the criminals red-handed.

Just don't lie to us.

All those conmen, scammers and cheats on the fiddle are now

caught in the act and claimed and shamed.

The Met traffic unit raids a fraudulent claims management

-company.

-The lengths people will go to get some money

out of the insurance company, you know

putting themselves at risk. I think it's extremely frightening.

WATER way to make a false claim for a lost phone.

Whilst these stories and these tales, you know, are mythical,

they're fairytales, basically.

And a fake injury claim is dealt a knockout blow.

The claimant was making up pretty much all of his evidence.

In recent years, insurance companies have realised

the importance of working together to combat fraud.

The Insurance Fraud Bureau, or IFB, was formed to help share

information, work with the police and stop fraudsters in their tracks.

They think they're just committing a few frauds

and it's going to go unnoticed amongst the entire industry.

The reality is that the IFB has in excess of 140 million

documents from claims and policies across the industry.

We analyse those and we're looking to find the trends

and patterns that fraudsters are trying to hide from us.

One such trend involves claims management companies.

These businesses process insurance

claims on behalf of the general public.

Unfortunately, claims management companies are very frequently

exploited by criminal gangs.

Out of all the alive investigations the IFB currently

have, around a half of those investigations have a claims

management company at the core of what they're doing.

These fraudulent claims management companies make

money by deliberately causing or inducing accidents.

Induced accidents, being where you take a vehicle out onto

the road and you don't have an accident, you actually

purposefully create a collision by stamping your brakes

on in front of an innocent member of the public.

This is how it works.

First, the gang choose a victim.

Then they move their two cars into position in front of the target.

Gang car number one then slams on its brakes. Gang car two

reacts by braking hard, resulting in a rear end shunt from the victim.

Gang car one then turns off at the next possible turning,

pretending to be unaware of the crash.

Leaving the victim supposedly at fault for the damage to gang

car two.

The fraudulent claims management company then processes

the claim and exaggerates the amount of damage

and injury in order to get more compensation.

But all that's about to change.

The fact is, with our data on the scale that we have and state

of the art technology, there is no longer anywhere for them to hide.

It's not just the IFB who has them in their sights.

It's frightening the amount that is actually being committed,

the level, you know, the lengths people will go to get some

money out of the insurance company. You know, putting themselves at risk.

I think it's extremely frightening.

DI Dave Hindmarsh heads up the Metropolitan Police's roads

and transport policing command.

His team has built a strong reputation for detecting this

type of organised fraud.

One of their most notable successes was a North London outfit.

At around about November 2011,

Kami Claims Management was,

was flagged to us through intelligence

policing as a company which was a claims management company and were

suspected of deliberately causing crashes with innocent road users.

The company secretary of North London based

Kami Claim Management Ltd was one Andre Malagiac...

and, according to the police intelligence, he was using the

company to rake in big bucks.

The way Kami Claims were making a financial benefit out of this

was in a number of ways.

First of all, they would arrange for the collisions to occur,

so it would be an induced collision.

They would then sell the personal injury claims to a solicitor.

Now, at the time, they would then be... They would receive

a solicitor's referral fee of several hundred pounds per claim.

They would also submit claims for storage of cars.

Often the cars weren't stored but they'd still submit claims.

But most importantly, the...

the bulk of the financial benefit was through what's called

credit hire, which is where the... the innocent party, if it was

a genuine crash, would be entitled to a like-for-like replacement car.

So they would purport to hire a car

when that car was often not hired or didn't even exist.

The credit hire cars might have been fake

but the money changing hands was real.

There is a bog-standard figure of around about, a simple

collision will cost an insurer around about £60,000.

Dave and his team launched an investigation,

and the results were disturbing.

We were able to say that specifically two collisions,

which happened in early 2012,

were deliberate in that they were

induced purely for,

for making money out of third party insurers.

If, as they suspected, the company was acting as a front for criminal

activity, the police unit needed to move quickly to shut it down

and eliminate the risk to the public.

It moved to the next phase, which would be the search

and arrest phase.

We obtained several warrants from the magistrates' court,

and they were executed on various home addresses

and the business premises of Kami Claims.

Early one morning, the team struck.

Clear in here.

DC Rob Eastick managed the search at location one.

Right, so what we're going to do now is have a good search of this

place, have a good look around, try see if we can find any mobile phones

or any documents in relation to insurance claims.

And that's just what they find.

In the flat, we found quite a lot of documents, a lot of banking

documents and a lot of documents in relation to accidents.

I think perhaps that's part of a larger conspiracy. I don't know.

But there is a lot of stuff we're taking.

Where was that found? Was that...

-Bottom drawer.

-..there's more to come from the search.

That one is on the list. She says, "Can you take it?"

And some big pieces of evidence are seized.

All told, with the searches we did that morning,

we seized ten motor vehicles that we were able to identify had

been used in criminality.

According to Ofcom, 93% of adults own or use a mobile phone in the UK.

With so many handsets, phone cover is now a significant

sector of the insurance industry.

Andy Morris is Assurant's chief marketing officer.

Listening to claimants spin yarns is all

part of the job for the company's fraud investigators.

Whilst the stories and these tales, you know, are mythical or

almost made up, they're fairytales, basically.

What's really clear is these fraudsters are determined

and focused to attempt to defraud the really good

customers in the industry over £1 billion each year.

One claimant recently called to register the loss of his phone

in particularly unusual circumstances.

They claimed that they had been involved in a...in a fight.

They'd fallen into a canal and lost their iPhone.

Ah!

Sounds like a flight of fancy, or should that should be

fight of fancy?

Doubts were flooding in and an investigation was launched.

We immediately reviewed the case, as we have to,

on its individual merits and, um,

the circumstances of the claim flagged with our fraud

triggers and our fraud team.

Which then resulted in a subsequent call from our fraud team with

the claimant.

The call handler's training was key in getting to the

bottom of the case.

One of the things that our team is expert

and skilled in doing is an interview technique with the claimants.

We ask questions around, you know, did the claimant understand

the value of the device, or had they sold the device, or

ultimately just trying to understand a little bit more information.

Doubts were starting to surface that the phone had ever been

lost at all and they were dealing with a totally false claim.

Further investigation revealed what had really happened.

We received information through our network

of partners and our network of data

that indeed this device had been sold to a recycler

on the 26th of May, which was the day before they purchased the insurance.

They had sold the phone, then taken out insurance, then tried to

-make a claim to get an additional pay-out.

-Ah!

It was time to take the plunge

and challenge the insured about the sale of the phone.

The claimant had been caught out,

but if they had that sinking feeling, they weren't letting on.

In fact, they went on the defensive.

But he was totally out of his depth.

The existence of multiple policies doesn't void them,

it's only multiple claims that are ruled out.

At this point, the claim had well and truly sunk and Assurant

heard nothing more from the man.

I do think that the fraudsters underestimate

the amount of information that we have either on them

or the device itself and what becomes very clear through

the claims process, is upon presentation of that quite

hard evidence that the claimants then ultimately will disappear.

-Or in this case, they'll sink without a trace.

-Ah!

Any business that is accessed by members of the public has to

have public liability insurance in case anyone suffers

an injury on the premises.

But according to figures from the Association of British Insurers,

so-called slip and trip frauds

increased by a staggering 75% last year.

Meaning scammers see this type of insurance as a soft target.

Our job is to pay claims when somebody is injured,

quickly and fairly, and the majority of claims that come in here

are honest claims where something's happened

and people are injured, but unfortunately there are a portion

where they're just made up,

either injury has happened and it's not our fault,

not our customers' fault, or nothing's happened at all.

Richard Hiscocks is Aviva's director of casualty claims.

The insurer operates a unit in Bishopbriggs

which specialises in investigating injuries.

They recently looked at what appeared to be

an open and shut case.

The third party claimed that as he went into a shop doorway,

the automatic electric doors were malfunctioning and closed on him.

He said after the doors closed on him, he suffered injuries

to his head, suffered from dizziness and concussion.

On the face of it, it sounded like he had sustained a serious

head injury and this was reflected in the potential value of the claim.

We put an estimate on of £8,900

to cover his injuries and his legal costs.

With such a large amount of money on the line, Richard's team

put their heads together to work out exactly what had gone wrong.

When we did the normal investigation, I think

that's when things began to go awry

because the witness statements from the people who worked in the shop,

then subsequently the CCTV footage told a bit of a different story.

That's putting it mildly.

Maybe the blow to his head was a bit more serious than

he first thought because the CCTV completely contradicted his account.

So this is a really interesting piece of video evidence,

because you'll see that the guy who is a claimant

comes into the shop, a normal busy shop entrance.

People passing by on the street and him standing in the doorway

and nothing happening except the doors are open as they ought to be.

Then you see the guy running behind, crossing the road,

entering the shop and assaulting our claimant.

The CCTV evidence dealt the claim a knockout blow.

Although the man had been injured, it wasn't the fault

of the shop doors, which were in full working order,

allowing other shoppers to enter.

Very interesting, somebody else comes into the shop from outside

who just steps over him, obviously keen to get his pint of milk.

One of the things that occurs to me is, our shop workers are trying to

look after him and he later then puts in a claim

which seems entirely unfair.

Unfair and unwise,

considering that the whole incident was captured on camera.

The claimant was making up pretty much all of is evidence.

Confident that there was no case to answer,

Aviva shut the door on the claim.

We sent a letter of repudiation to his solicitors,

followed it up by sending them a copy of the CCTV footage

and they very quickly withdrew the claim

and then declined to represent the claimant any more.

Richard's team had successfully headed off the false claim

and they never heard anything more from the man.

Well, I hope this gives a strong message that

if you put in a spurious claim, we will defend

the interests of our customers and will take it as far as we need to.

Some people seem to think that what goes on tour stays on tour.

But when it comes to travel insurance fraud,

a false claim is a false claim, no matter what language it's made in.

CEGA is a company that provides global emergency assistance

and travel and medical claims services.

Good afternoon, CEGA Special Investigations, how can I help you?

Simon Cook is the head of special investigations and he recently

dealt with a claim from a traveller who'd experienced a theft.

The customer told us he was travelling within India by road

and he's pulled over to have a much-needed break.

When the customer got back to his car, he realised the car had

been broken into and his personal possessions

and cash had been stolen.

The victim was far from being a stereotypical broke backpacker.

The customer was claiming for £3,000 worth of personal possessions.

And £1,000 in cash, so the combined total of the claim was £4,000.

A substantial sum for a travel claim and doubt soon crept in.

We had some initial concerns with the claim

because the customer was claiming for £1,000 in cash

when he only had four days left of his 30-day trip within India.

We would certainly have to question why he had that much cash

left on him at the end of his trip and why it was in sterling.

Not to mention why you would leave that much cash unattended in a car.

Other issues meant the claim was struggling to get out of first gear.

We also required a police report to have some independent

evidence to support that the incident did in fact occur.

Further evidence was provided about the damage to the car.

He later provided us with an invoice from an auto repair shop

to confirm that the car window had in fact been replaced.

But doubts remained and at this point, Simon's team decided

to park the claim until they had spoken to the insured.

We decided to conduct a telephone interview with the customer.

And in the interview the customer provided inconsistent information

about the circumstances, he also provided inconsistent information

about when and how he'd reported the matter to the Indian police.

The claimant had done little to accelerate his case

and with concerns still mounting, CEGA requested more evidence.

Bye-bye.

He later provided us with two additional police reports...

..which was very strange for a theft that would occur in India.

You would only expect to really receive one police report.

This brought the total up to three completely different reports.

There was me thinking police officers hated extra paperwork.

The first one was just confirming that an incident had occurred.

The second one, there was additional information

about where the bag was stored within the vehicle.

And the third one was confirming

that a window had in fact been smashed in the car.

Due to the inconsistent information

the customer actually provided to us, we were concerned

whether the incident had occurred

in the manner he had described, if at all.

Some people might have thought that with the incident

happening thousands of miles away, there was nothing much to be done.

But Simon was prepared to go the extra mile.

We decided to appoint one of our overseas investigators

to go out to the police station to validate the three police reports,

and also to go to the auto repair shop

to see whether that invoice was, in fact, genuine.

What he found meant it almost certainly wasn't.

Our overseas investigator spent about an hour canvassing the area,

trying to find the actual auto-repair shop,

but it was nowhere to be found.

He then decided to speak with local residents and shop owners,

and no-one had ever heard of this auto-repair shop.

But the key line of inquiry was into the multiple police reports.

Our overseas investigator

interviewed the police officer in charge,

who confirmed that the first police report was genuine.

The officer in charge

then looked at the second and third police reports.

And he said he's never seen any police report

such as that in his life

and they didn't originate from that police station.

It was arresting evidence that something was seriously wrong with the claim and CEGA took action.

We formally repudiated the claim and invoked the fraud condition

that's outlined in his insurance policy.

We didn't hear anything further from the customer,

which I think says a lot.

Not only did the claimant go away empty handed,

there will be potentially serious consequences

if he ever returns to India.

Due to the fact that the customer provided two false police reports,

the officer in charge did, in fact,

then issue a warrant for the customer's arrest.

So next time he returns to India,

the police are going to be after him.

Right.

Previously, DI Dave Hindmarsh of the Met began a search on a property

connected to Kami Claim Management Ltd in North London,

a claims management company he suspected

was behind two induced collisions.

Clear in here.

We forced entry, because we got a search warrant,

and we're just in the process of

searching the premises for any evidence.

Decide on one person searching one room, I think.

The warrant's for downstairs as well.

But the raid is about to move up a gear

as Dave heads over to the second location, the main company office.

We will meet one of the directors, who's been arrested this morning,

and we'll...we'll do a search looking for...relevant evidence

relating to what we're investigating.

That man was Andre Malagiac,

the company secretary behind Kami Claim Management.

Do you use that one for business as well?

Erm, nothing gets done on it.

What we were looking for was evidence of criminality.

That'll be fraudulent insurance claims,

evidence of cross-credit hire.

We were looking for any other evidence that would suggest

that they were involved in other fraudulent claims.

And it wasn't long before that evidence was forthcoming.

Went for the pencil.

Where was that found? Was that...?

Bottom drawer.

We found a quantity of cash,

we found evidence of claims that had been altered

in order to facilitate more fraudulent claims.

Satisfied with the haul from the Kami office...

Dave headed back to the first location

where the search wasn't just focused on paperwork,

they were after much bigger pieces of evidence, too.

We've got two vehicles

that we believe have been used in this particular crime,

and as such we're going to seize them...as evidence.

In addition to these two vehicles, another gentleman's been arrested.

Yeah, a good result. A good result at the moment.

All told, with the searches we did that morning,

we seized ten motor vehicles

that we were able to identify had been used in criminality.

That one is on the list. She says, "Can you take it?"

Those cars have clearly been obtained through fraud,

so we need to get rid of those cars, take them off the criminals.

And not only that, they're evidence.

We're able to prove that these cars

were in the possession of the organised gang

and they were later used as decoy cars,

or cars that were being crashed into.

Andre Malagiac was taken away

for questioning at a local police station.

Later in the investigation,

his associate Ion Vaduva was also arrested.

Eventually, a date was set at Southwark Crown Court.

All of the evidence that we had uncovered

was presented to the judge,

which ultimately led to early guilty pleas.

Malagiac was sentenced to 12 months' imprisonment.

The other male, Ion Vaduva, was sentenced

to four months' imprisonment for his role in the scam.

Malagiac had been the company secretary

and was instrumental in arranging the collisions.

Vaduva had a much lesser part in the fraud,

but his sentence sent out a strong message.

He handed over his car to the gang to be crashed into.

I think that's quite significant that he went to prison,

because it shows how the courts are taking these matters seriously.

And what I would say, is if you hand over your car in these circumstances,

if you are convicted, then you must expect that you will receive a custodial sentence.

Ultimately, this type of fraud affects all of us.

Every single person who has an insurance premium

will pay a little bit extra because of these frauds.

That's the financial impact.

It's actually more serious than that, because these people

are deliberately causing crashes on the roads.

Now, they don't know what the outcome's going to be,

someone could be seriously injured or killed.

So, it is really, really important to stop these people

who are doing these type of frauds.