Find out about so-called crash-for-cash and flash-for-cash scams that lead to rising car insurance premiums and compromise road safety.
For too long there's been a common misconception that insurance fraud is somehow a 'victimless crime'
IFB chairman David Neave
A November 2012 report from the Insurance Fraud Bureau (IFB) suggests that so-called crash-for-cash scams are costing honest drivers £392m a year in inflated car insurance premiums.
Innocent drivers involved in such incidents could lose their no-claims bonus and face higher renewal fees, while the overall cost to the insurance industry drives prices up across the board.
Moreover, the practice compromises road safety, while the money from it is being used to fund illegal activities, including people trafficking, drug dealing and the purchase of firearms.
"For too long there's been a common misconception that insurance fraud is somehow a 'victimless crime'," said IFB chairman David Neave.
"Insurance fraud costs us all through increased premiums. But crash-for-cash poses even greater risks to society, fraudsters are gambling with the lives of innocent people and using the profits to fund other crimes plaguing our society."
The most well-known example of the scam is the set up of a so-called induced accident that leads to the innocent motorist hitting the fraudster's vehicle from behind.
There are a number of ways for the fraudster to achieve this, such as disabling the brake lights on their vehicle then braking suddenly, or starting to pull off from a junction into a clear road then applying the brakes for no reason.
Pedestrian crossings are another area to be aware of. Fraudsters have been known to drive towards empty pedestrian crossings at normal speed, before braking sharply for no apparent reason.
As most insurance cases judge that the driver of the vehicle behind is the one at fault, the innocent motorist is often left to rely on their policy to pay the bill.
To strengthen their case fraudsters have been known to use fake witnesses, who could either be bystanders, or could appear from another vehicle.
Decoy vehicles have also been known to be used as part of scams.
In addition to such induced accidents, the IFB also see cases of staged accidents and ghost accidents.
With staged accidents, both vehicles are in the hands of fraudsters who will deliberately crash them together, or even take a sledge hammer to vehicles in order to replicate the impact of a crash.
Ghost accidents - also known as contrived accidents - are where the fraudster doesn't even bother damaging a vehicle. They submit fabricated paper claims - in some cases for vehicles that don't even exist.
The flash-for-cash scam really couldn't be much simpler - the fraudster flashes their lights to call out the innocent driver who is waiting at a junction or intersection, or perhaps trying to pull out from a parking space, petrol station or shop.
Never assume that flashing headlights is a signal inviting you to proceed
The Highway Code
When the innocent motorist then enters the traffic stream the fraudster will deliberately crash into them, perhaps even accelerating to facilitate this.
The subsequent insurance investigation will come down to one driver's word against another's and - as the fraudster will deny that they flashed their lights - it's likely to look as if the innocent motorist was at fault for pulling out rashly.
What's more, even if it could somehow be proved that the other motorist had flashed their lights, this wouldn't be a defence under the Highway Code.†
The Code's advice on flashing headlights reads as follows: "Only flash your headlights to let other road users know that you are there. Do not flash your headlights to convey any other message or intimidate other road users. Never assume that flashing headlights is a signal inviting you to proceed. Use your own judgement and proceed carefully."
But the IFB has identified a variety of areas targeted by fraudsters, leading to scams that have netted the perpetrators up to £30,000 for a single 'accident'. They are:
Fifteen fraudulent claims are exposed every hour of every day
Criminals have been known to have a network behind them of car repair shops, car hire organisations, even doctors and solicitors, who are in on the fraud.
The actual driver of the vehicle responsible for the scam may be at the bottom of a very long criminal chain, the most vulnerable member of a gang who is placed in the most dangerous position.
If you're unfortunate enough to be involved in an accident it's only natural to be flustered and, perhaps, not thinking straight, but try to remain vigilant and aware of anything that seems suspicious.
Whatever sort of accident you're involved in, your initial concern should be safety - both your own and that of other road users.
If possible, get your vehicle into a safe location, use your hazard lights, turn the engine off and, if necessary, contact the emergency services.
For more detailed information on what to do after an accident, see the advice on the Citizens Advice Bureau's website,† but with regards to avoiding fraud:
The rise in telematics car insurance policies - also known as black box insurance - may also help.
If you have such a policy, the data recorded about your driving behaviour may help prove that you weren't at fault.
The insurance industry is fighting back against fraud, with a September 2012 report from the Association of British Insurers indicating that 15 fraudulent claims are exposed every hour of every day.
The IFB has access to over 130 million cross-industry insurance records and uses cutting-edge technology to detect scams.
They also need the public's help, though, and have asked that anyone with information on crash-for-cash scams calls their free and confidential Cheatline - powered by Crimestoppers - on 0800 422 0421.