A surge in so-called “cash for crash” scams and fraudulent whiplash injury claims is being blamed for a sharp rise in insurance fraud detected by Britain’s biggest insurer.

Aviva said it discovered more than £110m worth of fraud in 2013 – up 19% on the previous year – and that it was currently uncovering 45 fraudulent claims a day.

However, while policyholders submitting inflated or invented claims for supposedly stolen or damaged valuables is still an issue, Aviva said that increasingly, insurance fraud was carried out by third parties making claims against its customers – for example, for spurious injuries as a result of an accident – and also by organised gangs.

A combination of factors including the challenging economic climate, the fact that many people see it as a victimless crime, and a lack of effective deterrents are all helping to drive up the number of cases of insurance fraud, Aviva warned.

Motor injury fraud  accounts for 54% of Aviva’s total detected claims fraud costs

The most common type is motor injury fraud, which accounts for 54% of Aviva’s total detected claims fraud costs. More than half of these involve cash for crash scams, where people submit false claims for damage and personal injury in relation to car accidents that either never happened or were staged.

Tom Gardiner, head of fraud at the insurer, said: “We are witnessing a trend toward third party injury and organised fraud. For example, in 2013 we identified fraud in one in nine third party injury claims.”

Aviva is currently investigating more than 5,000 suspicious injury claims linked to known fraud rings – an increase of 20% since 2012. The Insurance Fraud Bureau estimates that one in seven personal injury claims are linked to suspected cash for crash claims, with the total annual cost to insurers for these scams estimated at £392m.

Read the full story via ‘Cash for crash’ scams fuel sharp rise in insurance fraud | Money | theguardian.com.