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IFB proposes 3 point plan for tackling rogue CMCs

05 November 2013

Speaking at a Westminster Legal Policy Forum event exploring the future of claims management regulation today, Director of the Insurance Fraud Bureau (IFB), Ben Fletcher, outlined a three point plan for tackling rogue Claims Management Companies (CMCs) involved in organised insurance fraud.

CMCs have long been common enablers of ‘crash for cash’ fraud investigated by the IFB, with 53% of live police Operations assisted by the Bureau focusing on a suspected rogue CMCs. Whilst Fletcher recognises there is no “silver bullet” that will eradicate the problem, continued collaboration between the insurance industry, police and regulators, is deemed essential.

Fletcher outlined three measures to complement and enhance that work:

  • Greater onus on front end checks for CMCs to prevent unscrupulous businesses being authorised to trade in the first place;
  • sentsCMCs themselves proactively sharing intelligence with the IFB about suspected fraudulent behaviour;
  • Make disclosure of the referral source within the claim notification form a mandatory requirement.

Ben Fletcher, Director of the IFB – a not-for-profit agency tasked with investigating and disrupting organised motor insurance fraud – said:

“Whilst many CMCs are genuine, we know from years of operational experience that some are set up by criminal gangs solely to mask organised insurance fraud. The measures we are proposing will help us identify them, prevent them from posing a severe financial risk to our industry, investigate them and bring fraudsters to justice.”

Case study: CMC boss jailed for 7 years

In August 2012, CMC boss Masi Naqshbandi was found guilty of staging hundreds of road traffic accidents in order to make insurance claims, which would have been worth over £6.5 million. Naqshbandi was sentenced to seven years in prison.

Between 2007 and 2008, Naqshbandi and his accomplice, Sabaoon Hillaman, submitted over 250 fraudulent insurance claims through their London-based claims management company – Real Accident Helpline. In some cases, vehicles were deliberately crashed or damaged to mimic a road traffic accident. In other cases, accidents were entirely made-up by presenting false names and paperwork. In all cases, credit hire, personal injury and inflated damage costs meant each claim was worth tens of thousands of pounds.

Using world-leading technology, fraud analysts at the IFB gathered evidence linking Real Accident Helpline to over 250 fraudulent claims, worth in excess of £6.5 million. Naqshbandi and Hillaman were arrested by the Metropolitan Police Service’s (MPS) Traffic Command Unit in the summer of 2008 and charged with conspiracy to defraud.

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