Crash-for-cash Insurance Fraud

Tom Tugendhat Excerpts

Wednesday 22nd May 2024 Westminster Hall

[The Minister for Security (Tom Tugendhat)]

It is a pleasure to serve under your chairmanship, Ms Fovargue. I am delighted to speak in a debate secured by my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn). He demonstrates again not only his commitment to his constituents, but the way to use the House quite correctly to bring out a particular example that affects both his constituents and people across the whole United Kingdom. I am delighted that the hon. Member for Glasgow Central (Alison Thewliss) highlighted many of these issues in Scotland. The hon. Member for Mitcham and Morden (Dame Siobhain McDonagh) touched on many of those issues and, sadly, her personal experience. That certainly was a telling lesson for all of us.

I am glad that the hon. Member for Nottingham North (Alex Norris) touched on many of the questions that we are all looking at, because insurance fraud is not a victimless crime, as Members have highlighted. A few weeks ago I renewed my insurance premium, and I felt it; I know we all do. The reality is we are covering not just our own errors and foibles behind the wheel but those made by others and, in this case, by criminals. That is why I take the matter incredibly seriously, because fraud is not a victimless crime. It is not simply a crime against the insurance business or insurance companies, which in itself is not victimless—after all, insurance companies are owned by shareholders, families and individuals across the United Kingdom. Rather, it is a crime that has a direct implication for the pay packets and household economy of families across the United Kingdom. That is why fraud is taken so seriously and is part of the brief of the Security Minister.

Members may think it unusual that fraud, or even crash fraud like this, is part of my brief—I usually spend my time wondering what different foreign agents may be trying to do in the United Kingdom or, indeed, what hostile states may be trying to steal off us—and they may question the connection. But as hon. Members have correctly said, the connections are clear: criminals use fraud to raise cash to exchange with agents of hostile states. Effectively, the connection between hostile states, serious and organised crime, and people trafficking and fraud is all too clear. I should be clear that that does not mean that every group is connected in all parts. Sadly, or rather happily, many groups are not connected and are simply small ventures by individuals who are trying to exploit something that they may have been told about by somebody else. Therefore, they are simply copycat cases. We should not exaggerate too much, but keep that in perspective. The truth is that there are serious challenges. The serious point here is that hundreds of thousands of such cases have come to light: I think we are now up to 130,000, as my hon. Friend the Member for Carshalton and Wallington said. The Insurance Fraud Bureau, which does so much to lead on this issue, has around 6,000 active suspected crash-for-cash claim investigations that have been notified to it by its members, with an estimated worth of over £70 million, and crash-for-cash cases make up about 30% of its live investigations.

We also recognise that moped-enabled crash-for-cash fraud is on the rise, which the hon. Member for Mitcham and Morden highlighted quite correctly. It is pernicious and can be extremely dangerous, because not only is the rider putting themselves at risk, but they may force the driver of the car into a dangerous manoeuvre that could put other road users at risk. It is perhaps not the case here, but a solicitor or another person can also be complicit in the scam, which needs to be called out. That is why we are working not just with the insurance sector, or even just with policing. I am grateful that the hon. Member for Nottingham North recognised that we have hired thousands of new police officers over England and Wales over the last year, many of whom are on the streets. Only London under a Labour government has failed to meet its target, which my hon. Friend the Member for Carshalton and Wallington and his constituents sadly know all too well.

The reality is that it is not just about policing, but about the way we work with solicitors, regulatory authorities and the various other organisations with oversight of the area. Unlike traditional scams, the moped scam involves hiding down a side road, nipping out and effectively trying to provoke an accident, which is extremely dangerous. The Insurance Fraud Bureau ran a targeted awareness campaign on the scam in June last year, which we supported because it highlighted what road users should look out for and what they should do if they think they have been a victim of such a scam. The campaign received widespread national coverage, and I am grateful to Sky, the BBC and TalkTV for picking it up.

There is still an awful lot that we must do. I pay tribute to my hon. Friend the Member for Carshalton and Wallington for setting out many of those areas, and to the hon. Member for Mitcham and Morden for highlighting how fraud can happen to anyone in the United Kingdom. The impact of fraud goes beyond financial losses, and improving support for victims is an important part of our fraud strategy. My hon. Friend the Member for Carshalton and Wallington is right. Not only have we introduced 400 new officers for the national fraud squad, but thanks to its efforts and the City of London police, we have managed to bring down fraud as a crime target. It is now down 16% year on year, building on 13% last year, which demonstrates that we are travelling in the right direction.

Sadly, fraud is playing a more important part in many people’s lives. So much of our lives is now online and has therefore been opened up to a different area of exploitation. That is why the work we are doing across the 43 police forces of England and Wales to support more victims through Action Fraud as part of the fraud strategy is so important.

We are also supporting National Trading Standards in its roll-out of a multi-agency approach to fraud, bringing together local services and improving support to vulnerable victims. Through the Financial Services and Markets Act 2023, which I know the hon. Member for Carshalton and Wallington has beside his bed at night, we legislated to require the payment systems regulator to introduce mandatory reimbursement for authorised push payment scams. Those provisions will come into force in October and will ensure that more people get their money back.

This is a matter of huge importance to the Government and something that we take seriously. My hon. Friend the Member for Barrow and Furness (Simon Fell), our fraud champion, has been working on it closely. He has been an important asset to the Home Office in making sure that work comes together. I am very grateful for the kind words of my hon. Friend the Member for Carshalton and Wallington about our fraud champion. I agree: he is excellent.