AWARE

Keoghs Insight

Author

Fraser McAndry

Fraser McAndry

Partner

T:01204 678693

Pre-Proceedings Credit Hire Fraud

AWARE19/10/2015
Credit Hire Aware 8

The Keoghs pre-litigation team achieved savings of over £1,000,000 in 2014 and are on course to improve on that figure in 2015. Following a model of identification (using Advanced Data Analytics), validation, investigation, and resolution, the team’s results demonstrate the “size of the prize” available if insurers deploy similar robust credit hire fraud models. We retain around 16-18% of non GTA claims within the pre-litigation credit hire fraud (CHF) team for further investigation. Below, we take a look at some of the recent successful cases in the team. The cases illustrate the different ways in which a successful outcome can be achieved and highlight the need to have a forensic attention for detail when undertaking CHF investigations.

Paperwork concerns

Keoghs’ credit hire fraud unit were instructed to deal with a claim presented from a large non GTA CHO who provided hire, storage and recovery to the claimant.

There were numerous issues with the agreement presented. The most pertinent issue was that there were four hire agreements provided, however two of these agreements were an exact photocopy (including the signatures) with different dates of hire on them. In addition, the daily rate of hire was in a different place on each invoice. Therefore, it was clear that the claimant had signed a blank hire agreement which was completed after the event. Furthermore the signatures on the other agreements were different. Finally, we were presented with a storage and recovery invoice which we also had concerns over. When we requested a further copy, this was provided under a different company name, raising concerns over falsifying of the invoice.

The claim for hire, storage and recovery was repudiated in its entirety. Over three months has passed without a response from the third party and therefore the file was closed as “gone away” This resulted in a saving of £8,356.80 or 100%.

Company links

This case was referred to the credit hire fraud unit due to concerns involving the credit hire organisation to whom Keoghs had previous exposure to within our counter-fraud unit. During the course of our investigations a clear link between the claimant and the CHO was established as they both shared a director and business premises.

Despite the fact that they trade from the same premises, the claimant submitted a claim for storage at their own address. Furthermore, the claimant’s own engineer estimated repairs to the claimant’s vehicle at two days, yet the third party claimed for 13 days worth of hire for the period of repairs. There were concerns over mitigation and exaggeration in this regard.

Due to the links between the CHO and the claimant and the fact that the claimant had access to a fleet of vehicles and no need to hire, the claim was repudiated. The storage claim was also repudiated as the vehicle was stored at the claimant’s own address. Again, there was an issue concerning exaggeration as the storage claim was a clear attempt to increase financial gain. The repudiation letter was submitted in January 2015. To date, we have not received a response and have proceeded to close our file as “gone away”.

This resulted in a saving of £2,990.26 or 100%.

Who owns the vehicle?

This claim also involved concerns over the credit hire organisation. The company had featured on over twenty five Keoghs files including three credit hire fraud matters. The director of the company also held appointments with other Oldham-based CHOs and accident management companies.

Intelligence enquiries were made and it came to light that the damaged vehicle had a keeper change a week after the index accident but three weeks prior to the commencement of hire.

Accordingly, it was either the case the claimant wasn’t the owner at the time of the index accident, and had therefore not suffered a loss as a result of the same or alternatively had sold the vehicle prior to hire commencing, raising concerns as to need. The claim was repudiated in April and no response has been received. This resulted in a saving of £5,964.00 or 100%.

MOT queries

We have recently repudiated a claim for hire from a well-known non ABI GTA CHO in full, following concerns with the MOT position of the hire vehicle and the mileage of the third party vehicle during the hire period.

As a result of an accident at the start of March 2015, Keoghs was presented with a claim for hire from the date of the index accident until the middle of April 2015.

Validation searches were conducted against the vehicles which identified that the hire vehicle provided to the claimant did not have an MOT on the date that hire started. Searches showed that the MOT on the vehicle had expired at the start of October 2014 and had been without an MOT until 24th March 2015.

The most recent MOT date was during the period of hire on 24th March 2015 and the search results showed that the vehicle failed the MOT on that day and then passed the MOT on the 25th March 2015. Despite these details, the CHO had presented a continuous claim for hire with no break for the MOT tests.

In addition to this, upon reviewing the engineering evidence it was clear that the third party vehicle had been in use during the hire period.

The vehicle was inspected on two occasions during the hire period, exactly one month apart. During this period, the vehicle had incurred 594 miles.

The investigations suggest that neither hire nor storage took place and therefore a full repudiation was made resulting in a saving of £1,400.10 or 100%.

Getting the dates right

Keoghs were instructed on a claim brought for credit hire after an accident on 31/05/13. Concerns persisted as to the credit hire organisation, and the matter was retained in the credit hire fraud unit.

Hire commenced on 01/06/13 but when the claimant provided their alleged ownership documentation, it was noted that they provided a V5C/2 and not a full V5C. On reviewing the document, it advised the claimant only purchased the vehicle on 03/07/13, over a month after both the incident date and hire commencing. This presented concerns as to whether the accident had actually occurred, whether the hire had happened and also position on insuring the vehicle. The claim was ultimately repudiated on the grounds of need.

This resulted in a saving of £3,238.20 or 100%.

Duplicate claims

A claim was transferred to the credit hire fraud unit due to concerns regarding the hire company based in London.

Our initial investigations were made, which identified that the claimant had an extensive claims history with a total of ten claims against the individual within the five years prior to the index accident. Particularly of interest was a CUE match found for the claimant on 16/05/13, a day before the index accident in our claim. Keoghs Intelligence Services were instructed to submit a DPA request to the relevant insurer to obtain further information regarding this accident.

An intelligence validation report was also prepared in relation to the hire company which showed that Keoghs had previous exposure to the company on six claims within our counter-fraud services unit and the director of the company had been directly involved in a previous claim handled by Keoghs.

In the meantime, despite chasers, no response was provided to our initial request for documents from the CHO and our file was closed as dormant.

A response was then received from the relevant insurer showing that the claimant had submitted a duplicate hire claim as a result of the previous accident, as well as ours, and a repudiation was issued in June. No response has been received.

This resulted in a saving of £4,183.80 or 100%.