Keoghs Insight


Richard Iddon

Pre-Proceedings Credit Hire fraud

Credit Hire Aware 6

As the number of GTA/NGTA claims Keoghs have received has risen recently, so too has the level of credit hire fraud.

Utilising our specialised analytical and intelligence tools, and with a wealth of experience in credit hire, general fraud and intel themselves, Keoghs’ Credit Hire Fraud (CHF) team are often able to see issues and trends well before our clients.

Keoghs’ CHF Manager, Richard Iddon, raises some of the main issues here and discusses relevant successful cases.

Trends in the credit hire market

Over the past 12 months the credit hire fraud market has continued to expand - far beyond our expectations - with dozens of new credit hire organisations (CHOs) being set up to take advantage of the level of profits that can be made in this area. Unfortunately, attempts to create a profitable business are not always legal, and some organisations try to defraud insurance companies in order to recover a higher level of profit.

Based on the hundreds of claims Keoghs’ CHF team have handled in 2014, the average amount of hire claimed so far this year is £7,000. This shows the levels of profit that can be made hiring out a vehicle on credit if they are not spotted and dealt with early in the process.

We have seen a number of trends develop over the past six months in particular.

Some (although at a high level) include:

  • Certified repair / car sales garages allegedly leasing out vehicles on a credit basis despite advertising a courtesy car service.
  • CHOs trading from a residential premises with no evidence of an available fleet.
  • Taxi companies pursuing hire on their own vehicles that have been provided to their own drivers / employees.
  • Bogus credit hire invoices even though the vehicle has never been hired out.
  • CHOs providing replacement vehicles on credit without the knowledge of the claimant. Here, it is not uncommon for the terms and conditions not to be explained to claimants - making them unaware that the vehicle being leased is on credit nor of their liability to pay for such an agreement.

These are just a small number of the ongoing concerns we have with certain organisations. Despite these, we continue to see an increase in ‘have a go’ CHOs.

How Keoghs identify credit hire fraud

Keoghs’ CHF team use a variety of tools to help identify and combat CHF. The main tools at their disposal are our databases, monitored and modified by Keoghs’ intelligence team.

The CHF team have a close relationship with the intelligence team. The databases are used to identify ‘serial offenders’ and discover strong links between individuals and organisations of concern.

On numerous occasions, searches of our databases throw up a number of fraudulent behaviours - such as a hire vehicle being used by more than one individual at the same time. These are then flagged and the CHO duplicating the hire claim will find itself on Keoghs radar for any future claims. The intelligence team also have access to a variety of search facilities, with all results being added to our in house databases. These searches can be used to reveal the backgrounds of the companies, directors, vehicles and also the claimants themselves.

Once this information is obtained, it can then be analysed by our CHF case handlers, thus providing crucial evidence to assist in the defending of a credit hire claim. This is particularly powerful as many of the CHOs we review tend to be in business for only 10/11 months and then, before having to file accounts, mysteriously fold.

Often, we find the owners set up as another company in the following weeks. As a consequence we now have over 1,000 hire providers and related individuals held in our credit hire system.

Reading the insurance press I often see statements that CHF is a ‘myth’ created by insurers to slow the payment of claims unnecessarily. I can only answer these by saying that, on behalf of two major insurance clients alone, our pre-proceedings teams have successfully repudiated hundreds of thousands of pounds worth of credit hire claims in 2014. This does not include cases referred to Keoghs by other clients.

Our Advanced Data Analytics system (ADA) is also used in the identification process to target potential CHF claims. A system that can review ALL claims within

Keoghs’ databases, ADA is able to extract potential ‘high risk’ claims and mark these as needing urgent review. Our experienced CHF handlers use this information to prevent claims from progressing that otherwise may ‘slip through the net.’ Once these are taken to our CHF teams, the claimant’s evidence is obtained and investigated thoroughly to identify any evidence of fraudulent behaviour. This in turn is then used to dispense any fraudulent claims and expand our databases even further.


  • The claimant was a self employed taxi driver, but obtained his work through a private hire company. Involved in a non-fault accident he obtained a replacement taxi from the private hire company who provided him with work, with a credit hire invoice submitted amounting to £7,200.

Due to concerns surrounding the link between the claimant and the hire company, the claim was investigated where it was found that the replacement vehicle was obtained

through the company who repaired his vehicle for a period of two days. This was not provided on credit and the claimant paid for this vehicle up front. The concern was that the period of hire from the repairing garage crossed with the hire period provided by the claimant’s credit hire vehicle. His own vehicle turned out to be roadworthy and he had been using it until it went in for repairs. Although never confirmed, we suspected the claimant never hired a vehicle at all. The claim was repudiated due to these concerns and the hire claim of £7,200 subsequently dropped.

  • A hire claim was presented by a company who alleged they were a subscriber of the ABI GTA, but this was not the case.

We suspected this was placed on the invoice to avoid detection, something we have seen several times before. The claim for hire was large and it was taken in by the credit hire fraud handlers to investigate. The initial documentary request turned over no issues. However, enquiries by Keoghs’ intelligence team showed that the claimant’s own vehicle had been involved in an accident approximately two weeks prior to the index accident.

The engineer's report from this earlier claim showed the vehicle to be unroadworthy as a result of the previous accident and was dated prior to the index accident Either the claimant was driving his vehicle illegally, or the vehicle was never involved in the index accident at all. The claim was repudiated in its entirety and thereafter dropped. The successes obtained by Keoghs’ CHF team here resulted in large savings for our insurer clients.

What this means for insurers

Keoghs have the knowledge, experience, facilities and systems in place to assist in tackling rising and ongoing credit hire fraud claims. So far in 2014 our pre-proceedings CHF team have handled over £1.5 million in claims for hire, storage and recovery. Of the claims the team have concluded, the average saving equates to 81%. Over 90% of the claims we handle from CHOs come from outside the GTA. We now screen many of the new GTA applicants by some of our clients for this reason.

Keoghs’ CHF team aims to show the industry that CHF can and will be identified, and that the ultimate loss in these cases will be to the fraudulent CHOs themselves.

Identifying CHF at an early stage, our systems help us to not only eliminate the fraudulent claims presented by certain organisations, but also ensure insurers reduce the costs of litigation.