Credit Hire Fraud Evidence - A Fishing Expedition?
Head of Credit Hire Fraud, Fraser McAndry, looks at this niche area and how it differs from ‘standard’ fraud typologies, examining the shift in approach needed to validate and investigate such claims.
There is no doubt that credit hire is a rapidly growing area of fraud and one which is perpetrated by a wide spectrum of fraudsters, ranging from the opportunistic one-offs through to organised criminal gangs who continue to see credit hire as a lucrative, easy area of fundraising for more serious criminal activity. The fact that credit hire fraud is easy to attempt (although I don’t recommend it!) adds fuel to the fire and, as such, you will always find individuals or gangs willing to give it a go.
So how does it differ from mainstream fraud?
Well, primarily the manner with which we identify and investigate credit hire fraud is unique.
At Keoghs, our pre-litigation credit hire fraud team identifies risk cases through our bespoke data washing system, Advanced Data Analytics (ADA). Within ADA we hold the details of over 370 credit hire operators (CHOs) with whom we have had a previous, negative experience. If a new hire case involving one of those CHOs comes through our door, ADA will alert the team, who will triage it and decide whether to hold it for investigation.
However, in the majority of cases, this will not be based on evidence of fraud contained in the payment pack; in fact this very rarely happens in pre-litigation cases. Usually the team will retain a case based on CHO intelligence, document analysis, initial intelligence searches and, to a degree, gut feeling combined with experience.
This certainly differs from mainstream fraud; for instance, if we were to consider an induced accident the evidence of the fraud is usually apparent fairly early on from the policyholder’s account. On the other hand, whilst a credit hire case might be retained on instinct or intelligence gathered, we then have to effectively fish for the evidence. To extend the analogy, we often have to cast our net quite wide into some choppy waters to make that vital catch!
In order to validate and investigate a potential credit hire fraud case it’s important to look at all elements of the claim. Following retention of the file, our typical first communication to the CHO or their appointed solicitors is a long letter asking for various documents, information and responses to any observations we may have to make upon the claim. Typically we would ask for Insurance Certificates, MOTs, and V5s for the claimant’s car and the hire car. If we’re dealing with a taxi case we would also request licence documents, suspension and reinstatement notices plus any repair documents.
When Keoghs ask for these documents it is impossible to say whether they’ll ever be received (often they are not) and, even if they are, what that will mean for the case. So, back on the good ship Credit Hire, we are fishing for that bit of evidence which will help us repudiate the claim without truly knowing where it is going to come from. As a credit hire fraud investigator, there is often the opportunity to approach the case from an extremely forensic perspective, gathering evidence from local authority DPAs, engineer’s inspections and signature analysis, amongst other sources.
However the waters are further muddied by another vital distinction from mainstream ‘standard’ fraud, whereby the original incident linked to the fraud is frequently genuine.
It really does take a change of mind-set to contemplate that a fraudulent head, or heads, of loss can arise from a legitimate accident. Indeed, it is very easy to retain the thought process that a genuine incident won’t contain any fraud and this is an understandable trap to fall into. However, as we’ve discussed above, credit hire fraud is its own animal and, speaking from vast experience, fraudulent credit hire claims can and do emanate from wholly genuine RTAs. This is a growing trend which cannot, and should not, be ignored.
Using our credit hire fraud ring, Operation Rivington, to give an idea of scale, I’d estimate that 23 of the 25 cases in that ring were genuine accidents, yet 100% of the related hire and storage claims were bogus and fraudulent. In terms of the process, a CHO/AMC gets hold of the accident details and submits made up invoices, charging for credit hire that often didn’t take place.
The company is effectively relying on the insurer to rule out fraud due to the fact that the RTA is genuine or no personal injury claim has been made. Therefore it is incumbent on us all to change our traditional mind-sets before, to paraphrase the late Roy Scheider, we need a bigger boat…