Covid 19 impact on fraudulent bent metal and suspicious credit hire claims

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Covid 19 impact on fraudulent bent metal and suspicious credit hire claims

Published 23 June 2020

As the country leaves lock down, the unfortunate reality is that there will be a lot of people in financial difficulty. We know from experience that, in times of financial hardship, there is frequently an increase in fraudulent activity of both an opportunistic and entrepreneurial nature.   Additionally, there are career criminals and fraudsters who exploit situations such as Covid 19 for their own material gain.

It is, therefore, highly likely that as life slowly returns to the ‘new’ normal and as accident volumes increase, so will the number of suspicious claims. Given that in the fraud arena you do not even need to have an accident to make a claim, fraud frequency will likely increase at a much higher rate than the number of ‘genuine’ claims being received by insurance companies from honest claimants.

What does this mean for bent metal and credit hire fraud? 

Staged and exaggerated claims

Expect to see a rise in staged accidents as well as dishonestly exaggerated genuine claims with an increased number of total losses and associated damage claims.  This may be opportunistic, but there will also be an entrepreneurial element as organised fraud rings look to take advantage of insurance companies at time when they may be vulnerable.

There could also be threats from supply chains, especially from unscrupulous body shops and repairing garages. There have been reports of body shops charging excessive, unreasonable and exaggerated amounts for disinfecting vehicles prior and post undertaking repairs and extending storage and hire times by asserting that they had to wait 14 days after cleansing the vehicle before they could start any repairs. 

Theft and fire claims

Search term data compiled by Google have revealed that the number of users looking for information on how to start a fire grew by 125% in the last week of March 2020.

This should not  be a surprise, as in the last recession we saw increased attempts to write off vehicles. There has been a marked rise in the use of personal contract purchase deals to finance vehicles in recent years. Some individuals may be unable to continue to make the monthly payments so may seek an exit strategy. A theft or fire claim may pose an attractive option.

The entrepreneurial fraudster could even advertise, promising a fast and safe disappearance of vehicles or increasing damage to vehicles, so that vehicle owners can make false theft claims or exaggerated bent metal claims.


Due to financial hardship, as people look at ways to save money and cut costs, fronting could be an option and so we expect that there will be a rise in policy coverage cases and associated issues.

Document validation and ghost broking

There have been warnings in the media for people to be on the lookout for fraudsters who are out to make the most out of the Covid 19 pandemic.  We expect that instances of ghost broking will rise as fraudsters use an insurer’s branding to promote and sell fake or invalid insurance products.

What are the solutions? 

Stay connected
  • Supply chains - Understand their pressures and pay valid invoices quickly to ensure delayed payments do not motivate business owners to undertake unsavoury behaviour.
  • Customers/policyholders – Engaging with customers so that they know to be vigilant to suspected fraudulent activity will reinforce the wider messaging from the law enforcement bodies.
  • Panel - Who can  help with resourcing for fraudulent claims handling where, for instance, you may have had to deploy resource to FNOL/intervention teams.
Resourcing and training

This inevitably will have its own challenges due to lock down and staff resourcing issues but utilise panel to provide claims handling and to assist with preparing and delivering training and virtual support. FNOL handlers and those on the front line will also need support and training to be able to identify suspected bent metal and credit hire fraud cases which may very well be different from what they have seen pre Covid 19.

Intelligence and data analytics 

KYO is of the uttermost importance as is developing bespoke strategies to deal with those enablers that seek to exploit Covid 19. At DAC Beachcroft we use KYOTO to track enabler behaviours, trends and tactics but, most importantly, to set tried and tested strategies to secure the most favourable outcomes.

Technical bent metal and credit hire strategy  

When dealing with suspected fraudulent bent metal and credit hire cases, there will be instances in which you cannot prove fraud and so cannot secure a full repudiation based on fraud arguments.  Frequently, however, a robust technical bent metal and credit hire strategy can yield huge benefits, including complete technical knockouts. Ignore the hire and associated loss claims at your peril!

The future certainly is not set in stone but we are able to make predications based on what has gone before. It’s fairly safe to say that fraudulent activity will rise across the board but especially within the bent metal and credit hire arena, as entrepreneurial fraudulent enablers and organised fraud networks look to exploit current operating models for their own personal gain.

Whilst there are challenges ahead, insurers have tools in their toolkit to combat the behaviours that we expect to see. The key, as ever, is about connectivity, sharing best KYO practice, data analytics and intelligence to ensure that the right balance is struck between paying genuine claims at the right time for the right amount and stopping those that seek to commit fraud against insurers and genuine policyholders.

For more information or advice please contact one of our experts in the vehicle hire & damage fraud team.


Helen Mason

Helen Mason


+44 (0) 121 698 5309

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