Tag Archives: no win no fee

The End Of Referral Fees?

The Government have announced that from sometime next year in an effort to reduce the number of accident claims they intend making the payment of a referral fee illegal. They point to the fact that claims have increased due to the efforts of the many claims management companies which they says encourages victims to claim. Whether that will work is questionable.

In relation to a genuine victim why should he not use a claims management company who appoint a top firm of personal injury lawyers to represent him. Insurance Companies themselves derive much of their income from passing on details of accident claims to Lawyers in return for huge fees. Admiral Insurance have stated that 6% ofits profits is derived from referral fees.

Therefore it is likely that insurance Companies and Lawyer’s will find some ways of circumventing these new laws as and when they come into force. Many Lawyers and Accident Companies are talking together and forming joint ventures as a marketing exercise which would also be legal. What is wrong with a victim being “encouraged “ to claim if his claim is valid. The
answer is “ Nothing”

We feel that sense should prevail and the only person who should be penalised is the fraudulent claimant who clouds the water for all the genuine accident claims victims.

The real problem will in the interpretation of exactly “ What is a referral fee?

Top 10 Fraudulent Postcodes

Fraudulent accident claims are prevalent in the UK. The charity Crimestoppers has put together a league table of the country’s worst offending postcodes for “crash for cash” scams. Quite remarkably a Bradford or Birmingham postcode came out in 9 of the 10 hotspots available.

Worst Offending Postcodes SOURCE: Crimestoppersaccident claims fraud

  1. BD9 – Bradford
  2. B10 – Birmingham
  3. BD3 – Bradford
  4. B11 – Birmingham
  5. BD9 – Bradford
  6. B8 – Birmingham
  7. B9 – Birmingham
  8. B25 – Birmingham
  9. B7 – Birmingham
  10. BL3 – Bolton

The charities new publications are part of a nationwide campaign to raise awareness about the impact of frivolous accident claims and essentially to put a stop to the large-scale ‘crash for cash’ scams happening on a daily basis.

Drivers in Bradford and Birmingham are being urged to be extra vigilant and report any suspicious activity. Crimestoppers has a hotline available for anyone to get in contact if they have information involving activity relating to insurance fraud. Insurance companies have been working hard with the charity providing information on key areas that need to be monitored more closely.

Typically a ‘crash for cash’ scam involves criminals setting up a crash that will lead to exaggerated accident claims and car hire bills. Insurance scams are being run by organised criminal gangs in what is becoming an increasingly lucrative market.

Accident Claims director Josh Donn commented; “It’s always going to be a difficult battle to put an end to exaggerated personal injury claims. The disappointing thing is that scams are now being run by sophisticated organised gangs and members of the public can feel intimidated standing up to them. We recently spoke to a gentleman who was the victim of a ‘flash for cash’ accident but didn’t proceed with a compensation claim out of fear. These gangs are targeting vulnerable people which make the process of stopping them even more difficult. All the staff at Accident Claims are committed to preventing insurance fraud and we report any suspicious incidents or claims to the Insurance Fraud Bureau (IFB).

As is the case with personal injury it is very difficult to prove that someone is in fact scamming the system. Whiplash claims are difficult to disprove and compensation can be achieved for even the slightest of bumps. Fraud detection systems have come a long way over the last decade. Defendant firms like Keoghs have made significant investments into their own fraud detection system many years ago which sees them successfully find and put a stop to a number of fraudulent accident claims.