Your Money: Six scams to be on the alert for in 2017
Be wary of frauds such as staged car park collisions and copycat websites, writes Louise McBride
Car insurance fraud is costing insurers hundreds of millions of euro a year - and pushing up the cost of motor insurance for drivers. With car insurance premiums already soaring in recent years, such fraud is an extra financial headache which motorists could do without. Fraud has already pushed up the cost of a typical car insurance policy by about €50, according to estimates from the insurance industry - and it may be driving up the cost of a policy by even more than that, according to Robert Smyth, fraud manager with Aviva.
With the number of cars on Irish roads hitting record levels recently, there could well be an increase this year in the number of innocent drivers being targeted by fraudsters seeking to make money from bogus insurance claims. There are already thousands of potentially fraudulent claims under investigation by insurers. Aviva, for example, has around 2,000 claimants under investigation for fraud - including between 300 and 350 people linked to seven fraud rings.
So what are fraudsters getting up to in their attempts to make money from bogus claims?
Staged car park collisions
Aviva has seen growing evidence of staged minor collisions in car parks in recent months where an innocent driver reverses out of a car-parking space - and another car deliberately collides with them. That car is typically carrying between two and three people. The innocent driver is unaware that he has been targeted by fraudsters and accepts that he is at fault. Insurance details are exchanged but the damage (if any) is so small that both drivers agree there is no need to notify gardai. The innocent driver might even offer to pay a small sum of money for the repair of any damaged paint work.
Shortly after the incident, the people in the car which deliberately instigated the collision contact the insurance company and pursue injury claims against the innocent driver. "These collisions might result in another car simply being scratched or tipped- and the collisions are so slight that there's no way you would think anyone would be injured from them," said Smyth.
The fraudsters typically claim for soft tissue injuries, such as whiplash, after these collisions. The payouts for such injuries range from €5,000 to €25,000, with the average payout at about €15,000, according to Smyth. Payouts of this size are often higher than those paid in other countries and this has encouraged fraudsters from Britain to travel here and make bogus claims, said Smyth. "Fraudsters will follow the money," said Smyth.
Should you be involved in a collision like this in a car park, contact your local gardai at the time of the incident and do not accept any liability at the scene of the accident.
Induced road accidents
Fraudsters are also targeting innocent drivers on the roads in a bid to make a bogus insurance claims.
"People need to be careful of induced car accidents," said Smyth. "For example, there could be a deliberate slam on the brakes by the driver in front of you - causing your car to go into the back of them. Be particularly careful of this at junctions and roundabouts. If someone slams on the brakes deliberately when you're looking to go onto a roundabout, it can be very difficult to avoid a collision." There is also a fraud known as 'flash for cash', where a car flashes its lights at you to allow you to take a turn - but the car keeps going after you start to take the turn and a collision occurs.
"If you're involved in a minor collision and you feel that something is not right, stop and contact gardai, particularly if the driver you have collided with is not that keen to have gardai called," said Smyth. You may have to wait a couple of hours for gardai to arrive but doing so could prevent a bogus insurance claim being made. Be particularly wary of minor collisions with cars which are carrying a group of people. "If the person you have collided with is on his own in the car, it's unlikely to be an attempt at insurance fraud," said Smyth. "Normally in setups like this, there are between two and three people in the car that you collide with."
In other staged road collisions, all of those involved in a car accident are taking part in the fraud. Innocent road users are often put in danger as a result. "Emergency services are also wasting their valuable time attending the scene of such accidents," said Smyth.
Passers-by feigning injury
Other accident set-ups involve passers-by feigning injury. An individual, for example, could pretend to have been knocked down by your car and injured - and following that, put a claim in for a non-existent injury.
"There has been a recent case where an individual jumped on the bonnet of a car which was stopped - and then rolled around the ground and feigned injury," said Smyth.
Car insurance fraud is not the only fraud which consumers need to be on the alert for this year. More consumers are running into problems with the pop-up ads that have become increasingly prevalent on social media, according to Martina Nee, spokeswoman for the consumer watchdog, the European Consumer Centre (ECC) in Dublin.
The ECC has recently received complaints from consumers about certain pop-up ads. "When a consumer clicks on the ad, they can be conned into entering a contract for online goods," said Nee. "The consumer is often asked to enter an email address and an postal address - after clicking on the ad. The trader then sends an email to them saying that the goods have been dispatched. The trader then demands money from the consumer for those goods, even though the consumer hasn't entered a contract. Consumers seem to have been targeted more by these ads in the run-up to Christmas."
Do your research about a trader before passing on any details online. Under EU rules, a trader should make it very clear that a contract has been entered into - for example, by displaying a "Pay Now" button. You are under no obligation to pay for anything if you haven't entered a contract.
Bogus tax calls
Most of us would be alarmed to get a call from the tax man demanding immediate payment of a tax bill over the phone and worried about any tax penalties which might arise if that bill isn't paid. Fraudsters are trying to take advantage of this natural reaction and last month Revenue warned that a number of individuals had received bogus phone calls from a man or woman purporting to work in Revenue. Should you receive such a call out of the blue, it is unlikely to be Revenue calling you, but a fraudster - so don't hand over any personal, bank, or credit or debit card details. Should you mistakenly do so, contact your bank or credit card company and alert the Garda.
Fraudulent emails and text messages purporting to come from Revenue were also sent to people last month - where personal information and credit or debit card details were sought in connection with a tax refund. These emails and texts did not come from Revenue. "The Revenue Commissioners never send emails or text messages requiring customers to send personal information via email, text or pop-up windows," said a spokeswoman for Revenue. "Anyone who receives an email or text message purporting to be from Revenue and suspects it to be fraudulent or a scam should simply delete it. Anyone who is actually awaiting a tax refund should contact their local Revenue Office."
The Competition and Consumer Protection Commission recently warned consumers shopping online to be wary of copycat sites set up to look very similar to well-known sites.
They're fake and chances are you will lose your money if you hand over credit or debit card details. Never buy anything online without ensuring the website you are buying from is a genuine one.
Sunday Indo Business