No Deposit Car Insurance

How to avoid being the victim of vehicle fraudsters

Cars are much harder to steal these days, and this has reduced the incidence of theft; unfortunately, the same is not true of vehicle-related fraud. Motorists need to protect themselves from scams just as they protect their property from theft. Here are a few examples of common frauds.

Internet car sales

More than 6,600 cases of internet car sales fraud, with a total value of over £18 million, were reported to police in the UK in 2013. A typical million-pound case recently involved a gang who advertised cars on websites. The cars were real, but prospective buyers were told to put money in a holding account before the transaction was settled, so that they could have a test drive before making a final decision. In fact, the holding account and the sellers disappeared. This kind of fraud sometimes involves plausible-looking websites, or adverts on reputable sites such as Ebay, but the identities of the sellers, and their bank accounts, are bogus.

How to avoid this scam

Holding, or escrow, accounts can look safe but they are quite easy to set up fraudulently. Car buyers should never transfer money into an account which cannot be verified. A genuine seller will be happy to use a bank agreed with the buyer for the transaction.

Overseas sales

In this version of the old-style advance fee confidence trick, sellers advertising cars are contacted by an overseas buyer who sends a cheque for the asking price plus an extra thousand or so for the cost of shipping the car via a specified agent. The seller banks the cheque and sends the shipping fee as instructed, only to find out a few days later that the bank will not after all honour the cheque and the buyer and shipping agent can no longer be contacted.

How to avoid this scam

The give-away feature of an advance fee fraud is the apparent overpayment, to include the shipping fees, by the potential buyer. Why has the buyer not paid the shipping agent directly?

Crash for cash

This increasingly common crime is now estimated to cost the insurance industry and its customers about £400 million per year. It is believed that 300,000 bogus accidents may have been deliberately staged during the past five years. As well as damage to vehicles, fraudsters routinely claim for whiplash and other unverifiable injuries, but their victims' injuries may well be genuine. The criminals who stage crashes in order to make fraudulent insurance claims are often part of organised gangs, using the profits to fund other crimes, such as drugs and weapons dealing.

How to avoid this scam

Motorists are increasingly using dashboard cameras to protect themselves against this dangerous practice. Fortunately, the insurers themselves have begun to share information with the intention of detecting suspicious patterns of accidents and claims.

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