On 12 September 2014, the second defendant hired an Audi A1 from rental company Sixt for one day. Later the same day he telephoned the Sixt emergency line to report that he had swerved to avoid a ‘cat or fox’ and driven the Audi into collision with a ‘Ferrari’ parked at the side of the road. He stated that the driver of the ‘Ferrari’ was still at the scene and that he was angry. The phone call was a charade. The driver of the Audi was the first defendant and was well-known to the second defendant. The circumstances reported were a sham.

Subsequently, the second defendant admitted liability for the accident, facilitating the first defendant’s insurance claim against LV= and prompting the release of a payment of £29,995 for the total loss of the first defendant’s vehicle (in fact a ‘replica Ferrari’ formed of a fibreglass body kit on a Toyota MR2 chassis). Accident Exchange provided the first defendant with a BMW Z4 on a credit hire basis.


Our Netfoil database identified that the claim was high risk, prompting further investigation. The defendants had repeatedly denied knowing each other but investigations carried out by Asset Protection Unit (APU) proved this to be untrue. Facebook enquiries showed the defendants socialising together in a number of pictures posted over a prolonged period and a Gumtree advert listed their respective contact telephone numbers as vendor of a Ford Transit Van. Accident Exchange subsequently recovered the replacement hire vehicle and terminated the hire agreement.

As a result of the fraud Accident Exchange suffered loss of revenue in respect of the credit hire vehicle in the sum of £9115.50. The damage to the Audi A1 belonging to Sixt amounted to £3083.80. LV= also suffered a loss of £19,747 being the value of the ‘Ferrari replica’ less salvage.

The prosecution

We were instructed by Accident Exchange to commence proceedings for the offence of Fraud by False Representation, contrary to Sections 1 and 2 of the Fraud Act 2006. We also applied for compensation on behalf of Accident Exchange, Sixt and LV=. Faced with the weight of evidence, the defendants pleaded guilty shortly before the trial was due to begin.

At Snaresbrook Crown Court, the sentencing judge, His Honour Judge Stephen Dawson gave credit to the defendants for pleading guilty, but this earned them only a small discount to their sentences, given the late stage at which the pleas were entered. The judge took account of the first defendant’s previous record of dishonesty and passed an 18 month immediate custodial sentence. The second defendant was given a 12 month sentence, suspended for two years.

When handing down the sentences, the judge remarked that ‘insurance companies can carry some loss but this was not a victimless crime. Society as a whole was the victim; they pay for such frauds by an increase in insurance premiums.’ He also stated: ‘These offences undermine the trust that insurance companies have in members of the public.’

The judge awarded compensation to Accident Exchange, Sixt and LV=, along with prosecution costs of £17,062.

This case reminds the industry of how important data is in defeating fraudulent claims. Mass data analysis highlighted the risk that may otherwise have gone undetected. This enabled us to not only avoid an expensive civil claim, but also recover compensation for the companies targeted.

The custodial sentences and compensation awards also send a powerful message to would-be fraudsters that fraud will be detected and prosecuted, and the consequences will be serious. Insurers and anybody involved in the claims industry should be encouraged by the court’s approach to this case which we hope will lay the ground for future actions.