A popular scheme around fraudsters is to use fake car accident to claim money to insurance companies. Properly executed the scheme can pay out handsomely. Everything about these accidents can be fake : fake driver, fake vehicle, fake witnesses. Everything but the money. It is estimated that fraud cost to US insurance companies up to $80 billion per year. That is a lot of money and consumers are paying for it. In the UK for example, each driver pays an additional $144 per year for his insurance because of fraud.
The problem with scheme like whiplash for cash is that it targets the insurance companies weaknesses. Faced with thousands of claims they have a hard time finding suspicious behavior in the data they process. Luckily, like with stolen credit cards or loan fraud, whiplash for cash criminals can be identified with graph technologies.
In order to understand why, we need to see how criminals operate first. It all start with one or more ring leaders. Here is how they usually work :
- the ring leaders recruit drivers, passengers, witnesses : they will be the ones claiming money to insurance companies. These persons may or may not exist as it is possible to create synthetic identities ;
- the ring leaders find vehicles ;
- the ring leaders, the drivers and the passengers organize an accident : this is where it all comes together. The accident may happen or may not happen but everything about it is scripted. Everyone has to agree on a time, a place, a scenario ;
- the passengers, the drivers and the witnesses fill up insurance paperwork : in order to claim money, they have to fill an accident report and various forms. At this stage, the fraudsters may use a doctor as an accomplice to justify the claims ;
- the company processes the claims : it may or may not investigate the claim. In any case, the preparation of the fraudsters shelter them from being easily unmasked ;
They money the criminals can make out of an accident depends on a few variables. The damages received by the car and the injuries sustained by the “victims”. Savvy criminals know better than to claim very high amount. The general idea is to fly below the radar and avoid scrutiny from insurance investigators. This means limiting the damages made to the car and the injuries. According to Gorka Sadowski from Akalak, it is possible in one accident to claim $20k per person in injury and $5k per car. Assuming 6 persons per car, that’s $250k. That is quite a lot of money, especially if the risks involved are low.