1. James Bilham
The CHO
Referral sources and Fraud Prevention

2. Not a single vote in favour of Fraud.
OBJECTIVES
1. The CHO’s
Protect the reputation of Credit Hire Organisations
One bad claim can taint a single organisation
Multiple bad claims can taint the whole market.
Brief the The CHO membership on referral source risk
Not a single vote in favour of Fraud. 2

3. Why Referral Sources
Commercial realities of credit hire make it sensitive
A bad referral source can generate a high volume of bad claims in a short period of time.
Significant Financial Risk
Insurer does not know anything about that referral source
Victim CHO seen as common denominator. 3

4. How do fraudulent referral sources
become a problem?
They are organised criminals.
Professional
Highly Organised
Highly Effective
Conmen 4

5. It is happening now.
Any CHO, however efficient can, and likely is and likely has been a victim of fraud 5

6. Don’t be ‘That guy’ 6

7. Beginning, Middle and End.
The Story:
Beginning, Middle and End. 7

8. The Beginning:
4/5 years ago two Reputable CHOs (Members of The CHO and with positions on the executive committee) take a series of claims from a referral source
‘Nice’ to deal with
Professional
First few hires are easy to recover and volumes are increased
After a while Hill Dickinson are approached by insurer clients to investigate the two CHOs, both Netfoil members.
Hill Dickinson collaborate with the CHOs and identify a common referral source.
Claims are defeated. CHOs repair their reputation with the
insurers and an intelligence alert is issued 8

9. The Middle:
2 years ago, the referral source re-establishes itself under a slightly different name and refers a series of claims to a Netfoil Member, and another CHO (CHO members) 9

10. 10

11. The Middle:
After a while the Netfoil members starts to receive letters from a defendant law firm and ask HDCFG for assistance investigating the claims. 11

12. 12

13. The Middle:
HDCFG and Netfoil member liaise with the Non Netfoil member to identify all claims referred by that source. 13

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15. 15

16. The Middle:
The referral source explains the connection away as an ‘admin error’ – the claims form had been duplicated but the number not removed.
In the meantime enquiries are made with the parties involved in the claims 16

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18. 18

19. The Middle: It was clear the referral source had been lying.
With convincing evidence of fraud the role of the referral sources is investigated 19

20. 20

21. 21

22. The Middle:
The Referral source was clearly involved. The bigger picture was even more revealing 22

23. 23

24. The End:
The fraud perpetrated has a value (across all claims) likely to be in excess of £1million.
Having firmly established that the claims are extremely likely to be fraudulent the CHOs, with the assistance of HDCFG, are pursuing their clients for outstanding credit hire, where appropriate.
It seems likely that the credit hire companies involved will lose in excess of £100k in unpaid credit hire bills. 24

25. The Moral of the Story?
Without open dialogue, and a bit of luck, these fraudsters would still be referring claims to the same legitimate CHOs
The most effective frauds are those that the fraudster commits without detection.
The best fraudsters are one step ahead, intelligent, organised and professional. Even the best Credit Hire operators can be victims.
The most effective way to prevent, detect and prosecute insurance fraud is through collaborative approach to data sharing. 25

26. What are we doing about it:
Netfoil ACE – Proven Fraudsters
Hill Dickinson continue to develop our claims risk algorithm.
With complex rules, profiling a claim on its characteristics, clean skins become easier to detect. 26

27. What can you do about it:
Collaborative data sharing and fraud alerts are, and remain vital in the fight against fraud.
Well trained and properly informed claims teams are the front line in the fight against fraud
Good, effective due diligence can reduce the risk. 27

28. The Sequel:
Targeted recovery actions against claimant, directors and private prosecutions and prove cost effective discouragement tools. 28

29. Questions? 29