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The CHO is active in Westminster and Whitehall representing the interests of its members.

Many Members of Parliament have an interest in our industry, either because they are members of Select and other Parliamentary Committees, or because they have a constituency interest. We ensure that politicians and officials are regularly informed on industry matters where there are political or legislative implications.



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Policy: 15 March 2017 Please find attached the full and final judgement from the Court of Appeal in the cases of Clayton and McBride, published today, 15 March 2017.
Policy: 7 March 2017 The CHO responded to the MoJ's call for evidence in relation to credit hire. A copy of the response is attached. The MoJ is due to respond to the consultation before 7 April 2017. 
Policy: 24 February 2017 Government announces provisions in the Prisons and Courts Bill for personal injury reform: The government has announced that new measures to reform personal injury will form part of the Prisons and Courts Bill, published today. The MoJ also released part one of its response to the consultation, which covers whiplash reform. Part two of the Government response is currently being prepared and will be published in due course. It will cover the issues set out in Parts 6 and 7 of the consultation related to implementing the recommendations from the Insurance Fraud Taskforce and the ‘call for evidence’.  So there is no specific reference to policy decisions for credit hire in today’s announcement. The MoJ does note that 7% of the 625 responses to the consultation related to credit hire. Part five of the Bill, relating to Whiplash Injuries is available on this link: https://www.publications.parliament.uk/pa/bills/cbill/2016-2017/0145/cbill_2016-20170145_en_7.htm#pt5-pb1-l1g61 A summary of the key features are: The introduction of a tariff of fixed compensation for pain, suffering and loss of amenity for claims with an injury duration of between 0 and 24 months; Providing the judiciary with the facility to both decrease the amount awarded under the tariff in cases where there may be contributory negligence or to increase the award (with increases capped at no more than 20%) in exceptional circumstances; Introducing a ban on both the offering and requesting of offers to settle claims without medical evidence; Increasing the small claims limit for RTA related personal injury claims to £5,000; and Increasing the small claims limit for all other types of personal injury claim to £2,000. The measures are planned to receive Royal Assent by 1 October 2018. Responses to the news from insurers and the claimant sector were as expected. Access to Justice (A2J’s) response can be found on this link: http://accesstojusticeactiongroup.co.uk/access-justice-responds-publication-prisons-courts-bill/ The government continues to argue that the £1bn of savings expected will feed through to £40 savings on motor insurance premiums, but the ABI is already saying that the reform to the discount rate will swallow up that saving, so there is not even a pretence at from the industry that the £40 is a runner.  There has been no date set for the publication of part two of the government response, but the MoJ has said that it will be before 7 April.
Policy: 27 April 2015 CHO submission in response to the Interim Report of the Insurance Fraud Task Force, chaired by David Hertzell Introduction The Credit Hire Organisation (CHO) is pleased to be an active member of the Insurance Fraud taskforce, and strongly supports Government and industry efforts to examine in more detail the nature, scope and impact of insurance fraud. We agree that the investigation needs to be extended beyond the insurers per se, and encompass all those bodies, including the credit hire sector, which continues to be adversely affected by fraud, and we look forward to playing a full part in the ongoing debate. About the CHO The CHO is a trade body with 66 members that represents the interests of Credit Hire Companies (CHCs). CHCs provide temporary replacement vehicles (TRVs) to non-fault parties following road traffic accidents. The industry employs thousands of people all over the UK, and our members are dedicated to providing customers with high quality service, as well as ensuring their rights are upheld in the unfortunate event of their vehicle being off the road. Customers’ rights to a replacement vehicle were upheld by the Competition and Markets Authority report last year. CHO member companies have had to deal with criminal activity against them, and the cost of crime – in both stolen assets and the time/cost of investigation, is substantial. CHO members work closely with the police, where we can, and the CHO is determined to work with all stakeholders to reduce the incidence of motor insurance fraud. Overarching comments: The cost and extent of fraud The National Fraud Authority estimated insurance fraud at £2.1 billion in 2012. That figure was based on data provided by the ABI and IFB. It breaks down into £1.7 billion in hidden fraud loss, £392 million in organised ‘crash for cash’ fraud, and £39 million in identified insurance fraud (where claims are paid before they have been identified as fraudulent). In a press release issued in May 2014, the ABI reported that 59,900 fraudulent motor claims, with an aggregate value of £811 million, were detected in 2013. This figure represents 62.34% of the total value of £1.3 billion of uncovered fraudulent general insurance claims reported in the same year which, in itself, was an increase of 34% on the number uncovered in 2012, This reported increase in detection suggests that insurers may be getting better at spotting fraud earlier or that the detection rate remains the same and fraudulent claims are still increasing at a rapid rate. Fraudulent/exaggerated claims represent an important problem in insurance markets, the costs of which pass though by way of increased premiums to all policyholders.  As well as being of a high magnitude, the complexity of insurance fraud makes detection difficult; the discovery of one ‘scam’ often leads to more aggressive and effective counter measures from the offender especially where the fraud is part of an organised campaign. It is clear, from discussions we have had with representatives of the ABI, that their estimates of the total cost of fraud are just that: estimates, based on research carried out in 2009 and updated to account for claims inflation and their view on the increase in fraud incidence. Neither is it clear whether the  £392m in ‘cash for crash’ fraud relates to avoided claims (what the industry would have paid had fraud not been detected) or claims where the industry has paid out (and possibly recovered it back). There is no empirical data that paints a true picture of the extent of fraud, where it occurs, how much it costs the industry and thus what the effect is on premiums. Until serious and detailed research is conducted, these ABI-generated figures must be taken for what they are, a best guess, and it is dangerous to implement policy without a detailed understanding of the facts that underpin new policy initiatives. Law enforcement The CHO has expressed concern about law enforcement for insurance fraud, both to MPs and at the Insurance Fraud Taskforce. We have briefed officials at HMT on this matter, so we are keen to ensure this issue also comes under the remit of the taskforce and action to improve law enforcement is on the taskforce’s agenda.  Our key concerns are as follows: The members of The CHO are routinely impacted by insurance fraud and they have raised with the APPGIFS chairman a frustration that IFED will not investigate a fraud case unless that case is referred by a paying insurer. This means that insurers now have a dedicated private police force and that, as a consequence, there is an impact on the non-insurer victims of insurance fraud. Bus companies, self-insured fleets and any entity which insures its fleet with a high policy excess, such as a credit hire company, can face the same issues, although credit hire companies are easier for criminals to target as a basis for a fraudulent insurance claim with more lucrative assets at risk. Law enforcement key points There has been a change in the ability of victims to access justice post the formation of IFED.   Eight years ago Accident Exchange, a leading CHO, worked with the Metropolitan Police on one of the first high profile insurance fraud cases (Masi Naqshbanhi). Evidence from telematics devices in the cars hired by Naqshbandhi together with further documentary evidence found in hire vehicles recovered from the gang when the fraud was suspected, were pivotal in the police case which ultimately led to Naqshbandhi being sentenced to eight years in prison.   Post the formation of IFED, Accident Exchange experiences significant resistance in respect of similar cases. The difference appears to be the role of the City of London Police as the national lead on fraud and the creation of IFED and the effect that has had on other forces appetite (or resources) for investigating this type of crime.   In the connected world occupied by fraudsters, police forces should work together across boundaries. This rarely happens.  Locally elected Police and Crime Commissioners set their local force priorities based on local funding constraints and insurance fraud does not feature in any of the provincial police forces as a priority. In addition, local forces have resource constraints and will not work across force boundaries where the result will be a reduction in a neighbouring force’s crime statistics at their expense.   CHCs are often advised by local forces to refer identified cases of insurance fraud to IFED, but IFED will not tackle anything other than those cases referred by an insurer that funds them.  In the FAQ section of their website, and in answer to the question: “How do I refer a case to IFED?” the answer states: “Insurers can report cases that meet the acceptance criteria to IFED via their industry representative (SPOC) by completing a referral form. Cases can also be referred via the Insurance Fraud Bureau (IFB) – [also funded by the ABI] - or by regional police forces.”   IFED goes on to note that: “[Regional] forces will take on insurance cases if it falls within their case acceptance criteria and they have the resources to manage it; other forces will still accept cases of insurance fraud for investigation.”   Regrettably, that is not the case in practice. Regional forces do not take on cases for the reasons stated above. CHOs find themselves in a cleft stick, even with cases where the perpetrators are caught bang to rights.  Criminals not only have carte blanche to re-offend, but, in reducing the detection opportunity, IFED inadvertently increases the propensity for  insurance fraud. That cannot be an appropriate outcome.   The Government has become increasingly focused on fraud, perhaps responding to public concern, but there is still not enough resource committed. More importantly the existence of a private police force (IFED) acts to the detriment of those non-ABI victims and has created an environment where organised crime can grow with little consequence for the fraudsters. In response, CHO representative companies have agreed to discussions with police officers in IFED, and the All Party Group on Insurance and Financial Services (APPGIFS) has promised to write to UK police and crime commissioners urging them to put fraud further up their forces’ agendas But we urge more tangible support from HMG, including a re-balancing of police willingness to tackle this form of crime. It is not acceptable that the only beneficiaries of IFED law enforcement are insurers rich enough to pay for the service. Un-recorded costs There is a hidden cost to insurers and CHOs in that insurers will refuse payment on a hire case citing ‘fraud,’ and then not share the reason.  This delays payment and increases processing costs for all concerned.   Fraud databases are prone to false positives and some insurers react to even an amber flag as a matter of course. On an estimate that 1-5% of cases are affected, this is potentially a significant cost given the scale of the industry. Insurers will often refuse to quote a potential customer for motor insurance on the grounds that they suspect fraud, but the details of that individual are not flagged for the benefit of other providers, leaving the individual to find cover from other suppliers. There is no mechanism to share this data, and this may be because insurers do not want to lose competitive advantage.  The impact on consumers. Identity theft Credit hire fraud is often committed by organised criminals. These people use false identity papers to procure vehicles, and consumers whose identity has been stolen are often completely unaware of their predicament until they become subject to a criminal investigation, and/or are presented with large bills, causing major distress. The police have acknowledged that identity theft is a significant and growing problem, and there is a clear read across to motor fraud, whether in the credit hire sector or elsewhere across the motor insurance industry Detailed response to the interim report In our response to the interim report, the CHO has chosen to focus on those areas and questions for further debate which are of direct relevance to our members, namely Q23, Q24, Q25 and Q27. Q23: Is fraud data being adequately used, and if not, why not?

 The bald answer to the question is no, fraud data is not being adequately used. While calls have been made from many parts of the insurance industry to share data, there is very little evidence of collaboration. For many institutions the sharing of data creates a number of conflicting issues: (a) For some access to data is perceived as a competitive advantage. Insurer to insurer sharing may occur through data managed by IFB but certain insurers believe their investment in counter fraud activity should give them competitive advantage and perhaps lose sight of the bigger prize of reducing or attacking the fraudster through a more collaborative approach. The recent slew of annual results illustrated yet again that competition in the private motor market is intense, mitigating against data sharing. (b) Where data is shared between insurers there are unwritten yet nevertheless real boundaries between which, if any, non-insurers it is shared with. Our suspicion is that this reluctance may be caused by perceived distrust between insurer and non-insurer, even though that entity may be a well resourced and reputable business (solicitor, large fleet operator or credit hire business) or it may be a result of concern about the quality of the data and the potential for making an allegation of fraud to another organisation which is unsubstantiated. (c) The lack of a cohesive and robust standard for the storage of data to allow proper data mining and build more effective knowledge amongst potential victims of fraud is problematic; and (d) Concerns about how corporately stored data will be used and whether it might be used against the ‘sharing entity’ is of concern to some. Q24) What impediments are there that hinder fraud data-sharing? The biggest impediment is clarity from the ICO as to what is an acceptable basis to acquire, store and share data for the purposes of detecting or avoiding fraud and, more importantly, a framework within which those sharing such data can have confidence in both the use to which it will be put and the means by which fraud alerts can be given and acted upon. The NFIB may, potentially, have a greater cross industry role to play in the aggregation and dissemination of fraud intelligence across industry barriers but their ability to develop in a more compelling role may be constrained by funding from Central Government.  Q25) What are the most effective ways to extend fraud data-sharing with the view of tackling insurance fraud? Those who are victims or potential victims need to be given a framework for engagement. Clarity should be provided by government, including the creation of an oversight body to act as a regulator with a remit to eliminate the current mechanisms where data is either not shared or is inadequately shared. The only winners under the current unsatisfactory arrangements are the criminals, who appear to be more adept and entrepreneurial than those large entities currently defining the pace of evolution and rules of engagement for dealing with this issue. Q26) Are there any groups outside of the insurance industry with whom fraud data should be more actively shared? Claimant solicitors, credit hire companies and conventional hire companies are the obvious candidates but so too is the NFIB. Q27) What are the greatest risks to privacy in fraud data-sharing and what should be done to mitigate these? So much of the legislation governing data and data sharing derives from Europe where there appears a greater respect for individual privacy. However, a large proportion of the fraud we see has European connections and so engagement with the problem needs to take on a more continental approach with stakeholders perhaps engaged from other EU Member States. That aside, better communication to the public of the scale and extent of fraud today and the steps that might ensue from this inquiry would be a good starting point. For example, the insurers and the police, working with the MIB, have made uninsured driving far easier to tackle and a more socially unacceptable crime than it ever was. The role of the media in explaining the benefits to society of tackling this issue, therefore, is a good lesson and worth replicating in building a story associated with fraud, what it costs, how it will be detected and how it will be dealt with. As part of that, however, there does need to be clarity and transparency about what data is held about individuals in the same way that there is clarity and accessibility in an individual’s financial history. However, the Insurance Fraud Register in its current format is not enough. What is essential is that policy direction in this area is predicated on a rigorous and thorough exercise to quantify the scale, nature and scope of insurance fraud. At present the industry is groping around in the dark with ‘facts’ that don’t stand up to objective scrutiny.
Policy: 12 February 2015 CHO Briefing note for members of APPG Insurance and Financial Services Insurance fraud – what progress has the industry made and are the resources being fully utilised?
Policy: 1 September 2014 The CHO Ltd (the “CHO”) Summary Position Paper: Competition and Markets Authority (“CMA”) investigation into the UK private motor insurance market
Policy: 4 August 2014 The CHO Ltd (the “CHO”) response to the notice of further consultation on remedy 1C dated 28 July 2014
Policy: 8 July 2014 The CHO Ltd (the “CHO”) response to the provisional decision on remedies issued 12 June 2014
Policy: 11 June 2014 CHO comments on the Competition and Markets Authority Report: Provisional Decision on Remedies; Private Motor Insurance Market Investigation
Policy: 2 June 2014 The CHO Ltd (the “CHO”) Summary Position Paper: Competition and Markets Authority (“CMA”) investigation into the UK private motor insurance market
Policy: 9 February 2014 Private Motor Insurance Market Investigation
Policy: 4 February 2014 Private Motor Insurance Market Investigation
Policy: 16 January 2014 Private Motor Insurance Market Investigation
Policy: 6 September 2013 Private Motor Insurance Market Investigation (“Investigation”)
Policy: 9 January 2013 The Supply or Acquisition of Private Motor Insurance and Related Goods and Services (the “Market”)
Policy: 15 October 2012 The Supply of Private Motor Insurance and Ancillary Goods and Services (the “Market”)