In recent news, a criminal South Wales family were caught for a cash-for-crash scam worth as much as £2m.
The gang was apprehended as the result of a highly-complex police investigation that exposed Wales’s biggest, most “highly organised”, motor insurance fraud to date.
The group, based around a family called the Yandells, became experts in the running up of a large number of insurance claims for exaggerated or completely fictitious motor collisions and related ‘injuries’.
Regular payments were siphoned off by a network of more than 80 conspirators – for sums of anything from a few thousand to £40,000. Police suspect there may be another 100 or more involved although they are yet to be prosecuted.
How did this blatant criminality go undetected for so long? The truth is that these fraudsters were not using unusual tactics – indeed, their ring seems like a fairly
run-of-the-mill operation. And because soft tissue injuries are easy to falsify, difficult to validate, and expensive to treat, they are a favourite among fraudsters, with participation from doctors, lawyers and even bodyshops, via staged bodywork damage, such as the Yandells’ own.
So the reality is, rings like the Yandells’ are everywhere – working to stage fake accidents and claim soft tissue injuries based on endless ‘paper collisions’ involving fake drivers, passengers, pedestrians and witnesses. In fact, fraudsters often create and manage rings by ‘recycling’ participants. So one accident may have a particular person playing the role of the driver, in another, the same person may be a passenger or a pedestrian, and in another, the witness.
It is important to appreciate the way relationships play a huge part in cash-for-crash.
Clever use of identities can generate a large number of costly fake accidents, even with a small number of participants. In a six-person alleged collision, for example, you may have three false accident reports, with each person playing the role of ‘driver’ once and ‘passenger’ twice.
Assuming an average claim of £20,000 per injured person and £5000 per car, the ring can claim an astonishing £390,000 in total. If ten people collude, five false accidents are staged, and each person plays the role of the driver once, a witness once and a passenger three times, assuming an average claim of £40,000 per injured person and, again, £5000 per car, the ring can claim up to £1.6m for 40 people ‘injured’.
No wonder the Yandells of the world recognise all this as a profitable enterprise to be in – and it is a common pattern, but not an easy one to detect.
The truly shocking aspect of the story is not what the Yandells were doing, but how they were only caught by complete accident. It seems the authorities had no idea this was going on and only stumbled on the ring’s activities; if a police officer hadn’t spotted a piece of paper with its handwritten instruction of ‘What to say to the insurance company,’ they’d still be perpetuating their scamming today.
Another huge factor is social media. The police were able to devote resources to tracking the gang over Facebook to work out who was who and how they were connected – but that was only after the investigation was launched; they simply wouldn’t have been looking there otherwise.
Once alerted, lawmakers did a very impressive job of investigative digging, and shadowing the gang on Facebook and social media – and all power to them for their excellent work. But the truth is that the conventional methods the insurance sector has been using simply cannot keep up.
Insurance firms are relying on antiquated technology – standard relational databases are used in most insurance firms today to spot fraud. But relational databases work well for discrete data, but they are not equipped to deal with the bigger network of relationships that fuel the cash-for-crash ‘industry’.
IT analyst group Gartner, which is highly concerned about these types of fraud, cautions, “[We] don’t consider traditional technology adequate to keep up with criminal trends.”
The only real solution is to take advantage of technology that excels at spotting new fraud patterns, and in real time. Step forward graph databases, created to work with data at scale by manipulating the patterns in it.
That is because exploring the way people are connected cannot be done with just records or tables. In programming terms, to discover a cash-for-crash ring requires a number of tables in a complex schema such as alleged accidents, vehicles, owners, drivers, passengers, pedestrians, witnesses, providers, and joining these together multiple times – once per potential role – in order to uncover the full picture.
Because such operations are so complex and costly in computer performance, particularly for large datasets, this analysis is often overlooked with conventional relational databases.
On the other hand, finding fraud rings with a graph database is a much simpler question in technical terms. That is because they are designed to query intricate connected networks, so they can be used to identify fraud rings like the Yandells’ in a fairly straightforward fashion.
As a result, this approach should be added to the insurance company’s standard checks at appropriate points in time, such as when the claim is filed, to flag suspected fraud rings in real time. How else can we keep premiums low?
Data point relationships
The good news for insurers and the Crown Prosecution Service is that graph databases are a new way of looking at the relationships between data points which is proving highly effective at spotting the hidden connections between ostensibly regular customers and what they might actually be more dishonestly up to. Many experts believe graphs may be the only way to work with the complexity of Internet and social data to do just this, in fact.
We hope that Operation Dino, the South Wales Police’s operation to uncover this fraud ring is seen as the success it obviously is. But because cash-for-crash fraud has become a major issue for the insurance industry, with the Association of British Insurers estimating that deceptive claims add an extra £50 to premiums annually, we need to stop all this expensive criminality perpetrated by the Yandells of this world.
The worry is that without the use of tools like graphs, fraud rings such as this could just be the tip of a gigantic cash-for-crash iceberg. Can the industry tolerate that?