'Cash-for-crash' scam in Durham 'put car insurance up by £100'
- 18 March 2013
- From the section Tyne & Wear
A "crash-for-cash" scam run by a 60-strong gang swindled so much money car insurance firms raised bills of people in the area by about £100 a year.
The fraud in County Durham involved faking accidents and making false whiplash compensation claims.
The 60 either admitted or were found guilty during hearings held at Newcastle Crown Court since last March.
Durham Police uncovered the fraud while probing the activities of members of the Wright family of Burnhope.
A ban on reporting the proceedings has just been lifted.
Police said the scheme had seen motorists in the Derwentside area "typically paying an extra £100 a year" for insurance.
Hire car scam
The "crash-for-cash" accidents involved drivers slamming on their brakes at junctions, hoping the driver behind would crash into them.
The fraudster and his passengers then claimed compensation for whiplash injuries.
The gang then came up with ways of swindling even more money out of the insurance industry by having their associates in both cars, the court heard.
They also controlled an auto recovery company, which would invoice insurance companies for removing damaged vehicles from crash scenes.
The same company, PJ Autos, based at Craghead in County Durham, would then also charge for hire cars, the court heard.
Detectives discovered PJ Autos had submitted invoices showing one car was hired out to four different people at the same time.
Ch Supt Rob Coulson, of Durham Police, said: "We didn't just come across this activity. It was as a result of our communities telling us that organised crime groups were making their lives difficult.
"This fraud is affecting every honest law-abiding car insurance holder.
"In Derwentside, car insurance premiums have increased well in excess of the national average, with motorists typically paying an extra £100 a year.
"This is an area with limited employment opportunities where many people have to travel out of the area to find work. They need their cars, yet they are hit with higher than average car insurance premiums."
PJ Autos was run by Paul Jonathon Wright, one of seven members of the Wright family behind the scam, jurors heard.
He is yet to be sentenced after being convicted of conspiracy to commit fraud.
Paul Jonathon Wright's brother, Alan Wright, was jailed for four years for his part in the fraud. Alan Wright's son, Andrew Piggford, was sentenced to two years.
Other members of the family were Jonathon Wright, who received a 30-month jail sentence; Joseph Anthony Wright, who was sentenced to 20 months in prison; Joe Wright, who was sentenced to 18 months suspended for two years; and Robbie Wright, who received a nine-month sentence.
The investigation team looked into 1,800 accidents and 261 were identified as being fraudulent.
Police concentrated on 25 of theses accidents and found they involved £514,000 being obtained for claimants, but police believe the scam netted at least £3m, the hearing heard.
Ben Fletcher, director of the Insurance Fraud Bureau (IFB), said: "Convictions send a clear message - insurance fraud is not a victimless crime.
"The criminal gangs organising these scams use the proceeds of insurance fraud to fund other forms of serious crime.
"Unfortunately, this is not an isolated incident. The IFB is currently investigating 49 organised fraud rings across the UK, with the combined value of those scams totalling £66m. "