Report: Romance Scammers Manipulate Victims into Making Fraudulent Auto Insurance Claims

Insurance fraud investigators have uncovered a disturbing new trend where romance scam victims are being manipulated into participating in fraudulent motor insurance schemes, according to a report released yesterday by the Insurance Fraud Bureau (IFB).

The scammers, who initially target victims through dating apps and social media platforms, build emotional connections before exploiting these relationships to perpetrate insurance fraud. Victims are persuaded to front motor insurance policies for the scammers, often unaware they are participating in criminal activity.

“These romance fraudsters are employing increasingly sophisticated tactics,” said Ben Fletcher, Director of the IFB. “They establish trust over weeks or months before introducing the insurance element of their scam, making it particularly insidious and difficult for victims to recognize.”

The scheme typically works by convincing victims to purchase insurance policies in their own names for vehicles they don’t own or drive. The scammers, who are the actual users of these vehicles, avoid higher premiums or having policies in their names due to previous claims history or driving offenses. When accidents occur, the victims are pressured to file claims, unwittingly becoming complicit in insurance fraud.

The IFB investigation revealed that many victims only discover the fraudulent nature of their involvement when contacted by insurance companies investigating suspicious claims. By this point, many have already suffered significant financial and emotional damage.

“What makes these cases particularly complex is that the victims often don’t initially see themselves as victims,” explained Sarah Hill, a fraud psychology expert consulted for the report. “The emotional manipulation is so effective that many believe they’re helping a loved one rather than participating in fraud.”

The report indicates a 27% increase in these hybrid romance-insurance scams over the past year, with the average financial impact per victim exceeding £3,200 when accounting for invalidated policies, legal complications, and potential criminal records.

The insurance industry has been hit particularly hard in the motor sector, where premium rates have already been rising due to inflation and increased repair costs. The Association of British Insurers estimates that fraud adds approximately £50 to every policyholder’s annual premium.

“These scams represent a double victimization,” said Caroline Mitchell, Chief Claims Officer at a major UK insurer. “The romance scam victim suffers personally, while the cost of fraud is ultimately passed on to honest policyholders through higher premiums.”

Law enforcement agencies are working closely with insurers to combat these schemes. The City of London Police’s Insurance Fraud Enforcement Department has established a dedicated team to investigate cases where romance and insurance fraud intersect.

Detective Chief Inspector Tom Bradshaw commented: “The criminals behind these scams are often part of organized groups operating across multiple jurisdictions, making investigation challenging. However, we’re developing new approaches to identify patterns and connect cases that previously might have been treated as isolated incidents.”

The insurance industry is responding with enhanced detection methods, including advanced data analytics to identify suspicious policy applications and claims. Several insurers have implemented AI systems designed to flag unusual patterns of behavior that may indicate fronted policies.

Consumer awareness campaigns are also being launched to educate the public about the warning signs of these hybrid scams. The IFB has published guidance urging people to be cautious about requests to take out financial products for others, even when emotionally involved.

“Never agree to front an insurance policy for someone else, no matter how compelling their reasons might seem,” warned Fletcher. “If you’re asked to insure a vehicle you don’t drive or own, that’s a major red flag.”

For those who suspect they may already be involved in such schemes, the IFB has established a confidential hotline offering advice without immediate legal consequences, recognizing that many participants are themselves victims.

The report concludes that addressing these scams requires a multi-faceted approach involving insurers, law enforcement, and public education. It recommends enhanced verification processes for new policies, increased information sharing between insurers, and specialized support services for victims of romance-based insurance fraud.

As dating apps and online relationships become increasingly common, authorities fear these schemes may continue to grow without significant intervention and public awareness.