One couple bought a damaged car, stored it for two months and insured it with 11 different companies before claiming a total of pounds 40,000 and arranging for 11 different engineers to inspect the wreckage.
The swapping of motor details is an extension of the Claims and Underwriting Exchange (CUE) set up last November to compare notes on household insurance claims and reduce the number and cost of fraudulent applications, which add at least 4 per cent to annual premiums for all policyholders, and probably much more.
It will also cover some of the ground staked out by the Motor Industry Anti-Fraud and Theft register, but its backers believe it will be more comprehensive and provide cross-references to fraudsters in other sections of the insurance industry.
It is widely believed that fraudulent claims are rife, and there is little hope of a spontaneous reduction. A poll of 1,000 people organised by the Association of British Insurers this summer found that 36 per cent thought the general public a little less honest than 20 years ago, while 47 per cent felt they were a lot less honest. Some 60 per cent thought individuals under 35 were less honest than the older generation, and 77 per cent believed today's children would be less honest when they grew up.
Without the exchange of information, household policies for both buildings and contents are wide open to abuse, and persistent fraudsters are hard to trace especially when policyholders change their insurers regularly. Insurance companies believe a steady stream of claims are made on contents policies by people who have lost a camera or a piece of jewellery that they may never have owned.
Sometimes fictitious items are lost more than once. Although insurers often insist on proof of purchase, it is not unknown for fraudsters to buy items, get a receipt and then return the goods for a credit note and keep the receipt. Steep rises in insurance premiums in the late 1980s tempted many previously law-abiding policyholders to make bogus claims to offset high costs.
According to the ABI, fraud costs the insurance industry around pounds 600m a year. The total may have come down by as much as 25 per cent in the past three years, but this is not thought to reflect greater honesty. It is more likely the credit is due to improved security measures, including window and door locks and the heavy-duty anti-theft devices for immobilising parked cars. These have been encouraged by insurance companies publicising offers of discounts on premiums for policyholders who have invested in security measures.
The downturn in claims may also reflect the surging premiums unleashed at the end of the last decade. Hard-pressed policy-holders who may once have been tempted to make extra claims are no longer under such pressure.
There is some reason to believe that CUE has already helped to make policyholders more cautious, but the ABI believes fewer than 50 per cent of fraudulent claims are being picked up. Insurance companies hope their offensive will really pay off when the scheme is extended first to motor insurance and then, next year, to travel insurance.
Many policyholders are covered twice when they travel - by their own personal all-year insurance and specific insurance sold with their travel package. Others simply take out multiple insurance with the aim of making multiple claims.
Although insurance companies ask on claims forms if the items lost are covered by domestic insurance, there is no way of identifying double or multiple claims.
Next year there will be. However, a number of companies have so far refused to take part in CUE, perhaps because they feel they may be asked to reveal commercially sensitive information useful to competitors. Those that participate may be tempted to hope the names of refusenik companies become known, as fraudsters could well be interested in identifying targets that are not at present exchanging information.