• Preventing Fleet Fraud

    05/04/2017

    Fleet fraud is costly. Falsified and inflated claims cost billions of pounds a year. A staged accident or injury claim by an employee can mean expensive payouts and increased insurance premiums, so it is essential that your business takes steps to prevent and detect employee fraud.

    Anti-fraud measures and internal controls can and should be designed and customised for each individual organisation based on its unique characteristics. In addition, stay alert for the following red flags:

    • Drivers with a history of prior accidents of similar circumstances.
    • Drivers that demonstrate familiarity with claims process and claim evaluation.
    • An overly enthusiastic witness present at the accident scene.

    Fleet management programmes that include a fleet safety policy are most successful at preventing fraud when they cover the following areas:

    1. Management commitment:  Clearly define management’s role and commitment to preventing and detecting fraudulent claims. Most perpetrators of fraud engage in illegal conduct only when they perceive they will not be caught.
    2. Written policies and procedures:  All permitted and prohibited driver behaviour, along with proper procedures to follow in the event of an accident, should be clearly listed in a written policy.
    3. Driver agreements:  Documenting a driver’s commitment to conform to all policies and procedures can help deter aberrant behaviour. If an organisation imposes the perception that all illegal acts will be detected, it deters occupational fraud.
    4. Driving records checks: Verify that drivers have the proper entitlements to drive. Also, sometimes DVLA register records can be shared (with the consent of the driver), with organisations that show a demonstrable and relevant need for the information.
    5. Crash reporting and investigation:  Conduct thorough investigations of each claim. Provide forms for employees to complete in the event of an accident.
    6. Vehicle selection, maintenance and inspection:  Conduct regular inspections to demonstrate a commitment to preventing accidents and fleet fraud.
    7. Disciplinary action system:  Make the serious repercussions of fraud clear, including legal action and termination. Adopting concealed internal controls may assist in detecting fraud, but it generally does not prevent it because employees are unaware of their presence and potential detective ability.
    8. Reward and incentive programme:  Reward employees for good driving habits and lack of accidents and claims.

    For any business operating vehicles under a fleet motor insurance policy, it is important to demonstrate to an insurer that adequate fleet procedures are in place to minimise costly risks—including occupational fraud.

    For free Risk Management advice and assistance in mitigating your risk, call one of our Fleet Risk Management specialists on 01634 868444, or email us.