CPA Bulletin

Fraudulent Hire and Theft by Deception Insurance: 1 Cyber Crime We hear a lot these days about the rapid increase in cyber crime and how criminals are committing fraud by hacking into computer systems, stealing data and other illegal activity. Indeed, late last year the entire focus of the CITS (Combined Industries Theft Solutions) Conference was on fraud, how exposed we are and how we need to bemore diligent in our efforts to prevent falling victim. Fraudulent Hirers Plant Hirers however have been targets of increased levels of fraud for almost the last 10 years in the form of Fraudulent Hirers. In our experience as Specialist Insurance Brokers to the Plant Hire and Construction industry we have started to see increased activity recently from fraudsters looking to ‘hire’ plant and equipment with a view to stealing it. The worrying thing is, the criminals seem to be getting more organised and harder to detect. This means you need to be even more alert to this threat and take steps to ensure you are not their next prey. Organised International Crime Gangs We have become aware of large, sophisticated and ruthless organised crime gangs moving into Plant Theft as they have identified this as a ‘business opportunity’ for them. Having identified potential weaknesses in Plant Hire firms’ hiring procedures the gangs are using vulnerable people in society, over whom they have a hold of some sort, to front the hire using what is to all intents and purposes is genuine ID. The CPA and Plant Hire community are playing a part in protecting us all in this by sharing information as and when it occurs but the frauds are sometimes difficult to detect unless you and your hire desk teams are highly alert to this threat. Recent Thefts A recent example involved a drug addict who was being supplied by another arm of the criminal gang who was threatened with serious physical injury if he did not comply with their instructions. He was forced to buy hired in plant Insurance and armed with the documentation and his ID, was driven to a string of Plant Hirers whereupon he was able to hire machines and have them delivered to locations that he had been given by the gang. In another case a man had borrowed money from a ‘Loan Shark’ who had apparently sold the debt to a large and dangerous gang that was involved in large scale international crime including human trafficking. The gang apparently threatened the man and his family with death if he did not comply with their demands. He was again forced to buy hired in plant insurance and then to hire various items of plant and equipment from a number of hirers and have it delivered accordingly. In both of these cases, the fraudsters were successful in the majority of their attempts to hire equipment. Question As mentioned earlier, some of these instances are difficult to detect so what can you do to protect yourself? Our first piece of advice would be to question a number of things : • Why is he coming to us? • What is his background? • Does the reason he needs the kit ‘feel’ right? • Does the delivery address ‘feel’ right eg is it a contracting site? If you’re not happy with any of the answers you get from these questions, make further checks – ask for references but make sure the referees are genuine too not just part of the wider criminal network. Double Check Ensure that hire desk staff double check the details – • Is his ID correct? Make sure you’ve got the original drivers’ licence or passport in your hand, not a photocopy that could have been altered • Is the evidence of Hired In Plant Insurance genuine? If you’re not sure, make sure you follow up and check. Your Insurance Broker should be willing to call the Insurance provider tomake sure Here at JCB Insurance Services we regularly check potential hirers’ insurance for our Plant Hire clients. • Does the address he’s givenmatch the address on his ID and any utility bills he’s provided? • Does the name of the credit card he uses, match his name - it’s easy these day not to even check the name on the card. We would strongly advise that if any one of these questions or checks does not come up to standard, refuse the hire. It is better to lose a hire than lose a machine that you will have to claim on your Insurance for. Insurance On the point of Insurance we would raise 2 specific points: Firstly in the event of you falling victim to this type of crime, even if the thief has presented what looks like, or indeed actually is, genuine hired in plant insurance, you as the Plant Hirer will not be able to claim on that policy. The policy would be in the name of the man who turns out to have stolen your machine, not yours. This matters because you would not be party to the insurance contract and would therefore not be able to make a claim under it. Secondly, JCB Insurance Services Ltd are aware of Insurance policies that either exclude theft by deception entirely or have very strict policy conditions that if not complied with 100%, will mean that you won’t get your claim paid. In many instances, plant insurance policies have a ‘reasonable precautions’ clause that some insurers are starting to examine closely to determine if they can avoid paying claims. If, in the event of a loss, they find that you have not taken the steps details above regarding checking ID correctly, checking credit card details and all the other things mentioned, they may not pay out. Make sure you are not a victim of fraudulent hire and remember Question, Double Check and if necessary, Refuse. JCB Insurance Services Ltd is a Specialist Insurance Broker providing risk management advice and arranging all types of Insurance for the Construction and Plant Hire industries. 0800 141 2877 • www.jcbinsurance.com 16 CPA Bulletin > February 2018 www.cpa.uk.net