An International Fraud Scheme: How Fraudsters Exploit Cross-Border Insurance Claims

Imagine being involved in a car accident with a foreign vehicle while driving in your country. Let’s say a foreign car collides with your vehicle in your country, and you, as the victim, seek indemnification. What steps should you take? And more importantly, how can fraudsters manipulate this process to their advantage?

Claiming Compensation for a Foreign Vehicle Accident

The Green Card System governs cross-border insurance claims in 46 countries, ensuring that victims of accidents involving foreign vehicles can seek compensation. In Europe, claimants must contact the National Insurance Bureau within the timeframe established by agreements between the involved countries.

Upon receiving the claim, the National Insurance Bureau typically has up to six weeks to coordinate with the Other Country National Insurance Bureau to verify the vehicle involved. If no record of the vehicle is found, the National Insurance Bureau informs the claimant, advising them to double-check the plate number or escalate the claim to the Guarantee Fund for Road Accident Victims.

What is Guarantee Fund for Road Accident Victims?

The Guarantee Fund for Road Accident Victims is a public fund financed by Third-Party Liability Insurance, designed to protect victims when the liable party is either untraceable or insolvent. Claimants must submit an indemnification request to Guarantee Fund for Road Accident Victims within 180 days from the accident, providing necessary documents, including the accident report and National Insurance Bureau’s official response.

How Fraudsters Exploit the System

Fraudsters, such as our hypothetical Mr. X, manipulate this insurance framework to file false claims and illegally collect payouts. Here’s how the scam works:

• Fraudsters acquire pictures of wrecked cars from scrapyards, auto repair shops, or online sources.

• They search marketplaces for used cars similar to the damaged ones they have photos of.

• Using Photoshop or similar software, they alter a portion of the image to display a legitimate plate, such as "FXXXXXB" (where "X" represents blurred GDPR-compliant data).

• The fraudster fabricates a foreign vehicle's involvement, inserting an invented foreign license plate number.

• Mr. X, posing as a lawyer representing the car seller (whose name was found in the marketplace listing), submits a fraudulent claim to National Insurance Bureau.
• He uses different names and email addresses for each claim.

• Since the foreign plate number is fake, National Insurance Bureau fails to identify the foreign vehicle and advises Mr. X to escalate the claim to Guarantee Fund for Road Accident Victims 

• Mr. X forwards the claim to the regionally competent insurance company, copying Guarantee Fund for Road Accident Victims and attaching National Insurance Bureau’s official response
• He includes an IBAN for the indemnification, and the fraud is complete.

How Legentic Prevents This Fraud

Fortunately, for our customers, this is not the end of the story. Thanks to Legentic’s powerful fraud detection tools, insurance companies and investigators can now verify suspicious claims, detect manipulated images, and identify fraudulent claimants before payouts are made.

Final Thoughts

If you’ve ever been involved in an accident with a foreign vehicle, be aware that fraudsters might exploit the same process for illicit gains. Protect yourself and your company with the right tool Legentic is here to help.

Stay tuned as we continue our pursuit of Mr. X and uncover more about international fraud schemes!