With incidents of fraudulent hire on the increase, JCB Insurance examines how plant hire companies can protect themselves against increasingly sophisticated criminal practices
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. One of the things these criminals are up to is cloning legitimate, established companies.
Plant hirers have long been targets of fraud in the form of fraudulent hirers but this problem has recently reached unprecedented levels.
In our experience, as specialist insurance brokers to the plant hire and construction industry, we have witnessed vastly 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 victim.
Organised International Crime Gangs
We have become aware of large, sophisticated, organised crime gangs, often from Eastern Europe engaged in plant theft. They have identified this as a ‘business opportunity’.
Hoping to exploit potential weaknesses in plant hire firms’ hiring procedures, the criminals are becoming harder to detect because they often supply information that is actually a cloned company and therefore looks completely legitimate.
Real Life Example
The police are currently investigating a foreign gang that hired a number of machines from different hirers using seemingly legitimate and correct company information that they had cloned. The details checked out completely when a credit check was carried out, the individual provided photo ID and copies of utility bills that matched the address on the ID and all looked fine. So, an account was opened and the kit was hired out. But, it was never returned and has not been recovered.
Ask Yourself some Questions
These instances are sometimes very 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 you?
- 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 to these questions, make further checks – ask for references but… make sure the referees are genuine too not just part of the wider criminal network.
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 to make sure. Here at JCB Insurance we regularly check potential hirers’ insurance for our plant hire clients.
- Does the address he’s given match 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.
If any one of these questions or checks does not come up to standard, consider refusing the hire. It is better to lose a hire than lose a machine that you’ll have to claim on your Insurance for.
On the point of Insurance we would raise two specific points. Firstly, in the event of you falling victim to this type of crime, even if the thief has presented a genuine hired-in plant insurance policy, you will not be able to claim it. 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 is aware of insurance policies that either exclude theft by deception entirely or have very strict policy conditions that if not complied with 100 per cent, will mean that you might not get your claim paid. Also, 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 fraud claims.
If 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.