More credit hire nonsense

[Clitheroekid]

I've just been reading the latest report of a claim in which the claimant was found to have committed fraud and ordered to pay £30k in legal costs (not that I expect him to pay a penny, that being the nature of fraudulent claimants).

In itself, it's just an everyday occurrence these days, but what caught my eye was that he'd been riding a moped when he had the accident, and he had apparently been provided with a replacement through the infamous credit hire system.

The replacement appears to have been hired from the date of the accident in February 2022 to May 2023.

So how much would you think a moped would cost to hire, even for 15 months? Maybe £50 a week? That would seem about right, looking at this website, the first that Google came up with - https://scoots-hire.com/prices/

So that would mean a bill of around £3,250 for 15 months. As a brand new one only costs £2,850 one might consider such a hire charge somewhat excessive, but I couldn't believe the actual hire bill, which was ...


(wait for it!) ...


£121,759!! That works out at well over £8,000 a month, or the equivalent of 43 brand new mopeds

https://www.lexology.com/library/detail ... &utm_term=

It seems to me that the fraud committed by the claimant pales into insignificance compared to that committed (or, happily, in this case attempted) by the credit hire company. Hire companies that attempt to screw insurers for hire bills like this should be forced into compulsory liquidation on public interest grounds.

[UncleEbenezer]

It seems to me that the fraud committed by the claimant pales into insignificance compared to that committed (or, happily, in this case attempted) by the credit hire company. Hire companies that attempt to screw insurers for hire bills like this should be forced into compulsory liquidation on public interest grounds.

Surely an insurer is not a weak and vulnerable person who needs nanny's protection? What stops an insurer insisting that the terms and duration of any credit hire invoked under its policy are fair and reasonable?

[didds]

Surely an insurer is not a weak and vulnerable person who needs nanny's protection? What stops an insurer insisting that the terms and duration of any credit hire invoked under its policy are fair and reasonable?

my cynical view based on no evidence is that they don't care as all they do is bump everybody's premiums up across the board to cover the costs fo such daft arrangements.

[UncleEbenezer]

Surely an insurer is not a weak and vulnerable person who needs nanny's protection? What stops an insurer insisting that the terms and duration of any credit hire invoked under its policy are fair and reasonable?

my cynical view based on no evidence is that they don't care as all they do is bump everybody's premiums up across the board to cover the costs fo such daft arrangements.

But insurance is a competitive market. If you bump up premia, you become less competitive.

[88V8]

Surely an insurer is not a weak and vulnerable person who needs nanny's protection? What stops an insurer insisting that the terms and duration of any credit hire invoked under its policy are fair and reasonable?

my cynical view based on no evidence is that they don't care as all they do is bump everybody's premiums up across the board to cover the costs fo such daft arrangements.

My experience of working in inusrance, and in particular my commercial claims experience, tells me that insurers are more than ready to chisel away at the quantum of claims... they call it 'savings' ... so I would have thought they'd be all over this. Although in my day, hire wasn't a thing.

V8

[didds]

my cynical view based on no evidence is that they don't care as all they do is bump everybody's premiums up across the board to cover the costs fo such daft arrangements.

But insurance is a competitive market. If you bump up premia, you become less competitive.

Not if all companies do it

[Tedx]

But insurance is a competitive market. If you bump up premia, you become less competitive.

Not if all companies do it

Are you suggesting.....a cartel?

Whodathunk insurance companes would do that?

[didds]

Not if all companies do it

Are you suggesting.....a cartel?

Whodathunk insurance companes would do that?

well hush my mouth

[anteos]

Thanks for posting this. So who wil end up paying the 121k?

[dionaeamuscipula]

Thanks for posting this. So who wil end up paying the 121k?

Essentially, everyone with a vehicle to insure.

DM

[Lootman]

Thanks for posting this. So who wil end up paying the 121k?

Essentially, everyone with a vehicle to insure.

More accurately, any policyholder who never makes claims.

[dealtn]

Essentially, everyone with a vehicle to insure.

More accurately, any policyholder who never makes claims.

No. Whether you make a claim or not you are still paying for this.

[staffordian]

One thing which puzzles me having read the linked article.

As the fraudulent claim was rejected, who pays for the hire of the gold plated moped?

I'd assume the moped rider would be, but it says he was 'only' £30k out of pocket; which was his legal costs.

[Lootman]

More accurately, any policyholder who never makes claims.

No. Whether you make a claim or not you are still paying for this.

I still pay but the net cost to me is the amount of premium I pay minus the amount of claims paid out to me.

[UncleEbenezer]

BTW, as a separate matter to the moped rider's idiocy, I hope the BMW driver was duly charged with driving without due care and attention? While unlikely to be fatal, hitting a stationary object at low speed can be quite serious.

[Clitheroekid]

Thanks for posting this. So who wil end up paying the 121k?

In this case, nobody, as the claimant abandoned his claim, no doubt as a result of the fraud being discovered. However, in the 99% of cases that are settled it's the insurers who pay - and then, of course, recoup the expenditure from the rest of us through higher premiums.

This so called credit hire sounds - and is - OK in principle. If your car is off the road being repaired through another driver's careless driving then it's entirely reasonable that you should be provided with a replacement car at no expense. If the CHO's (Credit Hire Operators) simply hired cars at market rates nobody would have an issue with them.

However, the real scam lies in exploiting a loophole in the law where an `impecunious' driver is concerned, i.e. someone who can prove that they couldn't afford to hire a replacement. For reasons that are very unclear this opens the door to hire firms to charge completely exorbitant rates, such as the rate quoted in this case.

Many parasitical CHO's have jumped on this lucrative bandwagon, and one of them. the loathsome Anexo, is even quoted on the Stock Exchange - https://www.anexo-group.com/content/inv ... nformation

They work on the basis that they will supply a replacement vehicle to the impecunious claimant and then claim the hire charges back from the unfortunate insurers.

In theory, in order for it to be a valid contract, the claimant is liable to pay any shortfall in the charges that are recovered, but in practice they are rarely pursued, not because the CHO are nice people, but because, by definition, the claimant has no money, so it'd be a waste of time. (I was the exception, and got sued for around £24k, but that's another story!)

In view of all the efforts that the government has made to reduce the scam of claims for non-existent whiplash injuries I find it incredible that they haven't outlawed this practice, which is nothing but legalised extortion. So next time you rub your eyes in disbelief when presented with your latest car insurance quotation perhaps you might be incentivised to contact your MP!

[didds]

so, for those of us with sufficient finances, what is the incentive if our vehicle is off the road through another's "fault" to ignore our own insurers' suggestions as to a credit hire cover, and instead hire a car elsewhere ourselves and claim back via insurance? I can see the hassle factor and the cash flow issue would be the main deciding points?

[9873210]

However, the real scam lies in exploiting a loophole in the law where an `impecunious' driver is concerned, i.e. someone who can prove that they couldn't afford to hire a replacement. For reasons that are very unclear this opens the door to hire firms to charge completely exorbitant rates, such as the rate quoted in this case.

IMHO that's not the real scam. The real scam is closer to:

In view of all the efforts that the government has made to reduce the scam of claims for non-existent whiplash injuries I find it incredible that they haven't outlawed this practice, which is nothing but legalised extortion. So next time you rub your eyes in disbelief when presented with your latest car insurance quotation perhaps you might be incentivised to contact your MP!

People who enact, enforce and refuse to change a defective legal framework are far more culpable than people who simply obey the law.