Plant hirers: Be alert on new trends in fraud

Posted: 03 December 2018
The risk of construction plant theft by fraudulent hirers has been present for some time and shows no sign of disappearing.
Allianz has recently seen some new trends in deception and would like to bring to your attention what is happening and what you can do. Standard security and identity checks are proving less effective and criminals are becoming ever more organised and technologically advanced in outwitting you to get their hands on your plant.

As the police, plant owners, insurance industry, manufacturers and security companies work continually to make plant theft more difficult, thieves are moving towards targeting hire companies to fraudulently acquire plant.

Some recent criminal activity includes:

  • obtaining and cloning details of a genuine company; sometimes an existing customer of yours. Your credit checks are therefore performed on the genuine company which are returned as satisfactory.
  • setting up a new account with you but then not making any payments, or making a couple of initial payments to appear honest before absconding with plant.
  • providing falsified ‘evidence’ of insurance or employment.
  • using pre-loaded credit cards or paying in cash.
  • hiring a large quantity of high-value mobile plant at once.
  • changing the address of delivery whilst en route.

A common mistake is to think that insurers are the only ones affected by claims, but in reality, the impact often comes back to the policyholders.

It's important to know that theft affects:

  • You (the plant hire business)
    Equipment values can exceed £100,000 which may have a catastrophic impact on your business if lost. Even if your assets are insured, there are often other implicating costs which may not be recovered from conventional insurance. If you have vital or important plant which isn’t easily replaced, you may have the additional expense of hiring in equipment, or you may lose customers who require specific plant which is no longer available.
  • Your customers
    If their data/details are stolen, or if they hear of other customers of yours having their details stolen, they may choose to hire elsewhere.
  • Manufacturers
    Many reputable manufacturers are working to improve security and to integrate new technology for combatting theft. These additional costs could make their plant more expensive to purchase.
  • Police/Plant & Agricultural National Intelligence Unit (PANIU)
    The police (and their specialist unit PANIU which assists in the identification and recovery of stolen plant) are stretched. Theft has been on the rise since early 2016[1] which is a further strain on resources. Due to cuts, the Metropolitan police’s deputy commissioner has warned "we may have to scale back our response, […] concentrate on the biggest emergencies and "look again at some of our specialisms" in future[2].
  • Hire industry
    Hire associations and forums have implemented best practice for their members to preserve industry integrity.
Recently Allianz has seen a dramatic increase in claims where plant has been stolen by fraudulent hirers. Some claims have involved more than one item of high-value equipment stolen at one time, which have had a significant impact on the overall 'pool' of plant insurance premiums.
We are closely reviewing our plant theft claims to document loss reasons and keep track of any newly-developing trends to help our policyholders safeguard themselves and 'stay ahead' of the criminals.
We have reviewed the enquiries we ask at quotation stage and you may have to answer more questions regarding your current business requirements and procedures.
We have added an extra layer of protection to our Policy Wordings and you will see our Bona Fide Hire Condition which details steps to verify the identity and authenticity of the hirer in order for a claim to be paid.
We are actively engaging with all stakeholders including PANIU, and insurance and plant hire industry bodies, to formulate the most effective way forward. As this evolves, we will share our findings and solutions through knowledge share and education to help you better protect yourself from becoming a victim.

You are the first line of defence in preventing a fraudulent hire.

The additional steps below could help:

Be wary of urgent hires
Scrutinise if plant performs different jobs or is unusual for their trade
Obtain a copy of the official purchase order
Ask for a landline phone number[4]
Restrict credit/value limits or insist on payments upfront
Compare the name on the credit card with their ID and check for the use of pre-loaded cards
Be vigilant about delivery sites; drive past again if you have any suspicions[4]
Explain to your customers that your procedures are there to protect against fraud, for the benefit of everyone
Carry out more robust ID/credit checks:
Check IDs carefully for counterfeits and compare vehicle details against the DVLA database[3]
Compare details with Companies House and the company’s official website (e.g. .com domain vs. email address)
Contact a representative of your existing business customer to ensure the hire is genuine
Create a frequently-changing password to hire and/or collect
Ask for two satisfactory trade references[3]
Your observable prowess could deter the dishonest.
  • Protect your equipment using integrated trackers that cannot be easily removed or shut off – CESAR scheme or Thatcham Certification. Statistics from PANIU show that CESAR registered plant has a 21% recovery rate[5].
  • Retain original purchase invoices, and provide serial numbers to the police when reporting a crime. Getting serial numbers on the Police National Computer will greatly assist in recovery.
  • Report the loss to your broker urgently so they can initiate the claims procedures. Be sure to include important details such as:
  •  original purchase invoice, serial number, make, model and year of manufacture
  • police crime reference number and force reported to
  • evidence of all checks performed on the hirer.
  • Action Fraud is the national reporting centre where you can report if you have been a victim of fraud, attempted fraud or cybercrime (your insurer cannot do this for you).

This guidance is to help reduce the likelihood of you becoming a victim of this type of crime; however, you will need to ensure you meet all the requirements of your insurance policy.

If you have any questions regarding your current insurance cover, please speak to your broker about your options.