Fraudsters using ‘Shallowfake’ Images in Car Insurance Scam

An insurance scam in which photos are doctored to show fake car crash damage is on the rise.

This is concerning for insurers and helping to push car insurance costs up to record levels.

Allianz said incidents where apps were used to distort real-life images, videos and documents increased by 300% between 2021-22 and 2022-23.

The insurer added that this had “all the signs of becoming the latest big scam to hit the insurance industry”.

Meanwhile, Zurich UK was also seeing more claims that had been edited using so-called “shallowfake” technology and that this was “becoming one of the most emerging threats from a counter-fraud point of view”.

Shallowfakes differ from deepfakes.

Deepfakes are fake media typically created using AI while shallowfakes can be created using conventional editing software on a phone and apps such as Photoshop.

Allianz said in one case, an individual had a photo of his van posted on his social media page as part of his business and ended up having a claim pursued in his name for an accident that never took place.

LV=, which is part of Allianz, received pictures of his vehicle from the fraudsters that seemingly featured a cracked front bumper, along with a fake repair invoice for more than £1,000.

The LV= fraud team investigated and found the photo was identical to the one on the social media page, except for the fact that the image had been edited.

Allianz said the rapidly changing nature of fraudulent activities “pose big risks to UK consumers”.

Scott Clayton, the head of claims fraud at Zurich UK, said shallowfakes were most prevalent in motor insurance in recent times.

He said fraudsters were using image editing software to add fake registration numbers to vehicles that had been written off.

He said: “We have seen an increase in people locating total loss vehicles on salvage agents’ websites and then implanting a registration number onto that car.

“There are then claims made for that vehicle, and a claims handler assessing this claim would take that at face value – that it is that actual vehicle.”

According to Zurich, claims that had been manipulated using deepfake technology were also on the rise.

Clayton said that in the past, criminals who intended to scam insurers with “crash-for-cash” claims needed to physically have vehicles crash into each other.

He added: “People can now create a fraudulent claim entirely from behind their computer and extract significant sums of money because these cars are total losses.”

Rising fraud levels have massively contributed to higher motor insurance premiums.

It emerged that the average price paid for comprehensive motor insurance in the UK was about 33% (£157) higher in the first quarter of this year than in the same period in 2023.