The average cost of motor insurance in the UK is �360 - of that you are paying �120 to a crook

James Pinder, solicitor

Now insurance firms throughout the UK are banding together to try to stop the fake claims that are costing the industry �3bn a year.

Investigating solicitor James Pinder estimates 30% of every motorist's car insurance goes into the fraudsters' pockets.

"The average cost of motor insurance in the UK is �360 - of that you are paying �120 to a crook," he said.

"The scale of this crime is increasing and so is the violence associated with it. Gangs force people to be so-called witnesses to fake crashes and if they don't comply they are beaten up."

'Astonished and confused'

Mr Pinder is currently investigating 2,000 suspicious motor insurance claims and says a large proportion are committed by crime syndicates.

One innocent motorist caught up in a fake claim was young mother Karen Hacking, from Accrington in Lancashire.

They were laughing when they took off their neck braces and threw them in the car boot

PC Damien Kitchen

She was driving home from work when she stopped at traffic lights.

The car in front moved off when the lights changed and as she also moved forward, the car in front slammed on the brakes. She shunted into his back bumper causing slight damage.

The driver and the passenger got out of the car staggering and clutching their necks. Both demanded that police and ambulance be called.

"I was astonished and confused. I had broken their car's back light and there was no damage to my car at all, yet they were behaving as if they had been hit by an 80mph bus," said Mrs Hacking.

Fake injury

When PC Damien Kitchen arrived on the scene, he was suspicious and kept watch on the suspects' car while they were in hospital.

"I saw the two of them return to the car wearing hospital neck braces," said PC Kitchen.

"They were laughing when they took off their neck braces and threw them in the car boot.

"There was absolutely no hint of a neck injury. It was a complete fake."

The two suspects eventually put in a claim on Mrs Hacking's insurance - for whiplash, false car hire, car storage, mechanics' fees and loss of earnings - in excess of �10,000.

Their claim was rejected.

Easy money

Car fraud investigator Peter Taylor explained that for �1,000 two drivable cars can be bought.

Police do not have the resources to investigate these crimes

James Pinder, solicitor

For an extra �800 one can have a �500 fully comprehensive insurance, the other a �300 third party cover.

The gang deliberately crash one car into the other, roping in fellow gang members to put their names on the claim saying they were the injured passengers.

They all claim �2,500 whiplash injury - an injury easy to fake - and �5,000 for the car write-offs, fake car hire and loss of earnings for all the passengers, said Mr Taylor.

"They eventually claimed �26,000 - not bad for a �1,800 investment," he said.

Convictions rare

Last month a gang of six were jailed for their part in a �150,000 car insurance fraud, and two years ago nine were jailed for a scam that amounted to �3m, but successful convictions are not common.

"Police do not have the resources to investigate these crimes. They are concerned with violent crime, robberies, burglaries the things that the public are most concerned about," said Mr Pinder.

"Little wonder it is becoming more attractive - use a shotgun for an �5,000 armed robbery and you are looking at a 10-year prison stretch."

Malcolm Tarling, of the Association of British Insurers, said insurance companies were now more willing then ever to share information to build up a data base of habitual and criminal claimants.

"I'm afraid it's big business," said Mr Tarling.

"But we are getting a lot better at spotting the phantom crashes."