Cross-border fraud represents a major challenge for insurers, investigators and judicial authorities in Europe. To shed light on these issues, Finovox brought together several French and Belgian experts last week for a morning of exchanges dedicated to international fraud mechanisms and legal obstacles. Among them, we had the pleasure of finding Emeric Desonix, a recognized French lawyer in insurance law, Mathieu Vaessen, a Belgian lawyer expert in cross-border fraud and European legal issues, and Benoît Leclerc, managing director of GIE Argos and a key player in the fight against vehicle theft in France.
Listen to Emeric Desonix share his expertise on insurance fraud on our Fraud Hunters podcast!
Interview with Emeric Desonix, lawyer and national anti-fraud specialist
Car fraud: a privileged field of action for cross-border networks
Car fraud remains one of the most active areas for organized crime. In France, around 140,000 stolen vehicles are recorded each year, a volume that complicates investigations and overburdens insurers.
According to Benoît Leclerc (GIE Argos), the closure of car registration services in favor of registration via garages has created new loopholes. It makes it more difficult to detect registration fraud.
Mathieu Vaessen recalls that:
“Certain local particularities, such as the obligation in Belgium to leave the registration certificate in the vehicle, further facilitate certain fraudulent practices.”
We take stock of the most frequently observed cross-border car fraud patterns.
The “ghost vehicle” fraud
The phantom vehicle is one of the most common car fraud techniques. The principle?
The fraudster invents an identity or buys foreign documents, usually in countries with lighter controls, in order to pass off as real a completely fictional vehicle. The individual then declares his imaginary vehicle, stolen, to an insurer.
This scheme is based on the difficulty in verifying the authenticity of foreign documents, and exploits cross-border flaws between European countries. This fraud weighs heavily on insurers, who must mobilize lengthy investigations to prove that the vehicle never existed.
Leasing fraud
Leasing fraud has grown strongly with the growth in rental financing. It comes in two main forms:
- Illegal export of the vehicle outside the European Union using false export documents
- Identity theft to illegally transfer the ownership of the vehicle and then sell it quickly.
With this type of fraud, vehicles disappear at the speed of light in foreign countries. It then becomes almost impossible for renters and insurers to recover them.
Uncorrelated exporting and false theft claims
This fraud pattern is essentially based on the lack of coordination and communication between states. License files are not interconnected at the international level, creating loopholes that the most ingenious fraudsters easily exploit. The process is simple and effective:
1- The vehicle is exported to a foreign country, sometimes legally, sometimes with false documents.
2- Once out of the territory, no control system makes it possible to verify its real presence.
3- The owner then declares the vehicle stolen in France, even though it circulates perfectly elsewhere.
This cross-border car fraud is a perfect example of how criminals exploit administrative grey areas between member countries.
Different laws depending on the country: a real strategic challenge
European free movement facilitates trade and travel for all, but it also imposes new challenges in the fight against fraud. Indeed, fraudsters take advantage of this increased mobility, while the mechanisms for cooperation between authorities are still very national and sometimes slower to align.
Depending on where the case is brought, rights, deadlines and even acceptable evidence may vary, as Emeric Desonix and Mathieu Vaessen point out when comparing Belgium and France.
The action for the reclamation of property
In France and the Netherlands, the law strongly protects the bona fide owner, i.e. the buyer who is unaware that the vehicle has been stolen. Even if the insurer or the legitimate owner finds the car, they can have a lot of trouble getting it back!
Conversely, Belgium has abolished this protection. A stolen vehicle can be returned to its real owner much more easily, even if the final purchaser thought they had acquired it legally.
This facility naturally influences the choice of country in which to act.
The guarantee of hidden defects
The deadlines for taking action are strict and clearly defined in France and the Netherlands.
On the contrary, in Belgium, the rules are more vague, which creates areas of uncertainty. Sometimes exploited by fraudsters to save time or evade action.
Want to know more? Do not hesitate to read our article on The policy to combat insurance fraud in Belgium !
Admissibility of evidence
In France, the rules concerning so-called “unfair” evidence have recently been relaxed. The interest? Now allow, in some cases, to use items collected outside of strict procedures.
In Belgium, this flexibility has existed for over twenty years. Irregular evidence may be admitted as long as it helps to uncover the truth. This regulation thus offers more scope for cross-border investigations.
Continue reading, How to report insurance fraud in Belgium ?
Legal cooperation: a strategic lever against cross-border fraud
Cross-border fraud now requires effective coordination between countries.
A concrete example: vehicle stolen between France and Belgium
A few months before this round table, a vehicle declared stolen in France was found in Belgium. Thanks to the rapid mobilization of a network of specialized lawyers, an urgent request made it possible to immobilize the vehicle and launch civil proceedings before it disappeared again.
As Mathieu Vaessen summarizes:
Letters rogatory are useful but too slow. It is by combining official procedures and a network of lawyers that we can act quickly and recover information that the authorities do not have.”
The role of insurers in the professionalization of fraud
Car fraud networks are increasingly organized and international,” underlines Benoît Leclerc.
Insurers must therefore compile extremely comprehensive files to convince magistrates and authorities to prosecute fraudsters.
Emeric Desonix adds that the European situation differs from that of the Anglo-Saxon countries. In the United Kingdom and the United States, organizations such as the Insurance Fraud Bureau Or the National Insurance Crime Bureau, financed by insurers, centralize information on fraud.
They thus allow a rapid detection And a effective pursuit fraudsters, which greatly facilitates the work of insurance companies and authorities.
We also moderated a round table on international fraud. To discover its content, read our article the fight against fraud: an international challenge!
An international network of anti-fraud lawyers
To strengthen this cooperation, Emeric Desonix announced the creation of an international network of anti-fraud lawyers already covering 25 countries, with the aim of extending this coverage to all European jurisdictions. This network has several objectives:
- Provide local strategic and procedural advice
- Enabling insurers to manage complex cross-border cases
- Accelerate actions and optimize the chances of recovering stolen goods
This roundtable confirmed that the fight against cross-border fraud starts with communication and information sharing. Insurers and lawyers need to combine legal expertise, collaborative networks, and surveillance tools to stay one step ahead of criminals.
To support this approach, Finovox offers documentary verification software. It allows businesses and insurers to secure their national and international transactions and to quickly detect fraud.
Find out how Finovox can help you strengthen your procedures!
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