Insurance provider Hastings Direct and HF successfully exposed a company’s fraudulent activity worth tens of thousands, after a number of completely fictitious credit hire charges were identified across the insurance industry.

District Judge Jordan found that the director of dissolved company NKR Motors Claims Ltd (NKR), Mr Nagarasa Ramanan, was at the heart of what DJ Jordan described as an “unsophisticated but sustained fraud”.

The scam saw Ramanan presenting claims for credit hire charges to multiple insurers for the hire of the same vehicles already claimed to be out on hire in other claims. On some occasions the same hire car was said to be hired out in as many as four different claims to unconnected parties. Aiming to stop the fraud and send a robust message to Ramanan and other would-be fraudsters, Hastings Direct and HF began recovery proceedings in the Tort of Deceit.

Evidence was obtained from a party from whom NKR had recovered payments for credit hire and vehicle damage. Whilst that party confirmed they had instructed NKR to deal with their vehicle damage claim, they categorically denied being provided with a replacement vehicle. Furthermore, it was revealed that NKR had retained a considerable amount of the vehicle damage payment intended for the party themselves.

Hastings Direct issued two sets of proceedings that included NKR and Mr Nagarasa Ramanan as defendants, seeking recoveries of hire payments along with interest, exemplary damages and legal costs.

Despite entering defences denying dishonesty and claiming the issue to have arisen from “administrative errors”, no evidence was provided by the defendants to support their defence. After back-to-back trials in the Uxbridge County Court, District Judge Jordan was satisfied that the defendants had knowingly made fraudulent claims, and he commented repeatedly that it was right that the cases be pursued against the director as well as the company.

Having found fraud, the judge awarded damages and costs including repayment of the £10,250 paid to the defendants for the original credit hire claims, exemplary damages, interest and costs. In total the defendants have been ordered to pay Hastings Direct £82,243.96.

When awarding damages and costs the judge commented that it was clear that Ramanan was behind the fraud as the “decision maker” and it was right and proper for the recovery to be pursued against him personally. He described the fraud as unsophisticated but sustained and stated that the administrative error defence was nothing more than a cover up attempt.

Morgan Davies, Partner said; “It’s reassuring to see the judge’s conclusion that a dishonest director should not be able to hide behind a company when committing such blatant acts of fraud. This decision should send a strong message to rogue actors thinking they can commit fraud under the disguise and protection of a limited company.”

Luke Warner, Head of Claims Fraud at Hastings Direct said; “Fraudsters may wrongly believe they can hide behind company names to make dishonest claims without consequence. This case demonstrates that Hastings Direct is committed to tackling fraud on behalf of its customers, whether that be from individual fraudsters, criminal gangs or dishonest companies.”

Credit Hire