Small machines make up the bulk of thefts, between zero and five years old – with the average age being two years. This indicates smaller contractors and owner-operators, with only a few items of gear, are disproportionately being affected by this problem. Read on to find out more, or click here to download as a PDF.
Why Plant & Machinery Theft?
- Organised crime gangs are attracted to theft of heavy equipment because it consists of high-value products that can be sold relatively easily.
- Equipment theft is attractive and lucrative as there is no consistent national and industry-wide system of easy identification – so there is no need for sophisticated rebirthing.
- It is simply a matter of transporting the equipment interstate, perhaps giving it a new paint job and removing or covering over the owner’s identifying logos, after which it is easy to sell.
Types of Fraud
- Opportunistic fraud is the most common form of insurance fraud in Australia. It involves an insured exaggerating damages, injuries, or their inability to work to increase the payout of a claim.
- Premeditated fraud is coordinated and planned with the sole intention of defrauding an insurance company. Deliberate fraudsters target insurers to make money unlawfully, like staging a theft to receive a payout.
- Fraudulent non-disclosure can be either accidental or intentional. Fraudulent non- disclosure is the misrepresentation of facts included in your policy, like failure to disclose a criminal driving conviction or a previously declined insurance claim.
The Fraud Triangle
A framework for spotting high-risk fraud situations.
The Criminal Mind – Recidivist Fraud Offenders
- In most instances fraud perpetrators are going to take the easier target, this is why you need to protect your rental equipment in layers.
- You want the ‘would-be fraudster’ to go through multiple layers of screening before they get to your rental equipment.
- The more layers of screening the offender must go through will deter them from hiring the equipment, and they will generally move on to an easier target.
Mitigating Strategies Against Hirer Fraud
Ensure that all relevant equipment is registered with the state transport department.
Statistically this reduces the chance of theft by at least 50% in comparison to machines that are not road registered.
Ensure all equipment is registered on the PPSR system.
By owners registering equipment through the PPSR system, it makes it easier to track the item in the event attempts are made to on-sell the item through a reputable machinery dealer. The PPSR system provides valuable information to the whole industry. Successful recovery rates, both short term and long term, are predominantly higher if the equipment is registered on PPSR.
Add company branding (colours, insignias, logos) to the OEM colours of the machine.
It is much more desirable for a thief to steal a machine that looks identical or very similar to other OEM colours as it is harder to identify.
Fit two GPS units to each machine in different locations.
The first unit is an operating decoy unit, this unit must operate and give out a signal, however its primary purpose is to be located and detached by the thieves. The second unit needs to be a sleeper device, one that does not transmit a signal until it is activated. This unit is activated by the hire company once a theft has been identified and can assist with the machine being swiftly located.
The rental company needs to adopt robust hiring policy and procedures.
In this regard the following should be compulsory.
Hirer is a sole trader or individual:
- Production of a driver’s license.
- Credit card in same name.
- Hirers vehicle registration recorded.
- Hirers contact details obtained, including phone number, email address and street address.
- Hirers in-person attendance required for visual verification purposes.
Hirer is a company or business:
- Ensure a Creditor Watch check is performed on the business to identify if it the organisation is currently registered, cancelled, deregistered, or in administration.
- Ensure verification enquiries are undertaken with the business separate to the employee attempting to hirer the machine. These include:
- Conducting an online search of the business.
- Establishing contact particulars (independent to what the hirer provides) and contacting the business directly to confirm the business is wanting to hire the item and
- Confirm the enquiring employee has the authority to organise the hire.
- Ensure an account is setup with sign off from the company director, including a copy of the director’s photo ID.
- Be careful with businesses who hold credit accounts:
- Fraud operators come to learn which businesses have accounts with hire companies and have used this information to setup fake email accounts designed to fool the hire company. They then hire machines under the pretence they are an employee of the business account holder. Investigative enquiries later establish the email was fake and the offenders exploited soft hiring protocols in place for existing customer.
- Regardless of if the customer is a long-term account holder, the same hiring protocols listed above and below should be implemented on every hire.
Delivery or collection process:
- Verification of photo ID which visually corresponds to hirer.
- Verification of vehicle registration of the hirer.
- Photograph of hirer’s face and vehicle registration – fraud offenders do not like photographs being taken of them. They realise this becomes problematic for them when presented to law enforcement who will be able to identify who they are.
- Do not deliver to a worksite which is vacant when the hirer is not physically present to take possession.
- Do not under any circumstances leave equipment at a delivery location unless the hirer is present (not a representative of the hirer, this is not good enough, needs to be the hirer). Ensure photos are obtained of the hirer along with vehicle registration.
- We recommend all delivery trucks have dashcam footage active during delivery, or the delivery driver has a body worn camera active. This will capture all interactions with the hirer and can be presented to police should the hirer and machine disappear.
- Check GPS locations of machines daily.
- Stay in communication with hirer’s regularly to check on the machines function. If the hirer fails to respond to communication immediately send a staff member to check on last known GPS location.
If delivery and collection providers are not employees of the rental company, ensure appropriate screening is undertaken on the business they contract for and make sure they are reputable business. We note there are instances of tilt tray operators being heavily involved with fraudsters and criminal organisations who steal machinery. Ultimately, the machines need to be moved and tilt tray operators have to be involved in this process, either knowingly or unknowingly.
Any questions, please speak to your insurance broker or contact us.
Content originally provided by Adjuster Corp.