Birmingham has been named as the UK’s ’cash for crash’ hotspot with the three highest-risk places in the country according to an insurer-funded body. Postcodes in the city took five of the top 10 places in a list of the 30 areas where fraud attempts were most commonly reported.

Trailing immediately behind Birmingham were Bradford, Manchester and Oldham. Other postcodes taking places in the top 30 were in Bolton, Blackburn, Liverpool, Enfield, Sheffield and Wakefield. Two postcodes in North London, N18 and N9, featured in the most common spots for cash for crash.

The data was published by the Insurance Fraud Bureau, which describes itself as a not-for-profit organisation working with the insurance industry to fight fraud and share intelligence.

The term ‘cash for crash’ is defined as where an individual or group stages an accident by deliberately damaging a vehicle, often with a sledge hammer or blunt object, or by inducing a collision on the road.

Groups have been found to have worked in different vehicles, flanking the ‘target’ vehicle with the front one braking suddenly to cause an accident.

The IFB says such scams cost the insurance industry £336m each year through false personal injury and credit hire claims.

The top 30 postcodes list is published to highlight risks are highest and to ensure police and insurers are alive to the threat of fraudulent claims.

Ben Fletcher, director of the IFB, said the scams cause a real danger to innocent road users, with at least one fatality occurring as a result.

He added: ‘These hotspots may be the worst affected areas for these types of scams, but crash for cash collisions can happen anywhere, so it’s imperative that road users are aware of them, exercise appropriate caution and if they believe they’ve been a victim, report it as soon as they can.’

The government has sought to clamp down on fraudulent or exaggerated claims through the Civil Liability Bill, which would introduce fixed damages for whiplash claims and be brought in alongside increasing the small claims limit to £5,000. Critics have suggested the reforms will push more cases into the hands of claims management companies and do little to reduce the volume of claims.