Brightside’s online motor insurer eCar has hit upon a novel way to protect itself against fraud while netting some welcome money-for-nothing type income, according to an investigation by BBC Radio 5 Live.

After one listener was accused of not submitting documents she claimed she had, then denied cover and charged £75 for the privilege, a 5 Live investigation uncovered the fact – previously flagged by Brightside founder Arron Banks in a March 2010 interview with Post Magazine – that the firm routinely throws out one in four applications – whilst pocketing a cancellation fee of £75.

Approached for comment by 5 Live, BIBA’s Graeme Trudgill opined that 25% was an unusually high proportion of applications to be rejecting. If, however, as Mr Banks claimed in the same interview with Post, 40% of applicants lie, then perhaps it’s the rest of the industry that has got it wrong.

According to 5 Live, 25-year-old Ashley Bennett of Tunbridge Wells was offered a market-beating price by eCar for insuring her Fiat Punto but then got into a lengthy debate with them over their alleged non-receipt of documents she claimed she’d sent, before ultimately being rejected on the grounds of not having supplied the required documentation.

eCar claim they have to stickle over getting full documentation in the post within a strict time limit to guard against fraud. But Trudgill said it was “disappointing that so many customers are having their applications cancelled,” while James Daley of Which Motoring claimed that “These days most insurance companies share information via databases and they can also share information with the DVLA so there shouldn’t be any need for anybody to send driving licences in the post.”

Either way, it seems eCar’s hardline policy on fraud – which is claims enables it to offer the most competitive deals to the 60% of drivers who are not liars – appears to have the added benefit of netting quite a few £75s. Ms Bennet eventually got hers back. But eCar’s Arron Banks told 5 Live: “My only regret is that against our normal procedure, and in an attempt to pacify the customer, we issued Miss Bennett with a refund of the cancellation fee.

“It remains our policy,” he insisted, “to penalise those who cheat, so that we can reward those who don’t.”

Whoever claimed tough love wins you friends.

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