Motorists are paying an extra £40 a year on car insurance premiums as a result of fraudulent claims.
According to the Insurance Fraud Bureau (IFB), "crash-for-cash" scams are the most costly for honest policy holders with Bradford, Blackburn, Oldham and Liverpool the worst places for the activity.
The scam involves fraudsters driving to busy road junctions and then performing dangerous and unexpected emergency stops designed to cause innocent drivers to crash into them.
The member of the gang then makes a claim on the innocent driver's insurance covering car damage and often fictitious injuries.
Research shows that although the police and IFB are working together to tackle the problem, the scams are increasing in previously unaffected areas.
In the last two years crash-for-cash network sizes have reduced by 11%, but activity is now increasing in areas such as Liverpool, Halifax, and Ilford and Barking.
© Press Association 2009