Case Studies

Fake deaths and other frauds

by Mark Rowe

A husband faked his death in India so that his wife in the UK could collect £1.1m from life policies on his life. However, the death certificate was forged and the crematorium where he was said to have been cremated did not exist. He had flown back to the UK under an assumed name and was arrested shortly afterwards. He was sentenced to two and a half years in prison.

‘Canoe man’ John Darwin, who faked his own death by setting of at sea in a canoe, was arrested when he and his wife resurfaced in Panama. He stood to net over £500,000 in life insurance pay-outs.

A man faked his own death, his wife claiming he had suffered a fatal heart attack while travelling in South America. It was later discovered that he was alive and living in Australia. He was extradited to the UK where he was jailed.

These comes from the insurance sector trade body the ABI (Association of British Insurers), after another case of faked death to claim on insurance. John Katege, from London claimed his friend had died in a car accident in Uganda – but after investigations by the Insurance Fraud Enforcement Department (IFED) all the records were found to be false and the friend cannot be traced. Katege was sentenced at the Old Bailey to seven years in prison after attempting to defraud insurers. For the case details visit the City of London Police website. The IFED is funded by Association of British Insurers’ members, and based at the City of London Police’s Economic Crime Directorate.

Mark Allen, Manager, Fraud and Financial Crime, at the ABI, said: “This case reinforces the strong message that insurance fraud is a serious crime that can lead to a prison sentence. Faked death claims may not be as common as other types of insurance frauds, but when they occur the sums of money involved can be considerable. Whatever the type of insurance fraud, insurers will continue to crackdown on the cheats, who not only risk a custodial sentence, but will face problems in getting further cover and obtaining other financial products such as a mortgage.”

Meanwhile the Insurance Fraud Bureau (IFB) has hailed the public for giving information they have about insurance fraud to the IFB’s ‘Cheatline’. In 2014 over 500 reports were made to the Cheatline every month by members of the public; 6,347 reports in total for the year. The IFB attributes the number of reports and the quality of the information to increased public awareness of the issue combined with the realisation that insurance fraud is not a victimless crime.

Ben Fletcher, Director of the IFB, said: “The number of reports to the Cheatline shows that the public shares our contempt for insurance fraud while indicating that this crime is a nation-wide problem. The Cheatline is a tool which enables members of the public to turn frustration they feel towards insurance cheats into safe, positive action.”

The Cheatline, manned by the 0800 crime reporting line charity Crimestoppers, is a free telephone and online service which lets the public anonymously report what they know about any type of insurance fraud, in the UK.

Fletcher added: “Because people can report to the Cheatline anonymously then this provides us with a wealth of information that the police and insurers don’t always have access to. Every Cheatline report is scrutinised by the IFB and the information we receive from the public complements the wide array of data from the police, insurance industry, regulators and other agencies that we have unique access to. This then enables us to develop substantial evidence packages which are used to support police investigations to jail insurance fraudsters. The value of the Cheatline in helping to fight fraud shouldn’t be under-estimated as one in five of our IFB investigations, where we are working closely with a police force to investigate insurance fraud, have received important information from the public via the Cheatline. We can’t thank the public enough for their support.”

In 2014, reports to the Cheatline ranged from opportunistic fraud (59 per cent), for instance where an individual has exaggerated a claim, through to reports from the public who are alerting the IFB to organised insurance fraud (41pc of all reports). Information supplied to the Cheatline has contributed to a number of high-profile insurance fraud investigations which have resulted in the fraudsters receiving significant prison sentences. There is even an example of an insurance fraudster reporting themselves, the bureau adds.

The IFB which has concentrated on motor frauds such as ‘crash for cash’ and ‘ghost broker’ scams, is looking to start tackling cross-industry fraud.

Scott Clayton, Claims Fraud & Investigations Manager for Zurich and Chair of the IFB’s Products Workstream, said: “In the IFB, the industry has established a tried and tested model for identifying organised fraud within motor data. We know that the fraudsters targeting our motor books are not product loyal, so it’s absolutely essential we tighten our controls across other key product lines to ensure the fraud threat isn’t simply displaced. The IFB maintains a unique position in assessing cross-industry data – to find patterns and trends of activity that individual insurers could not identify. Results of the PoC will, for the first time, provide the industry with insight as to what ‘organised fraud’ looks like in other product lines.”

In November, the IFB will present a business case to the General Insurance Council.

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