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Case Studies

Fraudster profile

The most common insurance fraudster is aged 31 to 50, has never before made a false claim and is most likely to be claiming for £500 or less after accidental damage to a computer, television or mobile phone.

That’s according to profiling by Prof Mark Button, pictured, and colleagues at the
University of Portsmouth. They compiled the profile, using data from almost 40,000 claims handled by insurance fraud claims investigators VFM Services. Prof Button said the relatively low value of the claims reinforces studies which show people are more likely to commit insurance fraud if they feel they aren’t asking for enormous amounts and who see such crimes as only a “little dishonest”.

He said: “People who try to commit insurance fraud are highly likely to think a little crime won’t hurt anyone, and are therefore opportunists rather than being serious professional criminals. Research on dishonesty suggests many people are prepared to be a little dishonest in life and a bogus household insurance claim may well be that perceived as a little dishonesty which mostly honest people allow themselves to engage in.”

The profile suggests that men and women were equally likely to attempt to defraud their insurance company. Claims for computers, mobile phones, jewellery and carpets peak in early autumn, which researchers say coincides with people having time to fabricate a claim, or whose return from an expensive holiday has given them a motive to invent or exaggerate a claim to help pay bills.

The fact 82 per cent of fraudsters claim for accidental damage is likely to avoid having to obtain a police report, which would be required if the item had been stolen but which also involves committing another crime of wasting police time or perverting the course of justice. Examples of claims which were withdrawn after a ‘conversation management process’ with an investigator from VFM , included a man who said his flat-screen television had fallen off the wall and glass from the screen had been scattered all over the floor. He withdrew his claim after it was pointed out that his make of television did not have a glass screen.

A woman who said a seagull had taken an expensive watch from her enclosed back garden eventually admitted she hadn’t seen a seagull and couldn’t say why she hadn’t reported the theft to the police. She rang VFM the next day to say she had found the watch.

Such discussions with claimants rely heavily on claims assessors spotting inconsistencies and this new psychological profile will be used with other methods of assessment to help identify fraudulent claims.

Research from the Association of British Insurers (ABI) has shown more than two-thirds of people either wouldn’t rule out or would think it was acceptable to make a false claim or exaggerate the damage or cost of an item that is lost or stolen.

But the combined cost of committing small insurance claim frauds of, say, £500 per item is cumulatively costing insurance firms billions of pounds a year.

Sally Griffiths, Director at VFM Services said: “The findings in the report corroborate our experience from many years of investigating insurance claims. We know that the majority of people are merely opportunists either looking to bolster a genuine claim by exaggerating what was stolen or lost, or those who think they can simply get away with claiming for the odd TV or carpet.

“Our accredited psychological assessment method, known as the conversation management process is unique in the insurance industry, and we use it successfully to sift out the fraudsters. We hope that insurers will benefit from this report and will use the findings in conjunction with their counter-fraud measures.

“It is imperative to demonstrate the impact that all these small claims have on the industry, to some extent more so than large organised fraud schemes, and warn opportunists that the industry is cracking down on those who think what they are doing isn’t really illegal, or doing any harm to anyone.”

Further studies will be carried out by the University of Portsmouth to isolate fraudulent insurance claim risk according to where people live in the country and their income.


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