A shopper deliberately slipped on a wet bag in a supermarket to make a £10,000 bogus injury claim. He claimed he suffered head and body injuries, but the shop’s CCTV footage showed him easing himself to the floor before calling for help. A man claimed his fiancée’s engagement ring was stolen while on holiday in Brazil, only for a picture of the woman wearing the ring to appear on Facebook. And a postman claimed that he could not walk unaided, dress himself or drive after an accident at work. But he was filmed playing guitar at a music festival. And a bus inspector was an ‘insider’ in a ‘crash for cash’ claim of £500,000 from insurers; the inspector’s report was meant to convince the insurer that the collision – a driver slammed on his brakes on purpose – was genuine.
These were among the 130,000 fraudulent claims that insurers detected, equivalent to 350 a day, a rise of 9pc on 2013. The value of these frauds was £1.32 billion, again a 3pc increase on 2013. Between 2009 and 2014 the overall value of frauds detected has risen by 57pc, says the Association of British Insurers (ABI).
The ABI is running a conference on ‘Next steps in tackling the Compensation Culture‘ on September 8, at 51 Gresham Street, London, EC2V 7HQ.
Dishonest motor insurance frauds were the most common and of highest value; a total of 67,000 detected, a rise of 12pc on 2013, and valued at £835m, up 3pc on 2013. The number of liability insurance frauds detected jumped by 75pc to 19,800, with a value of £330m, a 20pc rise on 2013. According to the ABI this reflects insurers’ greater focus on bogus liability claims, including ‘slip and trip’ claims, and industrial deafness. The trade body puts a fall in the number of detected fraudulent property insurance claims (domestic and commercial) down to the deterrent message getting home to potential cheats. In 2014 the number of detected property frauds at 24,533 was 29pc lower on 2013, and the detected value at £108m was down 21pc.
James Dalton, ABI’s Director of General Insurance Policy, said: “Insurers are determined to do whatever it takes to identify and take tough action against fraudsters to protect their honest customers. The vast majority of customers are honest, and should not have to pay for the fraudulent minority. The insurance industry invests heavily in its counter fraud defences, and the results are helping to keep motor and home insurance competitively priced.
“Insurance cheats are now more likely to get caught than ever before, whether they are making a dishonest claim or lying when applying for cover to get a cheaper premium, and face long-lasting and serious consequences. As well as the possibility of serving a custodial sentence, they will find it difficult to obtain vital financial services such as mortgages and loans, future job prospects are likely to be adversely impacted and family relationships suffer.
“Initiatives such as the Government’s Insurance Fraud Task Force and the growth of the Insurance Fraud Register show that there will be no let-up in the battle against insurance fraud. Honest customers rightly expect nothing less.”
Besides keep premiums lower, the ABI points to other reasons for tackling insurance fraud: the risk of physical harm to innocent motorists that are victims of ‘crash for cash’ staged motor accidents. That doctors are asked to confirm fake injuries, such as whiplash, the 999 services are called to staged crashes, and the time and money spent investigating fraudulent claims, all add up. The proceeds of insurance fraud to fund or facilitate other serious crime, such as drugs trafficking, the authorities add.
Ben Fletcher, Director of the Insurance Fraud Bureau (IFB), said: “The resolve to fight insurance fraud through effective collaboration and partnerships with law enforcement, government and public sector organisations is making an impact to protect the honest customer. By tackling cross-industry fraud that insurers alone cannot eradicate the Insurance Fraud Bureau is working with the insurance industry and police forces across the UK to detect fraudsters and bring them to justice. The consequences for insurance cheats can be life-changing as they face the prospect of heavy fines, a criminal record and imprisonment plus potentially restricted access to financial services.”
City of London Police Detective Chief Superintendent Dave Clark, Head of the Economic Crime Directorate which houses the Insurance Fraud Enforcement Department, said: “Since the launch of the Insurance Fraud Enforcement Department in January 2012, its work with industry has seen detectives investigate millions of pounds worth of insurance fraud perpetrated against the sector and consumers. The unit takes the fight to fraudsters across England and Wales 365 days a year, with 1,150 arrests and voluntary interviews undertaken and many court convictions secured in just three and a half years. Looking forward, the team will continue to work with partners operating within the market to ensure the criminals feel the full force of the law.”
