Fraudsters making 350 fake insurance claims every day
CONMEN were caught making 350 fraudulent insurance claims a day last year, as they tried to net £1.32billion in compensation.
The 130,000 bogus claims detected in a crackdown revealed a booming trade in fake ‘slip and trip’ claims, when fraudsters throw themselves to the ground and pretend they have suffered life-changing injuries.
The Association of British Insurers said the £3.6million which crooks tried to claim every day is around double the sum lost from all forms of shoplifting.
Dishonest motor insurance claims were the most common frauds, with some 67,000 detected, worth £835million. This represented an increase of 12 per cent on 2013.
Insurers have had to cope with ‘cash for crash’ scams organised by criminal gangs use staged road accidents as a peg for huge personal injury claims for whiplash and other ailments.
There was also a rise in the number of so-called liability frauds – up 75 per cent to 19,800, and with a value of £330million.
This reflect a focus by investigators on spurious ‘slip and trip’ claims in business and commercial premises, and also in the street, when councils are pursued for trips and falls apparently caused by loose paving stones and potholes.
The ABI said a focus on fraud is helping to keep premiums down with the cost of comprehensive motor cover falling by 5 per cent in 2014, and home contents down by 3 per cent.
James Dalton, director of general insur-
‘Protect the honest customer’
ance policy at the ABI, 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 longlasting 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.’
Ben Fletcher, director of the Insurance Fraud Bureau, 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.’
Demands for pay- outs have also been fuelled by the rise of claims management firms, which bombard consumers with cold calls and text messages.
The companies, often linked to ambulance- chasing solicitors, demand massive fees that are passed on to insurers and the public in their annual premiums.
In last week’s Budget, the Chancellor announced a review of this industry and plans for a cap on charges.