£25 million of fake insurance claims stopped every week

Insurers are thwarting 2,400 fraudulent insurance claims worth £25 million in total every week, industry figures show
By Vicky Shaw, Press Association Personal Finance Correspondent

Insurers are thwarting 2,400 fraudulent insurance claims worth £25 million in total every week, industry figures show.

Some 125,000 dishonest insurance claims valued at £1.3 billion were recorded in 2016, according to the Association of British Insurers (ABI).

The fraud figures were generally down compared with 2015, with a 5% fall by number and a 3% decline by value.

The ABI said a focus on stamping out organised fraud, including "crash for cash" staged motor collisions, contributed to the slight year-on-year fall in the number and cost of detected fraudulent claims.

It said, often, organised insurance scams are carried out by highly sophisticated criminal gangs that can put innocent lives at risk, and have links to more serious organised crime, such as money laundering and human trafficking.

The level of organised fraud fell by around 30% on 2015, with 15,000 frauds valued at £174 million detected.

The ABI said the fall reflects the work of the Insurance Fraud Bureau (IFB) and the Insurance Fraud Enforcement Department (IFED), the specialist police investigation unit, in exposing crash for cash scams and other organised frauds, such as criminals offering fake motor insurance.

It is also believed that fraudsters are moving into new areas such as bogus liability claims.

The ABI said there has been an "epidemic" in false food poisoning claims made against some overseas hotels and tour operators, often encouraged by some disreputable claims management firms.

The body said it has seen a small rise in opportunistic spur-of-the-moment motor insurance frauds, which it said may also be being encouraged by some disreputable claims management firms.

The ABI said 57,000 opportunistic motor insurance frauds were uncovered in 2016, compared with 54,000 in 2015.

The ABI said insurance cheats who have been exposed include:

:: A motorist who received a six-month prison sentence after cutting into a lane of cars queuing to cross the Severn Bridge. He claimed someone else had collided with him and that he had suffered an injury, but CCTV footage showed he had caused the accident.

:: A doctor who was jailed for two years after making false medical claims against insurers worth £183,000.

:: A foul-mouthed cheat who ended up in court after being abusive to insurance company staff. His claims included an injury he said he suffered following his cooker exploding, but the cooker was undamaged.

:: A woman who admitted making three false burglary claims. The insurer became suspicious when documents to support her claim were on unheaded paper and contained spelling mistakes.

James Dalton, the ABI's director of general insurance policy, said: "The vast majority of insurance claims are genuine, with millions being paid to customers every day.

"The industry does everything it can to keep premiums down and tackling fraud, which drives up prices for honest customers, is at the heart of that."

Ben Fletcher, director of the IFB, said: "Fraud is harmful in a number of ways, including the real and present physical risk posed day in and day out to road users, alongside the financial impact on individuals and business alike.

"These reductions reflect the general trend that we have seen in organised motor scams and is a welcome reflection of industry efforts to tackle the problem year-on-year."

Head of the City of London Police's IFED, Detective Chief Inspector Oliver Little said: "Insurance fraud is taken extremely seriously and the consequences for those involved are severe. IFED will continue to work with the ABI to target those who carry out this activity."

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