30th May 2014
Claims for non-existent pets and crash-for-cash scams have pushed the value of fraudulent insurance claims to a record £1.3 billion.
Figures from the Association of British Insurers (ABI), the trade body for the insurance industry, showed the value of fraudulent claims rose 18% to £1.3 billion last year and insurers detected a total of 118,500 bogus or exaggerated insurance claims – the equivalent to 2,279 a week. The bill equates to double the figure lost to shop lifting in the same year.
The average value of individual frauds was £10,813 and fraudulent motor claims were the most expensive and common fraud. The number of dishonest motor claims hit 59,900, up 34% on last year, and totalled £811 million – an increase of 32%.
The ABI revealed some of the most scandalous cases of fraud it uncovered last year, that show the lengths some individuals will go to get their hands on insurance cash.
This include sixty people, including seven members of the same family, who were convicted of a ‘crash-for-cash’ staged accident fraud that saw the group crash 25 vehicles and claim £514,000.
The scale of crash-for-cash in one area meant a bus company had to scrap a route because it was being targeted in these claims.
It is not just motor insurance that individuals are claiming dishonestly on. A women was jailed for 22 months following a series of invented street robberies, where she claimed expensive items like laptops and designer clothes had been taken.
A vet was also jailed for two years for inventing veterinary claims totalling nearly £200,000 for treating non-existent pets.
Insurers have been clamping down on fraudulent claims and work with a specialist police force – the Insurance Fraud Enforcement Department – to tackle fraud. Calls to the Insurance Fraud Bureau’s Cheatline, where members of the public can report suspected insurance fraud, increased 32% to 6,060 in 2013.
Aidan Kerr, ABI assistant director and head of fraud, said: ‘The vast majority of customers are honest and rightly expect tough action against the fraudsters. Insurance fraud is not a victimless crime, which is why the industry invests £200 million a year in fraud detection, including funding the Insurance Fraud Enforcement Department, and developing the Insurance Fraud Register, a database of known insurance cheats.
‘The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties – ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future – been so severe.’