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From Mr Whippy to giggling conmen no let up as insurers turn up the heat on insurance cheats

  • Tough penalties, including prison, await insurance fraudsters as insurers uncover 2,500 frauds worth £25 million every week.
  • The number of liability insurance frauds, such as ‘slip and trip’ claims, foiled up by over a third.
  • Luggage cheat jailed for two years; bogus death claim leads to seven  year jail sentence.

The insurance industry’s ongoing crackdown against insurance fraud is highlighting the lengths some cheats will go to in making dishonest insurance claims according to latest data published by the ABI today (13 September). The commitment to fighting fraud is helping to keep insurance premiums as low as possible for honest customers.

In 2015:

  • Insurers detected more than 130,000 fraudulent claims, equivalent to 2,500 a week, up 6% on 2014. These frauds were valued at £1.3 billion, down 3% on 2014.
  • There was a significant rise in dishonest liability insurance claims detected, such as ‘slip and trip’ claims. The number, at 26,900, increased by 36%, and their value, at £391 million, was up 14% on 2014. This reflects the industry’s  focus on this area that has increasingly been targeted by fraudsters, partly as a result of the Government’s clampdown on whiplash, and the reduction in legal costs for road traffic accident claims.  
  • Dishonest motor claims remained the most common frauds and of highest value - 70,000 detected, down slightly at 2% on 2014, with a value of £800 million, down 10%. This welcome fall reflected improved management of frauds within the industry, and the work of the Insurance Fraud Bureau (IFB) and the Insurance Fraud Enforcement Department (IFED).
  • While the value of property frauds uncovered continued to fall - down 2% to £107 million on 2014, the number of detected frauds at 27,500 rose by 7%. Opportunistic property fraud remains an ongoing threat.

James Dalton, ABI’s Director, General Insurance Policy, said:

“Insurance cheats do not lack nerve or ingenuity, which is why there will be no let-up in the industry’s commitment to protect honest customers. The chances of getting caught have never been greater, and the consequences, such as a prison sentence and difficulty in getting future insurance and other financial products, have never been more severe and long-lasting. The scale of frauds uncovered shows that the industry’s £200 million a year investment in tackling fraud is paying dividends, as is the collaboration with the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department. And the industry is working hard with the Government to implement the recommendations of the Insurance Fraud Taskforce to make the industry even more resilient to this crime.

“Reducing fraud is part of a bigger picture of reducing unnecessary costs, so that honest customers benefit from the most competitive insurance deals. This is why it is important to ensure that the Government implements further proposals aimed at tackling rising personal injury claims, and that there are no further increases to the rate of Insurance Premium Tax.”     

Examples of cheats caught out include:

  • He did it for the lolly. A man was convicted of staging fake road accidents in his Mr Whippy ice cream van. Had he been successful he would have pocketed around £100,000.
  • Laughing cheats. A gang of 19 fraudsters were jailed for between 12 and 21 months after staging a bus crash. CCTV footage showed the gang members laughing as they feigned whiplash injury, despite the footage showing that litter on the bus floor did not move during the incident.
  • An open and shut case. An aircraft engineer was jailed for two years after he claimed that £189,000 worth of luggage was lost on a flight when the suitcases were shown to have been empty when they were checked in.
  • Cooking up a con. A chef claimed for neck, shoulder, leg, wrist, back and teeth injuries following an alleged fall on a wet canteen floor. CCTV clearly showed her deliberately staging the fall. Video footage of this incident is available.
  • Park and lied. A man claimed £5,000 compensation for neck, back and arm injuries he said he had suffered following a vehicle collision in a retail car park. However, CCTV footage from the retailer clearly showed that the man was not in his car at the time. Video footage of this incident is available.
  • Running a scam. An enthusiastic runner was found to have made a fundamentally dishonest claim for personal injuries after his Twitter account showed him competing in a 10k road race when he was supposedly suffering from severe neck and back pain.  
  • No ring of truth in it. Claiming for her wedding ring that she said had been lost, a policyholder supplied a photo of the ring that was proven to have been taken the day after the alleged loss had happened.
  • Invented death. A man claimed on life policies of a friend whom he alleged had died in a car crash in Africa. No trace of either the friend or the accident could be found. He subsequently admitted fraud and was jailed for seven years.

Ben Fletcher, Director of the IFB, said: 

“Following increased investment from the insurance industry, the IFB continues to ensure that we do not ease up on taking the fight to the fraudster. We are building new systems and working with more organisations to ensure there is nowhere to hide, regardless of what product line the fraudsters try and attack. As part of that we have been asked by the industry to build systems that will find scams in new ways across property and liability. That will start to produce results in early 2017 and we will see the IFB double the number of new scams it identifies for the industry over the next three years.”

Detective Chief Inspector Oliver Little, from the Insurance Fraud Enforcement Department (IFED) said:

“Since 2012 the Insurance Fraud Enforcement Department has investigated hundreds of crimes and spoken to well over 1600 suspects. Our operational day-to-day experience is reflected in these figures, as criminals change tactics to try and make money from insurers. 

“A lot of insurance fraud is stopped by the industry but when they succeed, fraudsters take money from all of us. What these figures can't show is the links we've seen in a hardcore of organised criminals between crash for cash and other serious organised crime. Nor can these figures do justice to the real danger of serious injury or death these people bring to our roads. Insurance fraud is a community issue and IFED is committed to working with all partners to stamp it out."

Last updated 15/11/2016