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Own goals, cruise con, DIY vandalism - fall in insurance fraud good news for honest customers, but no room to go easy on the cheats says the ABI

  • The number and cost of fraudulent claims fell in 2021, but the average scam uncovered at a record level of over £12,000. 
  • Motor insurance claim fraud still the most common insurance con. 

The sustained crackdown on insurance fraud is paying dividends, with a fall in both the number and cost of dishonest claims uncovered last year according to data out today from the Association of British Insurers (ABI). However, the average detected fraud was at a  record £12,283, due to the slower fall in their total value.  

The figures highlight that in 2021, compared to 2020: 

  • The number of fraudulent claims detected at 89,000 fell by 5% to their lowest since 2007. Their total value at £1.1 billion dropped 2% to the lowest level since 2012.  
  • Motor insurance claim frauds continued to be the most common, albeit that last year saw a fall in their total volume  and value. There were 49,000 frauds detected, down 7%, although their value, at £577 million, fell by only 1%. The number  of organised motor frauds uncovered at 10,617 rose by 8%. This rise in part reflected initiatives by the Insurance Fraud Bureau to tackle crash for cash staged motor scams. 
  • While the number of property insurance frauds dropped to 18,000 compared to 24,000 in 2020, their value rose to £124million, up 9%. This was driven by a rise in the value of commercial frauds uncovered. 
  • The number of fraudulent liability insurance claims uncovered at 12,978 dropped by 10%; their value, at £378,000, fell by 8%. 

Some of the more unusual insurance cheats exposed include:  

Cancer con. A woman lied to family, friends, and her insurer when she reported that she had been diagnosed with terminal cancer and had approximately one year to live. Her claim, which would have paid over £130,000, fell apart when the hospital confirmed that they had no record of her as a patient. She was sentenced to two years imprisonment suspended for two years, with a six-month electronically tagged curfew. 

Pyramid scheme. A woman pretended to be a passenger in a genuine vehicle collision to make a bogus personal injury claim for nearly £4,000.However,investigations revealed that she was in fact on holiday in Egypt when she was supposedly receiving medical treatment.  

Own goal 1. A professional footballer received  a one-year community order after admitting taking out a one-hour motor insurance policy to try and cover his tracks after colliding with another vehicle while driving uninsured 

Own goal 2. A semi-professional footballer in Scotland was filmed scoring a hat trick, despite claiming he had suffered whiplash in a car crash only hours before. 

D.I.Y. vandal. A man who claimed that his car had been vandalised was found to have caused the extensive damage himself.  

Ghost broker exposed. A man was convicted of pocketing over £50,000 in just over 15 months by selling hundreds of fraudulent motor insurance policies. He was sentenced to 21 months imprisonment suspended for two years and ordered to complete 180 hours of unpaid work.  

Blocked by a black box. A trio attempted to defraud insurers of over £48,000 with a crash for cash scam, but were foiled when their in-car  telematics (black box) showed that the damage had been caused on a different date while the vehicle was stationary. The group were sentenced, with one receiving 12 months imprisonment.  

Not so fast and furious. Two men were found to have grossly exaggerated a minor accident. They both made personal injury claims after being hit by a drunk driver at around 40 mph, but were foiled when the driver revealed that his foot had slipped from the brake and had rolled into the car at no more than three miles per hour. Both men were sentenced to 4 months imprisonment, suspended for 18 months.  

Shop till you get caught. A mother of two received  a suspended prison sentence after being caught claiming for items worth over £3,000 after alleging her luggage had gone missing following a Caribbean cruise. Not only was the claim fake, but she had also already been refunded for many of the items after informing the online retailers that they had never been delivered. 

The name claim game. A fraudster was ordered to pay back the £58,000 in compensation after claiming twice for the same car accident to the same insurer under two different names. He was sentenced to 22 months in prison suspended for 18 months.  

Mark Allen, the ABI’s Chief Fraud and Financial Crime Officer, said: 

Mark Allen500x500.JPG“Insurers continue to work hard to pay legitimate claims as soon as possible. With many households battling the cost of living crisis, more than ever honest customers rightly expect there to be no let-up in the industry’s clamp down on insurance fraud, the costs of which end up being absorbed in the premiums paid by all customers. The fall in reported insurance fraud reflects the industry’s sustained counter fraud investment and collaborative approach, but no one can lower their guard against the cheats. 

“Fraudsters thrive in hard times, preying on the vulnerable. So we urge people to be vigilant to the threat of financial scams, including those carried out online. The golden rule is if a deal looks too good to be true, then it probably is. Anyone with suspicions should check the credentials of who they are dealing with to ensure they are genuine. If you suspect a fraudulent insurance claim you should alert the free, confidential Insurance Cheatline, run by The Insurance Fraud Bureau.” 

Ben Fletcher, Director at the Insurance Fraud Bureau (IFB), said: 

“The insurance industry is working harder than ever to stop fraudsters in their tracks and the fall in scams seen in 2021 is a great reflection of these efforts. While we welcome this positive progress, fraud levels are still far too high and countless innocent people sadly continue to be targeted by devastating insurance scams.  

“We must do more to fight fraud. Every day we're working in partnership with insurers and the police to investigate suspicious activity and bring fraudsters to justice, but we also need the public’s help. If anyone has evidence of insurance fraud, we encourage them to report it to our free confidential Cheatline at insurancefraudbureau.org or 0800 422 0421." 

Detective Inspector Andrew Thompson, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), said: 

“Whilst it is positive to see that detected insurance fraud rates fell in 2021, both IFED and the insurance industry cannot afford to take its foot off the pedal when it comes to disrupting and uncovering these crimes. We have a bumpy road ahead of us, with a predicted rise in fraud due to the cost of living crisis driving people to find other means of financial gain. The need for solid partner-working between law enforcement and the industry is now more important than ever to prevent an epidemic of insurance fraud.” 

For more information contact the Press Office.

Last updated 25/08/2022