More than £3 million worth of dishonest insurance claims were blocked every day over the last year, according to new data released today.
Annual records released by the Association of British Insurers showed that hopeful scammers tried to net a total of £1.2 billion in fraudulent claims since July 2019.
This represents a 5% increase on 2018, mostly down to a rise in the number of motor and property scams.
In a joint press release, ABI and police fraud detectives warned customers to beware of fraudulent insurance salesmen - and avoid making their own dishonest insurance claims- or risk facing the consequences.
Among hundreds of criminals netted, one police officer was convicted after fraudulently claiming £10,000 saying he was injured on the road by debris from a passing van- which his own dash-cam footage later revealed to be polystyrene.
Another hopeful scammer was sentenced to 2.5 years after he was involved in a road accident and tried to make a claim for pre-existing damage on his vehicle, using fake documents.
Despite fraudsters' enduring creativity, the City of London Police's Insurance Fraud Enforcement Department (IEFD) told ABI that around 2000 dishonest claims are detected by force each day.
Insurance fraud is not a victimless crime, and the effect of dishonest claims are felt by everyone. As well as bogus insurance claims inevitably increasing premiums for honest customers, certain tactics used by fraudsters, such as 'crash for cash', put the lives of innocent members of the public at serious risk.Said: Detective Superintendent Peter Ratcliffe, Head of the City of London Police's Economic Crime Funded Units
Motor insurance fraud was the most common form of insurance fraud detected, with around £605 million worth of false claims spotted last year.
Three-quarters of these included personal injury claims, which the Association says could be down to scammers trying to cash in ahead of personal injury reforms expected to roll out in April.
The so-called 'whiplash reforms' will make it harder for people to make fraudulent personal injury claims after being involved in a road traffic accident.
Under the new laws, claimants will not be allowed to instruct a solicitor to make personal injury claims worth £5000 or less.
The industry hopes that the reforms will deter scammers from trying to cash in on small-time claims which are difficult to disprove.
As well as more motor fraud claims, property fraud also increased compared to 2018, with 27,000 scams detected over the year- 30% more than in 2018.
The Association put the rise in detected fraud cases down to better prevention measures and detection.
Overall, ABI reported more than double the number of fake applications this year compared to 2018.
The industry makes no apology for its relentless pursuit of insurance cheats, to protect genuine customers, who end up footing the bill through their insurance premiums. Insurers will not hesitate to ensure that fraudsters seeking to profit at the misery and expense of others will suffer severe and long-lasting consequences.Said: Mark Allen, ABI's Manager, Fraud and Financial Crime
also warned consumers to the lookout for insurance sales scams:
Insurers know that the Coronavirus crisis has led to financial hardship for some, and with scammers always preying on people's anxieties, now it is especially important for consumers to be on their guard, for scams like being approached by someone offering cheap motor insurance. The golden rule is never act in haste – if a deal is too good to be true, then it probably is.Mark continued.
Fraudulent insurance policies may be cooked up by scammers using fake policy documents and sold on to customers at a fraction of the market price.
Some scammers even use real information to buy legitimate policies, which they later doctor to match customers' details and sell on to multiple unsuspecting buyers.
These statistics show the problem remains significant and the sad reality is that the frequency of these scams normally only increases in times of recession and financial hardshipsaid Ben Fletcher, Director of the Insurance Fraud Bureau
If you have evidence of insurance fraud, you can report it to the IFB's Cheatline here.
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