Issue 92 : Credit crunch prompts fraud concern
1 September 2008
A recent study that showed a 13-per-cent rise in suspicious motor claims in the past three months has served as a warning to travel insurers to be on the lookout for more fraudulent claims as consumers try to claw back some of their hard-earned cash in an effort to beat the credit crunch. Absolute Fraud Management (AFM), who conducted the survey, said it expects similar figures to arise from the inspection of travel insurance claims.
AFM has predicted that one of the biggest rises in claims will be from the ‘cancellation clause’ as householders realise that the two-week holiday they booked back in January is actually too expensive now. It also said that it expects a higher number of claims to be received regarding smaller claims, which in more prosperous times would simply have been ‘written off’ by the owner.
Steve Manton of M Consulting agreed insurers should be aware of people’s tendency to try and get some cash back: “There will be an increase in fraudulent claims as the recession hits.” Meanwhile, Rob Upton, development director at CEGA Group added: “With the economy going the way it its, people might claim for smaller losses when, otherwise, they may not have bothered.” Insurers are saying they are prepared, though, with trained staff on hand to recognise a nervous, and potentially fraudulent claimant, as well as demanding receipts for cameras, phones and other goods.
Allan Clare, head of financial crime at Direct Line Insurance, warned consumers: “Fraudsters need to realise they are far more likely to get caught now than they have ever been. We have not noticed any significant increase in claims over recent months, but have a highly trained team and the latest technology ready to meet any increase in fraudulent activity.”
Chris Price, head of travel for the insurer, added: “It is generally said that during an economic downturn insurers see an increase of fraudulent claims on their books.” He also pointed out, however, that it is difficult to attribute any fluctuation to fraud alone.
