Issue 93 : Fake claims soar in number
7 October 2008
The Association of British Insurers (ABI) has let it be known that many of their members are reporting an increase in fraud incidents, confirming what many in the industry had thought inevitable anyway. Some insurers have reported an increase in fraudulent claims of up to 80 per cent on last year’s figures, with many customers pretending that possessions such as expensive cameras and iPods have been stolen overseas, while still others are considerably increasing the value of an item that has been stolen in the case of genuine theft. There are also cases of travellers who booked holidays earlier on this year now realising they cannot afford to go, and are cancelling their trips after feigning illness and tricking doctors into issuing certificates stating they are unwell.
Malcolm Tarling, spokesman for the ABI, confirmed that the association had recorded a definite increase in fraudulent activity this summer: “Travel insurance is always susceptible to fraud when times are tough and people look at ways of raising what they believe is easy money,” continued Tarling, “because the losses are abroad and police overseas are often not interested in investigating, people can claim possessions have gone missing.” Fraud is notoriously difficult to prove, however, meaning few cases are brought to the courts. However, Tarling explained: “If your claim is rejected, that goes on your credit rating. It will make loans and insurance more expensive in the future.”
AXA is one insurer that has openly admitted it is receiving higher numbers of fraudulent claims recently – and for travel insurance in particular, the number of false claims was up by 38 per cent in July compared to the same period last year. Richard Davies, group fraud risk manager, said: “We’ve seen a rise in opportunistic fraud connected to the credit crunch. We’re rejecting many more claims than this time last year.” David Ketteridge of Ketteridge Group Ltd, a travel insurance broker in the UK market, noted: “Suddenly people are losing their luggage. Claims that were £200 are now £300, [and] we’re getting cancellation claims from people who can’t afford trips.”
