£25 million worth of fake insurance claims stopped every week

Insurers are stopping 2,400 false insurance claims worth £25 million in entirety every week, industry figures reveal.

Some 125,000 fraudulent insurance claims valued at £1.3 billion were reported in 2016, according to the Association of British Insurers (ABI).

The numbers of fraud were down compared two years ago, with a 5% decline in number and a 3% drop in value.

The ABI announced a focus on marking out systematic fraud, including “crash for cash” staged motor accidents, made a contribution to the slight year-on-year plunge in the number and value of detected fraudulent claims.

The report said that most of the time, organised insurance scams are brought out by highly experienced criminal gangs that can put innocent lives in danger and have links to more severe organised crime, such as money laundering and human trafficking.

The level of planned fraud fell by around 30% on 2015, with 15,000 frauds estimated at £174 million identified.

The ABI said the drop reflects the performance of the Insurance Fraud Bureau (IFB) and the Insurance Fraud Enforcement Department (IFED), the specialist police investigation unit, in detecting crash for cash scams and other related frauds, such as criminals giving fake motor insurance.

It is also assumed that fraudsters are moving into new areas such as bogus liability claims.

The ABI said there had been an “epidemic” in fake food poisoning allegations made against some overseas hotels and tour operators, often urged by some dishonest claims management businesses.

The body said it had noticed a small increase in opportunistic spur-of-the-moment motor insurance frauds, which it said may also be being encouraged by some disreputable claims management firms.

The ABI said 57,000 dishonest motor insurance frauds were revealed in 2016, compared with 54,000 in 2015.

The ABI said insurance frauds who have been disclosed include:

:: A motorist who got a six-month prison sentence after cutting into a lane of cars queuing to cross the Severn Bridge. He alleged someone else had crashed with him and that he had suffered an injury, but CCTV footage showed he had provoked the accident.

:: A doctor who was imprisoned for 2 years for making false medical claims against insurers worth £183,000.

:: A cheater who ended up in court after being sharp-tongued to insurance company staff. His claims involved an injury he said he suffered following his cooker exploding, but the appliance was undamaged.

:: A woman who acknowledged making three false burglary claims. The insurer doubted when documents to support her claim were on unheaded paper and contained spelling errors.

Head of the City of London Police’s IFED, Detective Chief Inspector Oliver Little said: “Insurance fraud is taken extremely seriously and the consequences for those involved are severe. IFED will continue to work with the ABI to target those who carry out this activity.”

James Dalton, the ABI’s director of general insurance policy, said: “The vast majority of insurance claims are genuine, with millions being paid to customers every day.

“The industry does everything it can to keep premiums down and tackling fraud, which drives up prices for honest customers, is at the heart of that.”

Ben Fletcher, director of the IFB, said: “Fraud is harmful in some ways, including the real and present physical risk posed day in and day out to road users, alongside the financial impact on individuals and business alike.

“These reductions reflect the general trend that we have seen in organised motor scams and is a welcome reflection of industry efforts to tackle the problem year-on-year.”