** predicted rise in insurance fraud **
Currently at least one insurance scam takes place every minute in the UK, leaving victims devastated and costing honest consumers more than £3 billion each year.
Common insurance scams highlighted by the campaign:
Compensation scams
This is when a fraudster or unscrupulous firm contacts someone out of the blue to tell them they may be entitled to compensation.
If convinced, victims will hand over their personal details which can be used to steal their identity or bank funds, or they could be encouraged to take out a fraudulent insurance claim.
With record numbers out of work or losing money due to the disruption of Covid-19, these scammers may offer to recover financial losses incurred as a result of the pandemic.
‘Ghost Broker’ scams
These fraudsters are known for selling fake car insurance. However, with Covid-19 impacting so many people’s work and travel plans, ‘Ghost Brokers’ could also offer deals that claim to compensate further disruption.
‘Ghost Broker’ scams are rising. The IFB has seen its percentage of investigations into the issue double in recent years. Research also shows one in three 18-24 year-olds has seen a suspicious insurance advert on social media.
‘Crash for Cash’ scams
With many people still getting back into the habit of driving after months of reduced activity, the risk of falling victim to a ‘Crash for Cash’ is higher if driving skills are not up to scratch.
Ben Fletcher, Director of the IFB, said: “With Covid-19 causing so many people to lose out financially it sadly means there are more opportunities for insurance scammers to exploit the vulnerable. These fraudsters don’t care who suffer – from the elderly to key workers, we’ve seen them get targeted.
“It’s never been more important to raise public awareness of insurance fraud which is why we’re launching the ‘Stop the Scams’ campaign. If anyone sees something that doesn’t look right, they should report it to the IFB Cheatline.”
Mark Allen, Fraud and Financial Crime Manager at ABI, said: “Insurance fraud is no victimless crime. While the Coronavirus crisis has led to financial hardship for many, no one should think that committing an insurance fraud is a path to easy money.
“From getting a criminal record and possibly a jail sentence, to finding future insurance and other vital financial products like mortgages and loans, much harder to obtain and more expensive, the consequences of committing fraud will be severe and long-lasting.
“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.”
Detective Superintendent Peter Ratcliffe, Head of the City of London Police’s Economic Crime Funded Units, said: “Fraudsters will use any opportunity to try and steal money from the public, including the exploitation of tragic events such as the current worldwide COVID-19 pandemic.
“We work effectively with the IFB, ABI and insurers to tackle insurance fraud, and our unit has continued the fight against criminals, despite the challenges posed by coronavirus.
“Our industry partners provide us with valuable intelligence to help us identify suspected fraudsters and carry out this enforcement activity, but we also rely on information from the public. As such, it’s vital people report to IFB’s Cheatline when they have information about a suspected insurance fraud or fraudster.”
Evidence of an insurance scam can be reported to the IFB’s confidential and anonymous Cheatline (powered by Crimestoppers) on 0800 422 0421 or online.
The IFB uses information from Cheatline reports to work with insurers, the police and industry watchdogs to help fight fraud, keep people safe and keep costs down.
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