Tag: Insurance Fraud Bureau

Public warned of rise in identity theft

  • The Insurance Fraud Bureau (IFB) reports a 97% rise in organised insurance fraud being facilitated by stolen identities in the past year. 
  • Identity theft has a devastating financial impact on victims and fuels a wide range of insurance scams, including dangerous crash for cash activity and ghost broking.
  • Cifas exclusively reveal most victims of impersonation are now over 61 years old.

The public is being urged to look out for signs of their personal information being misused as the Insurance Fraud Bureau (IFB) finds a rise in scams fuelled by identity theft.

Reports of insurance fraud resulting from stolen identities provided to the IFB by UK insurers, police and regulators have nearly doubled in the past 12 months.[1]

Stolen identities are highly valuable to criminals as they can be used for a range of harmful scams, leaving victims in financial hardship and emotional distress.

In an urgent bid to protect more people from being targeted, the IFB has launched a campaign to encourage the public to be vigilant.

Ursula Jallow, Director at the IFB, said: “We’ve seen a worrying rise in insurance fraud made possible by identity theft. Stolen personal information can be used for every financial crime imaginable, and victims of impersonation who are often elderly or vulnerable, face devastating consequences.

“We urge everyone to be cautious when sharing personal details and to spread the word to their friends and family. If anyone thinks their information has been used in an insurance scam, they should report it to our confidential CheatLine.”

The IFB often finds that drivers who are cheaper to insure are frequently impersonated by Ghost Brokers, who take out policies in victims’ names and doctor these to sell them on at higher prices.

Misrepresented motor insurance policies are also used by fraudsters to facilitate dangerous Crash for Cash scams and to insure vehicles linked to serious crime.

In a recent IFB investigation with Hertfordshire Police, it was found that hundreds of identities had been stolen by a gang who took out fraudulent motor insurance policies to steal brand new cars from dealerships via finance deals.

In another investigation, the City of London Police’s Insurance Fraud Enforcement Department (IFED) and the IFB suspected that a gang had impersonated over 200 people – from personal to commercial policyholders – to either make bogus claims in their names and divert funds to third parties, or pretend victims had caused collisions to fraudulently obtain compensation.

Cifas, a not-for-profit organisation which protects public, private and voluntary sectors from fraud, says identity fraud dominates the National Fraud Database (NFD) making up 64% of all cases. Concerningly, their records also show most victims of impersonation are now over 61 years old.[2]

Cifas believes that the cost-of-living crisis has resulted in this age group being more susceptible to social engineering tactics and enticing offers to ‘sell’ their identity. They have also seen more younger age groups sharing sensitive information on social media and messaging apps.

Campaign video:

https://vimeo.com/manage/videos/932461573/8027f625eb

Stephen Dalton, Director of Intelligence at Cifas, said: “Identity fraud continues to be a favoured tactic for many criminals when exploiting innocent people to steal their identities and use personal details to fraudulently open and abuse financial products and services.

“It’s therefore vital that individuals protect their information by never divulging financial details or credentials that could be used against them. We support IFB’s campaign to bring this important issue to the public’s attention and remain committed to working with our insurance members to keep the public safe from fraud and financial crime.”

Protecting your identity

Fraudsters can attempt to impersonate someone with just a few stolen details (such as a name, date of birth or home address) and this can be used for most frauds; including insurance, banking and credit fraud.

Victims may be pursued by third parties looking to recover costs of financial arrangements made in their name, which can impact their credit score making it difficult to get loans, credit cards or even mortgages for years to come.

Simple measures can help to protect personal information:

  • Create strong unique passwords for personal accounts.
  • Avoid publicly sharing personal details on social media.
  • Only make purchases through legitimate retailers’ websites and be wary of any person or organisation asking to use your bank details.
  • Protect personal devices by installing the latest software and app updates, and where possible opt to use two-factor authentication.
  • Avoid phishing attempts which encourage you to click on links and open files.

If anyone thinks their identity has been compromised for an insurance scam, this can be reported to the IFB’s confidential CheatLine online or via its phoneline (powered by CrimeStoppers) on 0800 422 0421.

Cifas’ victim of impersonation advice has guidance to help people targeted by identity theft.

Industry calls on public to help ‘stop the scams’

** predicted rise in insurance fraud **

A national campaign, called ‘Stop the Scams’, has been launched by the insurance industry to help the public spot signs of scams and report them to the Insurance Fraud Bureau (IFB) Cheatline following predictions that insurance fraud will rise.

Recent figures show fraudulent insurance claims rose by 5% in 2019 with many being linked to dangerous scams. There are concerns the current economic climate could see this figure rise further, following the 2008 recession where fraudulent insurance claims increased by 17%.

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. 

To help protect the public and stop insurance scams rising, the IFB along with the Association of British Insurers (ABI) which represents the UK’s 200 insurers, and the City of London Police Insurance Fraud Enforcement Department (IFED), are launching the ‘Stop the Scams’ ad campaign which will see animated scam warnings rolled out across social media.

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

A ‘Ghost Broker’ is a fraudster who poses as an insurance provider to target people who struggle financially with unrealistically cheap fraudulent insurance deals on social media.

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

This involves a fraudster who intentionally drives dangerously (such as slamming on their brakes with a car close behind) to cause an innocent motorist to crash into them so they can claim for compensation.

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.

One in every ten injury claims for a motor collision is linked to a suspected ‘Crash for Cash’. The scam often leaves victims injured and facing the loss of their no claims discount. 

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.