Insurance fraud soars due to cost of living crisis

The cost of living crisis has seen insurance fraud soar by 61% as people feel the squeeze, new figures suggest.

The City of London Police’s Insurance Fraud Enforcement Department (IFED) said its figures, which cover March 2022 to April this year, suggest a rise in ‘opportunistic fraud’ rather than professional fraudsters.

This could be claims being exaggerated or false information provided when applying for insurance, with examples including faking an injury after a genuine road traffic accident or claiming twice on insurance after losing an item of jewellery, the department said.

The rise has prompted police to warn the public not to be tempted to bump up claims as they battle rising costs and a squeeze on their finances.

According to IFED figures, motor insurance fraud was the most common type of opportunistic fraud referred to it for the period between March 2022 to April 2023, accounting for 51% of the cases the unit received, while property insurance fraud was the second highest at 29%.

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In one operation, officers from IFED investigated 18 opportunistic claims, worth an estimated £216,875 in total, resulting in multiple search warrants, charges and arrests across the country.

Collette Drysdale, 54, of Dunstable, Bedfordshire, was charged with fraud by false representation after officers suspected that she submitted a personal injury claim falsely stating she was in her car when her neighbour’s vehicle crashed into it. She is due to appear in court on a date yet to be set.

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In another case a 43-year-old man from south London was ordered to pay a £500 fine plus £500 in court costs at Inner London Crown Court after pleading guilty to two charges of fraud by false representation by submitting claims for the same television on two home insurance policies.

And in another case, a 52-year-old man from Hayling Island, Hampshire, who stayed in temporary accommodation after water damage to his home, was cautioned by IFED officers after he edited hotel invoices to inflate the costs shown so he could send them to his insurance provider.

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Police and insurance providers warned of the potential effects of submitting fraudulent claims.

Detective Chief Inspector Tom Hill, of the Insurance Fraud Enforcement Department (IFED) at City of London Police, said: “We understand that the rising cost of living has presented challenges for many people across the country but turning to crime to make some quick cash is never the answer.

“Committing insurance fraud can leave you with a criminal record, and have long and serious consequences such as criminal prosecution and a prison sentence.

“At the very least, it can make it harder to get insurance in the future. Offenders can be placed on the Insurance Fraud Register, run by the Insurance Fraud Bureau, which can prevent them from accessing essential insurance services for several years.”

Mark Allen, Assistant Director, Head of Fraud and Financial Crime, at the Association of British Insurers, said: “Insurers appreciate the financial pressures that many households are facing with higher cost of living bills and will pay legitimate claims as quickly as possible.

“But making a fraudulent insurance claim to raise some cash will lead to further financial hardship, with the only thing that you could gain a criminal record.

“You will find it harder and more expensive to get future insurance and other financial products.”

He urged people who are worried about being able to afford their insurances to talk to their insurer to see what support and help they may be able to provide.

Jon Radford, Head of Intelligence, Investigations and Data Services at the Insurance Fraud Bureau (IFB), added: “We know times are hard, but if people think turning to insurance fraud can help their financial woes go away, they can think again.

“When someone is added to our Insurance Fraud Register, they can have their access to essential insurance services denied for five years and this has devastating consequences – from being unable to insure and drive a car, to being refused buildings insurance and ultimately access to a mortgage.

“Every day we’re collaborating with IFED and our insurer members to detect and disrupt fraud networks across the country, making life harder for scammers. Don’t chance fraud, it’s not worth the risk.”