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A souper result for honest policyholders!

A fraudulent insurance claim is often seen as a ‘victimless crime’ but in reality every honest policyholder is paying an inflated premium to cover these payments. The scale of this problem is growing, and the latest figures published by the Association of British Insurers (ABI) indicate that the total number of fraudulent claims detected in 2018 rose by 3% over the previous year to 469,000, and their value increased by 6%.

Written by Paul Brown on 28th November 2019

A souper result for honest policyholders!

A fraudulent insurance claim is often seen as a ‘victimless crime’ but in reality every honest policyholder is paying an inflated premium to cover these payments. The scale of this problem is growing, and the latest figures published by the Association of British Insurers (ABI) indicate that the total number of fraudulent claims detected in 2018 rose by 3% over the previous year to 469,000, and their value increased by 6%.

The average fraudulent insurance claim is now worth £12,000 with two fraudsters being convicted of insurance fraud every week, and the number of claims exposed as fraudulent has reached 1,300 every day.

So what is the Insurance Industry doing about it?

Insurers are spending around £250 million every year on measures to tackle this crime. In 2006 the Insurance Fraud Bureau (IFB), a not-for-profit company was established to lead the insurance industry's collective fight against insurance fraud, and in 2012 the Insurance Fraud Enforcement Department (IFED) was established as a specialist police unit, dedicated to tackling insurance fraud. The IFED is funded by the ABI and Lloyds of London members, ​and its team of Detectives, Financial Investigators and Police staff act with operational independence while working closely with the insurance industry.

 

 

The BBC series "Claimed & Shamed” seeks to shine a light on the growing problem of insurance fraud and features fraudulent claimants being caught on camera.

A recent show in the series featured a claim presented to Zurich Insurance involving a woman who claimed a loose tin of soup on a shop floor caused her to slip, severely injuring her knee which incapacitated her and had a detrimental effect on her life. The following claim investigation process serves to illustrate how insurers seek to protect honest clients by exposing fraudulent claims and acts as a deterrent to would be fraudulent claimants.

The Incident

The matter was reported to the store manager at the time but there were no witnesses who actually saw the woman falling on any item, and there was no other evidence to suggest this had happened. The initial claim against the shop was valued at around £10,000, but after the woman suggested that she was unable to do various tasks around the house, or care for relatives as a result of the injury, the value grew to £100,000.

The Evidence

The store was able to provide CCTV footage from multiple cameras which confirmed that the woman did go into the store that day, and that there was shelf stacking which resulted in a loose tin of soup, but rather than falling over the tin of soup the claimant was actually shown picking up the tin and handing it to a shop assistant.

Given the CCTV footage, the insurer was not convinced that the claim was genuine, however, the claimant’s solicitors decided to litigate and take the matter to court. Consequently, the insurer appointed solicitors to defend on behalf of the policyholder.

Extensive documentation was requested which included medical and employment records, and a full forensic investigation was launched into those documents. The investigation suggested that the claimant had a medical history which included ongoing symptoms for which she had been receiving treatment, raising a question mark over whether this injury actually happened and, if it did, what effect it had given her existing symptoms and conditions.

Material supplied from the Department for Work and Pensions (DWP) showed the claimant had not worked for 20 years prior to the accident, wasn’t able to step out of her home, and wasn’t able to walk more than four metres at a time. Whilst it was claimed her husband had supported her since the accident, DWP records showed that in fact they were not together and hadn’t lived together for several years.

The insurer concluded that the evidence suggested that the woman had fabricated the claim and was looking for compensation for pre-existing ailments and medical conditions.

The Court Case

In light of all the evidence, the claimant was invited to reconsider and discontinue the claim. This invitation was declined and the case proceeded to court. After three days the claimant decided that she wanted to discontinue the claim, which led to the defendant (the store) counter claiming against her for fundamental dishonesty. The judge found the claimant had been dishonest in her support of a claim for care, and as a result the entirety of the claim was dismissed which enabled the defendant to recover the costs of the legal proceedings in full.

The Message

This case demonstrates how CCTV evidence and forensic investigation are invaluable when defending a claim. It also illustrates how insurers and their appointed defence lawyers work tirelessly to fight fraudulent claims, and fraudsters are warned that, should they seek to exaggerate genuine incidents, they stand the risk of losing everything and facing the consequences.

Sources:

https://www.abi.org.uk/news/news-articles/2019/08/detected-insurance-frauds-in-2018/

https://insider.zurich.co.uk/industry-spotlight/catching-fraud-soup-erficial-claim/?utm_source=Insider%20Email&utm_medium=October

See other blogs related to: Fraud , Insurance

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