Cifas members report 27% rise in false insurance claims across past 12 months

Cifas, the UK’s fraud prevention service, has released new figures showing a marked increase in the number of individuals committing insurance fraud with false claims. Between 2017 and 2018, there has been a nationwide increase of 27% in fraudulent insurance claims.

The new figures reveal that Cifas members identified household insurance fraud and motor insurance fraud as the two biggest causes of false claims, with a 52% and 45% increase respectively.

Meanwhile, there’s an overall decrease in another form of insurance fraud: fronting an insurance policy. ‘Fronting’ is when a driver claims they’re the main user of a vehicle that’s actually driven by a young driver or other high-risk motorist in order to receive lower premiums (for example, by parents for their children). Cifas members reported over 300 cases of ‘fronting’ in 2018, with the data showing an 18% increase in the proportion of 21-30 year olds conducting this type of fraudulent activity.

The release of these alarming statistics marks the launch of Cifas’ ‘Faces of Fraud’ campaign. The campaign sheds light on the daily temptations consumers face to commit fraud: the lies, exaggerations, deceptions and “seemingly” harmless opportunities to make some quick cash or gain a better deal that are actually criminal acts.

Cifas is therefore urging people to stop, think and consider the consequences of making false insurance claims or fronting insurance policies which can be far more serious than many imagine. Consequences can include non-payment of claims, cancellation of the insurance policy, individuals having to pay costs that arise from an accident and a record with Cifas and the Insurance Fraud Register, in turn making it more difficult to obtain insurance and other financial services.

A given case could also be reported to the police for investigation, potentially leading to a criminal conviction and a prison sentence.

Mike Haley, CEO at Cifas, stated: “False insurance claim fraud and fronting insurance policies fraud are often seen as an easy way to make a bit of money without hurting anyone. However, the idea that fraud is a victimless crime is completely false. First, false insurance claims and fronting insurance policies are illegal. They can impact your life and career, making it near-impossible to buy insurance in the future and can even lead to a criminal record. Second, committing fraud hurts everyone: your neighbours, your friends, people in the area and the UK as a whole. Insurers have to spend longer reviewing insurance claims and policy requests, premiums go up and everyone loses out.”

Haley added: “As the rise of false claims in household and motor insurance shows, many people are seemingly unaware of the risks they’re running and the consequences it can have by committing everyday fraud. While the overall downturn in fronting insurance policies is a positive sign, the fact that young people are increasingly more likely to commit that type of fraud highlights the need for continuing education. More needs to be done to raise awareness about the harm of fraud and financial crime.”

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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