August 7, 2019
Cifas, the not for profit, fraud prevention, membership organisation, recently 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 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 is an overall decrease in another form of insurance fraud: fronting an insurance policy. Fronting is when a driver claims they are the main user of a vehicle that is actually driven by a young driver or other high-risk motorist in order to receive lower premiums: for example, by parents for their children. While fronting insurance recorded by Cifas members is on the decline overall, the share of millennials (21-30 year olds) committing the offence increased by 18% in 2018.
The release of these statistics coincided with 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 get a better deal that are actually criminal acts.
The Cifas campaign is about 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 (IFR), making it more difficult to obtain insurance and other financial services. The case could also be reported to the police for investigation; potentially leading to a criminal conviction and a prison sentence.
“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. Yet 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.”
“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.”
From Flint’s point of view we understand that some people may not have too much sympathy for what they perceive as the ‘man in the street’ getting one over on the big corporations, but the unfortunate truth is that this type of fraud makes insurance more expensive for everyone. It is a fact of life that financial institutions share information and any questionable activity will affect not only your ability to buy insurance, but many other forms of credit and financial products. We do our utmost to get you the best and most cost effective insurance policies on the market. We work with our clients to achieve full disclosure of any details that might prevent payment of a claim. As the advocate of our client we support you to make sure your insurance works as it should.
Since 1988, Cifas has collaborated with organisations from across the public and private sectors to create a non-competitive fraud prevention environment, focused on working with rather than against each other to defeat fraudsters.
One of their main tools is the National Fraud Database where hundreds of organisations from across the public and private sectors share data and intelligence with each other in real time to prevent and combat fraud.
Their 450 members are made up of financial organisations, such as banks, insurers, building societies, credit agencies, financial advisors etc.
Cifas also provides services for members of the public, such as advice and protection from identity fraud, via their Protective Registration. They also offer information on how to keep your details safe on their identity protection page.
Cifas holds information on individuals whose behaviour appears to be consistent with that of known fraudulent conduct. If you’ve been told Cifas holds information about you, you can make a Subject Access Request. Cifas are not a credit rating agency and it will not show up on your records. See their website for further information.