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Cifas members report a 27% rise in false insurance claims across the UK in the past year, with spikes in household and motor insurance

19 March 2019

Consumers warned against temptation to commit ‘harmless’ fraud

  • Fraudulent claims in household insurance have increased by 52%, with claimants aged 31-40 the biggest culprits, reported Cifas members
  • Fraudulent claims in motor insurance have increased by 45%, with 21-30 year-olds making up the largest group, according to data from Cifas members
  • 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

Today, Cifas, the UK’s leading fraud prevention service with over 450 members, 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 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. 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 get 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; 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.

Chief Executive Officer of Cifas, Mike Haley, says:
"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.”

-ENDS-

For more information, please contact:

Golin
T: +44 (0)20 067 0008
E: Cifas@golin.com

Notes to editors:

 

False insurance claims by age group as percentage change between 2017 and 2018 from Cifas members:

Age band
Percentage change
Under 21
86%
21-30
8%
31-40
19%
41-50
24%
51-60
39%
61+
73%

False insurance claims by UK region as percentage change between 2017 and 2018 from Cifas members:

Region
Percentage Change
East
48%
East Midlands
0%
London
14%
North East
-14%
North East
-14%
North West
30%
Scotland
40%
South East
22%
Wales
-24%
West Midlands
26%
Yorkshire and the Humber
29%

Proportions of age groups fronting an insurance policy recorded by Cifas members by year:

Age Band
2017
2018
Under 21
9%
16%
21-30
40%
58%
31-40
24%
12%
41-50
15%
8%
51-60
8%
4%
61+
4%
2%

About Cifas
Cifas exists to prevent fraud and financial crime. We are an independent, not-for-profit membership organisation that protects businesses and individuals through effective and secure data and intelligence sharing between the private, public and third sectors. In 2017, Cifas member organisations prevented over £1.3 billion of fraud losses.

Cifas data is included in the Office of National Statistics England and Wales Crime Statistics of police recorded crime and works alongside law enforcement agencies in tackling fraud. Cifas also offers Protective Registration for individuals whose identities are at risk of being used fraudulently, for instance after a burglary. We also run a scheme called Protecting the Vulnerable, offered free of charge to local authorities to protect those under the care of Court Deputies who are unable to access financial products and whose identities may be at risk.

Reporting fraud
The Insurance Fraud Bureau (IFB) Cheatline allows members of the public to confidentially report suspected fraudulent activity. This can be done online or via 0800 422 0421.

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Posted by: Joe Towner
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