A YouGov survey commissioned by the Insurance Fraud Bureau (IFB) and backed by insurers has shown 58% of people are worried about their personal information being stolen by fraudsters.
Every minute in the UK an insurance scam takes place costing consumers over £3 billion a year. Some of the most common insurance scams facilitated with stolen data include:
- ‘Ghost Broking’ – which involves fraudulent insurance policies being sold on the likes of social media which have often been taken out using someone else’s details.
- ‘Crash for Cash’ – where fraudsters use different-name policies to help facilitate either fabricated or deliberately caused car collisions to try and get compensation.
- Claims farming – where a fraudster or unscrupulous company may access confidential information to target individuals – such as road traffic victims – and encourage them to take out a claim. They may even take out a claim without the individual’s consent which is known as ‘claims vishing’.
With so many people struggling financially because of the disruption of Covid-19, insurers are predicting insurance scams and attempts on identity theft will likely rise.
The UK is currently seeing its worst economic crisis in over 300 years. Notably the 2007-09 recession saw fraudulent insurance claims rise 17% in just one year.
During the national lockdown the IFB detected an increase in financially-desperate firms processing claims for compensation without consent from road traffic victims. In addition, fraudsters started exploiting the state of the job market by advertising fake delivery driver jobs and stealing applicants’ car insurance details for ‘Crash for Cash’ scams.
Whilst the IFB’s latest research into the public’s understanding of insurance scams showed most people understood the seriousness of data theft, it starkly revealed many more people were less aware of the scams often caused by it. Only 18% of respondents were aware of claims farming and 15% had heard of ‘Ghost Brokers’.
Results also revealed one in three people believed insurance scams had little impact on the public. More concerningly for insurers and police, nearly one third of respondents said they wouldn’t know how to report insurance fraud or wouldn’t bother to report it at all.
Andrew, a Data Engineer from Buckinghamshire, suffered the consequences of having his identity stolen and wants to remind people that fraud is not a victimless crime.
“From the moment my identity was stolen, my life changed. The first I knew something was wrong was when I was notified that mobile phone accounts had been set up in my name, shortly followed by department store credit cards. What followed was a string of endless phone calls and attempts to get third parties to talk to each other until I finally got written confirmation that I wouldn’t be liable to pay the costs. But my worries didn’t stop there as my credit rating took a plummet making it difficult to change mobile phone provider or to open a new account.”
“Once fraudsters get hold of your identity they could use it to facilitate any type of fraud, including insurance scams. I would urge people to shred paper correspondence, check social media settings and regularly monitor their credit score and bank balance.”
As part of the collective fight against fraud the IFB, ABI and IFED together with the insurance industry has launched the ‘Stop the Scams’ campaign to raise awareness about common scams as fraudsters evolve their practices and look to target innocent members of the public.
Ben Fletcher, Director at the IFB, said: “It’s concerning that there is a lack of awareness for common scams like Ghost Broking and claims farming, which leave so many victims penniless and bring considerable costs to insurers and consequently honest consumers’ premiums.”
“Covid-19 is sadly giving fraudsters more opportunities so it’s never been more important to raise public awareness about insurance scams and identity theft. We’re campaigning with insurers to help the public spot signs of insurance fraud and report it to the IFB’s Cheatline.”
James Dalton, Director, General Insurance Policy, at the Association of British Insurers, said: “Insurance scammers can be smart, highly organised and can target anyone, so we all need to be constantly on our guard. The insurance industry remains determined to do everything possible to protect innocent customers from being the victims of fraud, which can take the form of being offered non-existent motor insurance cover, or being involved in a staged crash. If you suspect something is wrong, always report your suspicions – to your insurer, the IFB’s confidential cheatline, or the police.”
Edelle Michaels, Detective Chief Inspector for IFED at City of London Police, said: “As long as fraudsters continue to target innocent members of the public, it is vital that people are educated on this type of crime and how to report it if they do become a victim. IFED is engaging with the public in order to increase awareness by employing our Protect Officer to reach out to both companies and communities affected by insurance fraud.
“We hope to quash the unwarranted taboo around reporting fraud, with the aim of eradicating the embarrassment many feel if they have become a victim. Anyone could become a victim of fraud, and no one should feel ashamed if they have.”
“Reporting a crime or an attempt at fraud is easy to do, either through Action Fraud’s online reporting tool or by calling 0300 123 2040. No incident is too small to report, and may just be the missing puzzle piece that helps crack a wider case.”
The IFB, IFED and ABI are working in partnership with insurers, police and industry watchdogs to fight organised insurance fraud, help keep people safe and bring consumer costs down.
Evidence of an insurance scam can be reported to the IFB’s confidential and anonymous Cheatline (powered by Crimestoppers) on 0800 422 0421 or at www.insurancefraudbureau.org/cheatline.