Rise in insurance fraud linked to cost of living squeeze

The cost of living crisis in the UK has contributed to a dramatic increase in insurance fraud, with a surge of 61% reported, according to the City of London Police’s Insurance Fraud Enforcement Department (IFED).

The data, collected between March 2022 and April 2023, points to a significant uptick in ‘opportunistic fraud’. This includes individuals exaggerating claims or providing false information during insurance applications, rather than professional fraudsters.

In response to the growing issue, the police are urging the public to resist the temptation to inflate claims as they grapple with rising costs and financial strain. IFED figures reveal that motor insurance fraud was the prevalent type of opportunistic fraud during the period, accounting for 51% of cases. Property insurance fraud followed as the second-highest, with a contribution of 29%.

One operation by IFED investigated 18 opportunistic claims, totalling an estimated £216,875. This probe led to numerous search warrants, charges, and arrests across the UK. Individuals involved in various fraudulent activities have been fined, and in some instances, court dates are being set for further legal action.

Insurance Fraud Enforcement Department (IFED) at City of London Police, detective chief inspector Tom Hill said, “We understand that the rising cost of living has presented challenges for many people across the country but turning to crime to make some quick cash is never the answer. Committing insurance fraud can leave you with a criminal record, and have long and serious consequences such as criminal prosecution and a prison sentence. At the very least, it can make it harder to get insurance in the future.”

Association of British Insurers, assistant director, head of fraud and financial crime Mark Allen advised, “Making a fraudulent insurance claim to raise some cash will lead to further financial hardship, with the only thing that you could gain a criminal record. You will find it harder and more expensive to get future insurance and other financial products.”

Insurance Fraud Bureau (IFB), head of intelligence, Investigations and Data Services Jon Radford stated, “When someone is added to our Insurance Fraud Register, they can have their access to essential insurance services denied for five years and this has devastating consequences – from being unable to insure and drive a car, to being refused buildings insurance and ultimately access to a mortgage.”

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