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Fraudulent insurance claims top £1 billion

Fraudulent insurance claims top £1 billion Fraudulent insurance claims top £1 billion per year in the UK alone.   Last week, a new body was set up to fight this.

The Insurance Fraud Register, officially launched on Friday 14th September, will contain details of policyholder's who have been found to lodge bogus or exaggerated claims.

This comes only nine months after the Insurance Fraud Enforcement Department (IFED) was launched.  The IFED are a specialist police unit dedicated to tackling insurance fraud.  

According to a report published by the Association of British Insurers (ABI) more than 2,500 fraudulent claims are discovered by insurers every week.  These claims are worth some £19 million, while fraud now adds an extra £50 a year to the annual insurance bill of every UK policyholder.

The number of fraudulent claims rose significantly last year.  Cases uncovered included a staged traffic accident, where all 30 passengers on a hired coach claimed for whiplash, and an injury case where a policyholder cut his thumb at his local gym but claimed for a more serious injury using photographs he'd downloaded from the internet.

One family who made more than 100 claims for storm damage to their property was sentenced to 15 months in prison.

False motor claims are the most expensive to the industry.  On the 18th July 2012 the BBC reported a motor insurance hoax after a customer didn't replace his handset properly after speaking on the phone with his insurer - you can hear the telephone conversation here.
ABI Director General Otto Thoresen said, "The industry makes no apologies for its zero tolerance approach to insurance fraud.  Honest customers are sick of footing the bill for insurance cheats, through higher insurance premiums."

"From the highly organised 'crash for cash' motor scams to the opportunistic exaggeration of a genuine claim, insurers are determined to do what it takes to protect honest customers."

For some more examples of attempted insurance fraud check out the IFB's cheatline outcomes here.

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