Rise in numbers being put on insurance fraud register as living costs bite

People with an Insurance Fraud Register record can be refused a wide range of services by UK insurers for up to five years.

25 July 2022

Around 100 people are being added to an insurance fraud register every week amid concerns that more could be tempted into criminality as living costs rise.

The Insurance Fraud Bureau (IFB) said it has seen a 17% increase in people being added to the Insurance Fraud Register (IFR).

The IFR is a national database of insurance fraudsters, accessed by 82% of the UK’s general insurance market. When an insurance application or claim is proven to be fraudulent the insurer can register individuals, businesses and information such as emails and phone numbers linked to the fraud on the IFR.

The IFB, which manages the register, said nearly 23,000 people are on it, and those with an IFR record can be refused a wide range of services by UK insurers for up to five years.

Those on the database could be denied insurance services or will have to pay a significantly higher cost due to the increased risk.

Having an IFR record can affect access to services including business insurance, health cover, home insurance, income protection, life cover, motor insurance, pet cover, savings and retirement schemes, travel insurance and investment funds.

Among individuals, the unemployed or those earning a low income are more likely to have an IFR record, the IFB said. Millennials aged 26 to 41 make up half of cases.

Between the start of July last year and the end of June this year, more than 5,058 people were added to the register, equating to around 100 people per week.

This is a 17% increase compared with 4,319 in the previous 12 months.

The IFB said it had commissioned YouGov research which suggests one in five young adults would consider turning to fraud if they were struggling financially.

Around 21% of 18 to 24-year-olds would be “likely” to provide false or misleading information on an insurance application to save money, if struggling financially.

The figure was one in six (16%) among 25 to 34-year-olds, and 9% across all age groups.

There are various legitimate ways to save on insurance, such as by shopping around or finding a broker through the British Insurance Brokers’ Association.

For general support, the Association of British Insurers (ABI) provides information on what customers might need to consider when taking out insurance.

The IFB has launched a Don’t Chance Fraud campaign to help people understand the impact of turning to fraud and ending up with an IFR record.

Ben Fletcher, director at the IFB, said: “As millions struggle because of the cost-of-living crisis, the sad reality is more people could be tempted to chance insurance fraud and face the serious consequences of having a record on the Insurance Fraud Register.

“There are no winners when it comes to fraud. If someone intentionally lies on an insurance application or claim, they’ll be put on the Insurance Fraud Register which can deny them access to essential insurance services for years to come. They could face criminal prosecution. Plus, the added costs from fraud unfairly make insurance more expensive for everyone else.

“I know it’s easier said than done, but if anyone is struggling to make ends meet then they must seek financial support and look at how they can best manage their finances.

“The insurance industry really wants to help its customers at this challenging time, so please reach out to the insurer if struggling with payments. Whatever the next steps may be, don’t let fraud be part of it… it only makes things worse.”

Zurich UK recently said it had seen an increase in fraudulent insurance claims as cost-of-living pressures mount.

Aviva said it expects to see more claims fraud as people come under financial stress, especially on home, small business and liability insurance policies.

Here are the top five reasons why people end up on the register, according to the IFB:

1. Submitting fake no-claims-discount documentation.
2. Fronting – which is when someone puts themselves down as a named driver for a vehicle for which they are the owner/main driver.
3. Exaggerating damage or injury on what would otherwise be a legitimate claim.
4. Claiming for lost items which are later proven to still be with the owner.
5. Crash for cash scams (staged motor collisions).

For general support, the Association of British Insurers (ABI) provides information on what customers might need to consider when taking out insurance.

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