AA calls for action on injury claim fraud

  • Two-thirds cold-called by claim firms in 12 months
  • One in ten see no problem in claiming even if they weren’t injured
  • ‘Task force’ needed to clean up ‘compensation culture’
  • More funding for police ‘fraud busters’ called for by AA

AA Insurance has called for the Ministry of Justice to investigate a sharp increase in the number of whiplash injury compensation claims prompted by cold-call tactics on behalf of no-win no-fee claims firms.

New research from AA Insurance shows that nearly two-thirds (63%) of motorists have been cold-called by firms trying to persuade them to make an injury claim, even if they haven’t been injured.  And more than a third of them (36%) say they have been called more than ten times in a year by such firms, according to an AA-Populus poll which attracted more than 20,000 responses.

But an alarming 11% say that making a claim for compensation, even if no injury is suffered, is justified.

Nevertheless, 95% of respondents considered the calls ‘to be a nuisance’ and want the Government to ‘take steps to ban such cold calls’.

AA Insurance has written to the Rt Hon. Chris Grayling MP highlighting these findings.

Stephen Gaywood, the AA’s insurance counter-fraud director, says that Ministry of Justice reforms aimed at cutting the number of spurious and fraudulent injury claims were supposed to prevent claims firms from cold-calling.

But he says that the rules have effectively been circumvented by ‘marketing companies’ acting on behalf of claims management firms.

“The number of injury claims being made is higher than before the reforms were introduced. They’ve risen from around 66,000 per month in March 2014 to more than 71,000 now.  The rules are being openly flouted.  These firms are getting hold of customer data from somewhere and it’s not from insurers.  I have no doubt that their pushy tactics lead many people to make claims that they otherwise wouldn’t even consider.  It’s time a task force was formed to investigate and clean up this shady and immoral practice.”

The AA’s letter to the Justice Minister is urging the Government to act and Mr Gaywood says he hopes that further reforms to curb insurance fraud will form part of the election manifesto of all parties.

Mr Gaywood says that the money an individual might gain by claiming compensation that ‘they’re entitled to’ (as these firms put it), is the tip of a huge cash iceberg because these firms and the lawyers they represent are making almost as much for themselves as the cash they obtain for claimants.

“It’s damaging the industry’s reputation and it’s inflating premiums,” he says, pointing out that insurance fraud adds around £90 to every household’s insurance bills.

Recent figures from Aviva show that road traffic accidents have fallen by 30% over recent years, yet injury claims have increased by 62%.

Government should expand the police insurance fraud squad.

AA is also calling for the Police department responsible for insurance fraud-busting to be expanded.

The Insurance Fraud Enforcement Department (IFED) recently achieved its 1,000th arrest for insurance fraud, underlining its effectiveness since being formed just four years ago.

The insurance industry has increased its funding of IFED.  But Mr Gaywood believes that now is the time for Government to show additional commitment to tackling insurance fraud by contributing to expansion of the department. 

“Greater investment in tacking fraud won’t just keep premiums in check; it will leave more money in customers’ pockets and ultimately help boost the country’s economy.  It’s win-win.”

 

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