The City of London Police's Insurance Fraud Enforcement Department (IFED) is raising awareness of the risks associated with opportunistic insurance fraud, after it investigated 18 such claims, which had a total estimated value of £216,875, across the country in February and March 2023.
During this period, officers from IFED executed warrants in Berkshire, Peterborough and Portsmouth and arrested two people, with the Crown Prosecution Service authorising charges against four other people suspected to have made fraudulent claims. Seven interviews were conducted in connection to the investigations and several 'cease and desist’ notices were delivered across the country.
Opportunistic insurance fraud occurs when somebody knowingly submits a false claim or takes advantage of an otherwise legitimate situation to exaggerate a claim for monetary gain. Unlike other forms of fraud investigated by IFED, such as ‘crash for cash’ scams, opportunistic claims are often not pre-meditated and do not involve a high level of planning.
The unit believes that increased cost of living pressures have contributed to an increase in fraudulent claims from otherwise law-abiding citizens as a means to ease financial hardships. In 2022, the number of referrals for opportunistic claims received by the unit increased by 82% from the previous year.
Detective Chief Inspector Tom Hill, from the Insurance Fraud Enforcement Department (IFED) at the City of London Police, said:
“We understand that the rising cost of living has presented challenges for many people across the country – but turning to crime is never the answer.
“Sadly, over the past year, we have seen an uptick in opportunistic claims, from people exploiting legitimate road traffic accidents to submitting bogus claims for high-value jewellery.
“Fraudulent claims drive up the cost of insurance for everyone, meaning that honest policyholders end up paying the price. As well as this, making a false claim could land you with a criminal record. It may seem like a chance worth taking, but the consequences could have a lasting impact on your life.”
A recent investigation by IFED saw a man from Southampton sentenced, after he deliberately deflated a boat and submitted a claim for accidental damage, worth £6,629, to Zurich. Jon Morgan, 41, of Nettle Abbey, pleaded guilty at Winchester Magistrates Court to fraud by false representation. He was handed a 12-month community order at the same court and must also complete 240 hours of unpaid work.
Morgan claimed that the boat deflated on the River Hamble on 3 January 2021, after he steered left to avoid colliding with an oncoming yacht and crashed into another vessel. An assessor from Zurich inspected the boat on 8 March and concluded that the damage was not consistent with that of a collision.
CCTV footage obtained from the storage facility where Morgan stored the boat showed him bringing it into the storage facility, visibly intact, on 7 March and then deliberately damaging it. During his police interview however, Morgan claimed that the footage showed him removing temporary repair tape from the boat to help the assessor view the damage on the following day.
Other fraudulent claimants caught out during this period included:
- A woman from Bedfordshire was charged with fraud by false representation after she allegedly submitted a personal injury claim that falsely stated she was in her car when her neighbour’s vehicle crashed into it. She is due to appear in court in May.
- A man from London pleaded guilty to two charges of fraud by false representation after submitting multiple claims for the same television on two home insurance policies. He is due to be sentenced in May.
- A man from Portsmouth, who officers suspect edited a series of invoices following a genuine claim for water damage on his home insurance, was arrested. It is believed that the man, who stayed in temporary accommodation while repairs to his home were carried out, increased the charges on invoices from various hotels. He has since been released under investigation.
Mark Allen, Head of Fraud and Financial Crime at the Association of British Insurers (ABI), said:
“Insurers recognise that many households are still battling the cost of living crisis and strive to pay legitimate claims as soon as possible. But honest customers rightly expect insurers to clamp down on insurance fraud. If you suspect someone of committing insurance fraud, you can report it to the free, confidential CheatLine run by the Insurance Fraud Bureau at insurancefraudbureau.org/cheatline, or by calling 0800 422 0421.”