The Insurance Fraud Bureau (IFB) is warning of a rise in people added to the Insurance Fraud Register (IFR) as concerning new findings indicate more people than ever could chance fraud amid the cost-of-living crisis. The IFR, which is managed by IFB, is a national database of insurance fraudsters and anyone on it can be denied essential insurance services for five years.
In the past 12 months (01/07/21 to 30/06/22) 5,058 people were added to the IFR – around 100 people a week. This is up 17% from 4,319 individuals added in the previous 12 months. The rise in IFR cases comes as new YouGov research (commissioned by IFB) reveals one in five young adults would consider turning to fraud if they were struggling financially.
With the cost-of-living crisis placing millions of people in financial turmoil, IFB today launches its Don’t Chance Fraud campaign to highlight why succumbing to the temptations of fraud and landing on the IFR has devastating consequences for all.
Ben Fletcher, Director at the Insurance Fraud Bureau, 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 one of them… it only makes things worse.”
What is the IFR and how do people end up on it?
The IFR is 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 articles (such as emails and phone numbers) linked to the fraud on the IFR.
Amongst individuals on the IFR, the unemployed or those earning a low-income are sadly more likely to have an IFR record. Notably, millennials (26-41 year olds as of 2022) make up half of all cases. The recent rise in IFR cases comes as insurers double down efforts to stop fraudulent activity adding costs to honest customers’ premiums, as so many struggle to make ends meet.
James Burge, head of counter fraud at Allianz Commercial commentted;
“We’ve been detecting more insurance fraud, which always rises in times of financial hardship. These fresh insights from the Insurance Fraud Bureau are therefore more important than ever. We need to buck this trend and its associated cost, which honest customers should not have to bear in the current economic climate.
As a fleet insurer, we’re particularly attentive to staged collisions that target last-mile delivery vehicles. Also, the motor repair industry has reported attempts at passing off counterfeit parts for green parts, so we’re happy to have partnered with a trusted supplier that offers accurate tracking and full transparency. In the commercial property area, empty buildings being used to grow cannabis can lead to problematic claims, so property managers need to protect vacant premises adequately.
At Allianz, our approach will continue to be threefold: inform customers and brokers; cooperate with other insurers; detect and deter fraudsters.”
Top five reasons why someone is added to the IFR
- Submitting fake no-claims-discount (NCD) documentation.
- Fronting – which is when someone puts themselves down as a named driver for a vehicle for which they are actually the owner/main driver.
- Exaggerating damage or injury on what would otherwise be a legitimate claim.
- Claiming for lost items which are later proven to be in possession.
- ‘Crash for Cash’ scams (staged motor collisions).