Overall fraud figures for 2013 were actually down, but cases of insurance fraud rose by nearly 40% from 2012 figures. This represented the third consecutive year of fraudulent activity in insurance applications, and means that 17 in every 10,000 applications was fraudulent, compared to 12 cases in every 10,000 in 2012. The increase of 39.7% led to a source for credit rating agency Experian saying that although companies, and the industry in general, were getting better at identifying and combating fraud, there was still much that could be done to help beat insurance fraud altogether.
Insurance fraud offences can vary, but the majority are of people making fraudulent claims against existing insurance policies. Whiplash claims have been a common source of media coverage, with the UK being hailed as the whiplash capital of the world and many groups trying to identify ways to quell the number of inaccurate and fraudulent insurance claims. Insurance fraud may also include applications for insurance policies using inaccurate or fraudulent data.
The numbers released by Experian are a measure of the number of detected frauds, and while this could mean that more incidents are being instigated on an annual basis, it also means that a larger percentage of incidents are being discovered. The most likely scenario is a combination of the two, so while fraudulent activity is on the increase, so is the industry’s ability to capture those that commit the crimes.
The director of identity and fraud at Experian, Nick Mothershaw, said that the “financial services industry continues to make headway in the fight against fraud” but he went on to say that everybody should continue to be vigilant in order to help combat the problem and further reduce the number of instances of fraud.
Fraud continues to be a major problem, and the continued and increased use of the Internet for activities like banking and shopping means that it is only likely to continue to increase. However, the same advance in technology that has led to an increase in fraud is also helping to capture perpetrators of fraud.