Travel industry suffering from an epidemic of fraudulent claims, says BLM

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The travel industry is suffering from an epidemic of fraudulent claims according to BLM.

The firm has found that almost half of people would consider making a claim for food poisoning even if they weren’t sure their illness was the fault of the hotel, a belief that it says has helped create a thriving fraud culture.

The travel industry has been hit by a dramatic rise in gastric illness compensation claims, with rogue claims management companies (CMCs) urging holiday makers to put in speculative claims against operators and hotels. BLM commissioned YouGov to survey 2,000 GB consumers on their attitudes to sickness claims on all-inclusive holidays, after the law firm saw claims against its in travel customers soar over the past 12 months.

Sarah Hill, partner and head of fraud at BLM said: “It is not exaggerating to call this situation an epidemic. CMCs have identified this as fertile ground and there is a deep pool of potential claimants up for grabs. There needs to be some level of consumer education, as almost half of those surveyed think this practice is acceptable. In reality, it is against the law and is pushing up holiday prices.”

CMCs are proactively chasing potential targets for fraudulent claims, often using social media to trawl for potential claimants. However, direct engagement is also taking place through phone calls and approaches abroad. BLM also found that 5% of people have received an unsolicited call about making a claim against a holiday company, and 5% of all-inclusive holiday goers have been approached to make a claim during a holiday.

The CMCs are also targeting those that are likely to be more vulnerable to committing fraud, with 15% of all-inclusive holiday goers with two or more children in the household having been approached while abroad on an all-inclusive package holiday – some with the potential to pay for next year’s holiday on offer.

Hill added: “Payouts typically range between £500 and £2,000, and many people are seeing this as a quick and easy way to make some money, with CMCs assuring their targets that they are entitled to make these claims.

“The industry needs to come together with government to develop a solution to this issue. It needs addressing in the same way whiplash claims were, with regulation that drives rogue CMCs out of the market. If left unchecked, this could threaten the future of the travel industry.”

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk