Surge in insurance fraud hitting courts reaches, finds KPMG

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The number of fraud cases reaching courts in the UK rose by 78% last year, as insurance scams increased in value despite a fall in case number, according to KPMG.

The firm’s Fraud Barometer, which records cases of alleged fraud with a value of more than £100,000, found that 453 cases with a total value of £1.2 billion came to court across the UK last year.

Of these, £17 million of alleged insurance fraud appeared in UK courts over 19 cases in 2018, compared to 24 cases with a combined values of £11.9 million in the preceding four years of 2014 to 2017.

Cash for crash, personal injury scams and faked death claims featured multiple times in the list of frauds coming to court, according to KPMG.

One case saw a man who masterminded a £4 million bogus insurance claim scam jailed for nine years. The scam saw the man orchestrating 250 collisions with innocent drivers, mainly on mini-roundabouts, making claims against dozens of insurance companies for fabricated injuries or vehicle damage. The judge was clear in stating that all insurance customers will pay for the fraud through higher premiums.

Fraudsters will continue to come up with new and improved ways to scam the system

James Maycock, partner at KPMG Forensic

“Insurance fraud has a massive impact on many people: the victims, insurance companies and of course everyone else who is left to pick up the cost through higher insurance premiums,” said James Maycock, partner at KPMG Forensic.

“Despite the progress that has been made, particularly with the number of people now using in-car technology to record events in real time, fraudsters will continue to come up with new and improved ways to scam the system.”

Maycock continued: “Insurance scams are no longer the domain of claiming for a ‘lost’ camera on holiday, but like many areas of fraud have turned into a very lucrative income stream for professional criminals. The increase in professional insurance scammers coming to court goes to show the complexity of the task that the industry is tackling. Fraudsters will move quickly to new methods and exploit any area they can, staying ahead of them is a difficult challenge.”

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Mark Dugdale is the editor of Claims Media. Mark welcomes articles, letters or feedback from readers and can be reached via mark.dugdale@barkerbrooks.co.uk