Report reveals 54% rise in false insurance claims

False insurance claims and identity fraud is on the rise according to a report by fraud prevention service the Credit Industry Fraud Avoidance System (Cifas).

The report, FRAUDSCAPE - Depicting the UK's fraud landscape, revealed a significant increase in false insurance claims and identity fraud as recorded by its members.

In 2009 there was a 54% increase in the number of false insurance claims to 670 cases compared to 2008 whilst identity fraud rose by 74% from 601 cases in 2008 to 1046 cases in 2009.

According to the report, total fraud rose by nearly 10% compared with the year before to just over 235,000 cases in 2009. There was a 32% in identity fraud overall with three quarters of the 102,000 identity fraud cases recorded in 2009 being perpetrated online.

The research, conducted amongst Cifas' 265 members, points to the economic conditions as the main contributory factor in individuals making false insurance claims.

Scott Bowers, head of the counter fraud unit at insurance law firm Browne Jacobson, commented: "The web and other technological developments have opened up a raft of opportunities for fraudsters such as phishing, ID theft and skimming."

He continued: "As this report suggests the levels are worryingly high for some areas of activity. Organisations need to be more alert than ever to the fraud threat and need to make greater investments in data analytical tools to identify suspicious activity."