At a time when threats from cyber criminals are increasing, the Association of British Insurers (ABI) commissioned research to assess customer awareness and understanding of insurance fraud. Almost one third (31%) of UK adults polled said they had never heard of online insurance fraud, prompting the trade association to launch a new campaign.
To test how many people could tell the difference between a real and fake insurance advert, the ABI also showed participants one of each, with roughly half struggling to assess the validity of either.
Even among those who have heard of online insurance fraud, knowledge of specific types was very low, with the results showing that:
69% were unaware of investment fraud – where a fraudster mirrors the documentation and website of a legitimate provider to trick people into investing in products that do not exist.
78% had not heard of data farming – the use of direct marketing or cold calling to encourage otherwise innocent individuals to make false or exaggerated claims.
81% were unaware of ‘account takeovers’ – where a scammer will take over a policy or claim to either misdirect a premium refund or claim payment.
And 90% had not heard of ‘ghost broking’ – a term used to cover a range of tactics used by scammers to sell fraudulent insurance policies.
Mark Allen, ABI Head of Fraud and Financial Crime, said: “At a time when household budgets are already being squeezed by the cost of living, no one wants to get caught out by the scammers. From deals that look too good to be true, to opportunistic claims companies praying on people when they’re at their most vulnerable, we’re calling on everyone to be alert and don’t fall foul of the fraudsters.”
Ursula Jallow, Director at the Insurance Fraud Bureau (IFB), said: "Online insurance scams are widespread and are becoming increasingly sophisticated, so it's really important to stay cyber savvy and know the difference between a real deal and one that shows signs of something not being quite right.
"This campaign is shining a spotlight on some of the most devastating scams out there, so we encourage everyone to follow ABI’s tips to avoid being targeted. If anyone thinks they have seen an insurance scam they can report it to our confidential CheatLine."
Detective Chief Inspector Tom Hill, from the City of London Police's Insurance Fraud Enforcement Department (IFED), said: "Falling victim to insurance fraud can have a profoundly distressing impact. People who click on spoof adverts under the impression that they'll be directed to their insurer’s website can end up significantly out of pocket. People who buy motor insurance from ghost brokers often don’t know they’ve paid for a policy that isn’t worth the paper it’s been printed on.
"Insurance is a safety net that so many of us use. While IFED works with partners and social media companies to make it more difficult for fraudsters to operate online, by removing the websites and profiles used to target victims, we encourage everyone to learn how to protect themselves against insurance fraud.”
With scammers using the internet to target customers in a variety of ways, the ABI wants to ensure that consumers are equipped with the knowledge and tools to guard against being scammed.
As part of a new campaign, the ABI is looking to raise awareness of types of fraud carried out online and through social media. By using case studies, digital adverts and partnering with influencers it aims to help customers spot the signs of fraud and know how to avoid it.
For more information on the different types of online insurance fraud and how to avoid being targeted, visit the ABI website.
If you suspect you have been a victim of insurance fraud, report your concerns to Action Fraud on 0300 123 2040, or at actionfraud.police.uk.
Or you could contact the Insurance Fraud Bureau via its confidential Cheatline on 0800 422 0421 or at insurancefraudbureau.org
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