New claims portal is not answer to all fraud woes – Carpenters Group

As we begin the slow process of emerging from the misery, and for many, the despair, of the past year, the insurance and wider claims sector is busy preparing for its own new dawn this summer.

After years of debate, campaigning, arguing, delays and to the relief of some, the introduction of a new claims process for road traffic accidents is finally upon us. We all now know the general direction of travel for the claims sector and when it is going to happen. 

There is an expectation of big benefits from digitalisation of the process with improved efficiencies combined with concern that the proposed new process looks very complicated particularly for a litigant in person. 

In time, an equilibrium needs to be found that works best for customers as individual companies figure out the best balance between human support, from actual people, and the digitalised process.  

No new system was ever going to be perfect, and we are all aware that there are number of important areas that will need either tweaking or a more substantive revision in the months or years ahead.

Only time will tell whether it will achieve the anticipated cost savings for the insurance sector and provide proper access to justice for customers. 

It was never going to be the panacea to all the sector’s ills and chief amongst the continuing concerns is fraud. The likely problems have been debated throughout the pandemic by the Fraud Charter group, which If anything has been invigorated by the greater participation that remote meetings allow.

It was gratifying to hear directly from David Parkin of Ministry of Justice at the last meeting that it greatly values the insight, experience, and collaboration from across the sector that this group brings. He is a regular attendee. 

At the last meeting David acknowledged that there will be inevitable consequences of the reforms. Most of us have always known that any major change to a process will also change behaviour by a variety of players in the system.

Some can be predicted; others will be unforeseen. Some will be beneficial, and some most certainly will not. The downside of the reforms, I fear, will be increased fraudulent behaviour. It is inevitable with a frictionless process for starters. 

With the new Official Injury Claims portal (OIC) being opened to all, the prospect of the less savoury side of the claims management industry morphing to take advantage of vulnerable customers and charging exorbitant fees remains very real.

The role of the Financial Conduct Authority (FCA) in overseeing and enforcing poor behaviour from some CMCs (Claims Management Companies) will certainly come under even greater scrutiny to police the system. There was a welcome discussion about this with the FCA at the last meeting. 

Allegations of fraud/fundamental dishonesty are expressly excluded so fall outside the new OIC into the present portal and attract costs. Will contesting fraudulent claims become uneconomic so it’s easier/cheaper to just settle them?  I hope not because this would be good news to fraudsters, who are almost certainly making their plans to take full advantage of this. 

Covid-19 claims, phishing, opportunistic fraud, ghost brokers, spoofing and home working injury claims are all, of course, areas on the industry’s radar as being of concern.

But as it has been for so many years, it is the potential for RTA {Road Traffic Act] fraud that is still uppermost in the minds of those in the sector devoted to fighting fraud. We must do everything we can to make sure that customers, rather than the fraudsters, are the winners from the whiplash reforms.