Travel resumes post-lockdown – but what is the impact on fraudulent holiday sickness claims?

In the years leading up to the Covid-19 pandemic, false sickness claims cost the travel insurance industry tens of millions of pounds, as well as damaged the reputation of British tourists abroad.

A campaign by the Association of British Travel Agents (ABTA), which concluded in 2019, had some success in combating this type of fraud. But, the travel sector has since been heavily impacted by Covid-19, with restrictions leading to many trips being cancelled or cut short - creating further opportunities for fraudsters.

Although insurers confirmed a drop in holiday sickness fraud while travel was banned, they have also noted an increase in cases since the UK began to reopen again, with issues relating to the Covid-19 virus replacing gastric problems as the main source of claims.

Alison Matthew, solicitor at Crawford Legal Services, said: “[There] was a natural dip in fraudulent activity [as a result of the pandemic].

“In addition, a lot of minor fraud was stopped by the travel provider before it reached Crawford Legal Services, most of which was small value claims arising from things such as missed flights. However, we believe an increase in travel fraud as holidays recommence is very likely.

“At Crawford Legal Services, we have not yet seen an increase in holiday sickness fraud following the reopening of travel.

“We anticipate there will eventually be an increase as more holidays go ahead. The lead up to Christmas as well as many redundancies across the country are likely to have an impact, with some people looking to get some money back where they can.

“The claims from summer 2021 holidays may start to come in within the next three months or so.

“There is still a reluctance to travel amongst many people in the UK, mainly due to [the] inconvenience and cost of testing, the risks of the rules changing last minute and detention abroad.”

Covid inconvenience

Matthew added that it is still too early to tell whether fraudulent claims will be centred around Covid-19. The most likely claims to arise will be from people testing positive whilst abroad and being detained in that country for an isolation period, which is likely to be costly and inconvenient, she explained.

However, Rachel Temperton, head of travel and tourism at Allianz Partners UK, said: “Unfortunately customers are testing positive for Covid-19, can’t go on their trip and are contacting us to make a claim for cancellation.

“We’re advising customers that whilst there is scope for a claim, subject to the terms and conditions of the policy they have with us, they must check with their travel agent [or] tour operator to see if they can rebook their trip.

“If they can, then we’re advising our customers that they cannot make an insurance claim and recover the costs of the trip through their travel agent for the same incident.

“This is because travel insurance is there to protect travellers when they don’t receive compensation elsewhere. Customers who reschedule their trip can amend the dates of their travel insurance policy, although an additional premium may be required if there are significant changes, such as the number of travellers or trip length.”

However, Allianz noted that at present the pandemic has not caused a reoccurrence of holiday sickness fraud cases.

Temperton added: “Our travel claims and fraud team work together to identify claims [and] trends that we have genuine concerns on and will take the appropriate action in line with our counter fraud prevention programme.”

Unscrupulous scams

Sickness claims in the travel sector multiplied significantly in 2013, following the capping of legal fees for personal injury claims in the UK.

Following this, claims management companies (CMCs), together with firms of solicitors, then began targeting customers who had taken an overseas all-inclusive package holiday.

Unscrupulous CMCs would contact people about making a claim, either in person while they were away on holiday, via social media, or by a cold call.

Unwitting holidaymakers were often tempted to make a claim. However, many were unaware that they ran the risk of obtaining a criminal record, substantial fine or custodial sentence if they were found to have submitted a false claim.

According to the ABTA, these tactics contributed to a 500% increase in sickness claims between 2013 and 2016 - a time when actual incidents reported by customers in resort either remained stable or declined.

However, following a successful campaign by ABTA, the government introduced a ban on cold calling by CMCs about sickness claims in April 2019.

Mark Tanzer, chief executive of ABTA, said: “Holiday sickness scams cost ABTA members and their suppliers hundreds of millions of pounds and were largely driven by unscrupulous claims management companies looking to levy sky-high legal fees.

“Following intensive lobbying by the industry, led by ABTA, the government put a cap on the amount these companies could charge - with the consequence that they have moved away from this source of revenue.

“In addition, high profile cases of claimants being prosecuted resulting in fines or custodial sentences made members of the public think twice before pursuing a fraudulent claim.”

In February 2021, for example, a family of four fraudsters were sentenced to four months in prison after trying to falsely claim compensation for food poisoning against Jet2holidays.

The four claimed that they had all suffered food poisoning symptoms - including stomach cramps, sickness and diarrhoea - on an all-inclusive holiday in Gran Canaria in November 2016.

The court proceedings were defended by Jet2holidays, which provided evidence of the family enjoying themselves on holiday - despite claiming to be ill.

Images and videos of the family showed them using the water slide, swimming in the pool and drinking in the bar.