Despite current ‘trickle’ of home working claims, fraud ‘inevitable’ – Clyde and Co

Fraudulent claims linked to working from home are ”inevitable” and insurance firms should prepare for an influx of claims in this area, warned Jennette Newman, partner at Clyde and Co and president of the Forum of Insurance Lawyers (FOIL).

Speaking during Insurance Times’s first Fraud Charter roundtable of 2021, Newman said: “We are only seeing a trickle of claims [linked to homeworking] - we will be expecting more, but no-one is inundated with these [yet].

“Where they are coming through, they do seem to be more on the genuine side. Whether there is a liability or not, is another matter.

”We are watching that space and that is anticipated. Maybe when people start coming back to the office [or] when government funding starts to go.

”When we look at the financial impact on people, it’s inevitable that there will be an attempt to make fraudulent claims in this area.”

Newman added that Clyde and Co’s healthcare teams were currently seeing more claims compared to its mainstream personal liability teams.

Plus, about a month ago, Clyde and Co filed a request for data on how many claims were related to the Covid-19 pandemic -  this found that there were not very many. She cited around 50 claims, with 40 of these being personal injury claims.

Donna Scully, director at Carpenters Group and Fraud Charter co-chair, noted that she had seen information about emerging homeworking-linked claims on various law firms’ websites. She questioned whether this might attract claims farmers looking to make a bit of money.

Online Harms Bill

Meanwhile, with many people continuing to work from home, staff are spending more time online and could run into problems with spoofing. This is where communications from an unknown source are presented as being from a known, trusted source.

Andy Thornley, head of public affairs at Carpenters Group, which sponsors the Fraud Charter events, said the upcoming Online Harms Bill could provide a solution to spoofing, however ”we are still waiting for that to be published”. 

However, an alternative answer is that ”the Competition and Market Authority (CMA) is setting up a digital markets group to look at how digital service providers – the likes of Google - how they can take more responsibility for the content that they host. I think there’s going to be a renewed focus”.

Thornley deemed this a ”good opportunity” that could be quicker than the Online Harms Bill.

Stephen Dalton, the Insurance Fraud Bureau’s head of intelligence and investigations, echoed this sentiment. He said: “We are following that as well, the CMA is definitely a route worth pursuing.”

Barbara Kubis-Labiak, technical specialist in the claims management companies department at the FCA, added that the regulator relies on intelligence from insurance firms to inform it of any unauthorised activity performed by claims management companies (CMCs).

“We always look at everything and pay attention to every single report,” she said. 

Perception vs reality

Speaking about the Financial Lives survey published by the FCA, Thornley added: “There’s some interesting statistics on the perception of the industry in response to Covid-19.

”[More than] a third (36%) felt insurers did not do enough to help consumers during Covid-19. [More than] a third again (34%) believe that insurers rarely pay out. If we look at that in the context of an economic downturn, there is the potential there for this exaggerated fraud element.”

However, Thornley believes this is only a perception of the industry rather than the reality, as only 4% have not been able to get a refund or suffered a badly handled claim.

“With the business interruption issue, of which [many] consumers have not had any direct impact of the coverage of that, has skewed their perception.

”As a collective organisation, I think we need to draw that together because those perceptions feed into fraud.”