Both financially vulnerable customers and organised criminals are behind the increase, says the firm

Cases of fraudulent claims are rising as the cost of living crisis continues to crunch, new data from national law firm Weightmans has revealed today (13 January 2023).

According to Weightmans’ survey – conducted among 29 Insurance Fraud Investigators Group (IFIG) members on 30 November 2022 – more than half of respondents have seen a significantly higher number of fraudulent insurance claims compared to previous years.

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The majority (97%) expected this volume to further increase as the cost of living crisis deepens, which jumped to a 40-year high in September last year.

Areas where industry professionals identified the most significant increases in fraud were:

  • Credit hire (60%) – such as the fabrication of invoices supposedly for hiring a replacement vehicle.
  • Bent metal (45%) – such as purchasing an already damaged vehicle to claim it was involved in an accident.
  • Home claims (35%) – such as falsely claiming a high value item that had been damaged or stolen.

Two thirds of those surveyed also stated they are seeing more complex fraudulent claims being made than previously.

‘Breeding ground’

Weightmans head of fraud Mike Brown said that the firm is “seeing a pandemic of fraud in the current climate, with the cost of living crisis and imminent recession acting as a breeding ground for fraudulent claims from financially vulnerable members of the public, as well as organised fraudsters”.

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He added: “According to Office for National Statistics (ONS) data, all types of crime, including burglary, theft and knife crime, have fallen against March 2022 levels, with the exception of fraud – which is up by 4%.

“Not only has fraud increased as a crime type, ONS further reports that, as an offence, it is the most commonly experienced crime in England and Wales today – it accounts for approximately 41% of all crime against individuals and I believe that trend is only set to be exacerbated by the current economic turmoil people are experiencing, causing significant harm to the businesses and individuals targeted.”

The Office for National Statistics (ONS) released these statistics in October 2022.

As a result, IFIG chair Ami Fromson said that “it’s essential that sector professionals across all different disciplines come together to tackle the increased fraud risks the industry is facing”.

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