As Ireland’s recession forces most people to adjust to their changed circumstances, a growing trend in insurance fraud indicates that some are finding other ways to ‘supplement’ their lifestyles. With the country’s top bankers getting to keep their million euro bonus many may feel that they too are entitled to their piece of the action.
Although it is often assumed that people commit fraud for personal gain, the reality can be more complex. Maintaining personal reputation or the avoidance of loss can be strong motivators. As people lose their jobs, the pressure to commit fraud to maintain a lifestyle beyond their reduced means increases.
The Irish Insurance Federation (IIF), the representative body for insurance companies in Ireland, is continuing its effort against insurance fraud. Michael Horan, Non-Life Manager in the IIF believes “there is definitely an increase in claims in the recession”. The number of calls to Insurance Confidential, a hotline run by the IIF where people can anonymously report suspected cases of insurance fraud, had more than doubled in 2009. There were almost 700 new cases of suspected insurance fraud reported to the Insurance Confidential hotline in 2009 – up from approximately 300 in 2008. And as the recession continues, the risk of fraud will increase.
The insurance industry really began to focus on fraud prevention and detection about ten years ago. One of the main ways insurers work together in this respect is through Insurance Link, a database used to identify repeat claimants. Nick Starling of the ABI in the UK, adds: ’Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder-to-obtain insurance and credit and the possibility of a criminal record’ .
With the introduction of the most draconian budget in years, more people are likely to find themselves in precarious financial situations. It remains to be seen whether the steps currently being taken to tackle insurance fraud will be enough to deter people from seeing it as an easy way out.
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