Insurance Fraud Increases As The Recession Hits Hard
The recession has hit people hard and forced them to re-adjust how we live our lives. Our changing lives mean that for many they have to drop their standard of living. People are certainly finding it hard to come around to this new mindset. This is giving rise to a wave of insurance fraud cases. They wish to keep their standard of living by defrauding insurance companies and driving up the price of your policy. These people look at the bankers getting away with daylight robbery and they want their own slice of the pie.
Most people think that it is only the poorer people in society that get up in insurance fraud. While this is often true there are large numbers of well off families embroiled in these illegal activities too. They wish to maintain a standard of living that they can no longer afford and in order not to ‘lose face’ with the neighbours they turn to insurance fraud to sort out their finance problems.
The IIF (Irish Insurance Federation) represents insurance companies in Ireland. They are battling this new surge in insurance fraud. According to Michael Horan the non Life Manager in IIF “there is definitely an increase in claims in the recession”. In 2009, the number of confidential phone calls that the Insurance Confidential Hotline received tipping them off to bogus claims had increased by more than 50%. Again in 2009 there were 700 new cases of insurance fraud reported. This compares with roughly 300 new cases in 2008. You can clearly see that there is something wrong here. Fraud increases as the recession hits harder.
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 says ‘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’.
The chances of you and your family falling into financial difficulty has multiplied over the last few years. With tougher budgets to come things are likely to get worse. To many, insurance fraud will be the only solution to maintaining a lavish lifestyle. The insurance companies are aware of this situation and are battling back. Insurance fraud hurts everyone and insurance companies do not want these levels rising.
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