An in-depth report into the household insurance fraud market has revealed that the typical household fraudster is likely to be aged 31-50, a first time claimant and is most likely to submit a claim for under £500 for accidental damage to a computer, TV or mobile phone.
The report, undertaken for Peterborough based insurance fraud claims investigators VFM Services by the University of Portsmouth, analysed almost 40,000 household insurance claims over the past five years in order to provide some insight into the profile of those who may lie to their insurance company, to help clamp down on increasing levels of fraud.
The report is the first of its kind to provide a psychological assessment of an ‘everyday’ fraudster, as previous studies have only examined organised criminals and serial fraudsters. It also dispels some widely held myths of what a fraudster looks like. For example, the study revealed that there was no difference between gender – both males and females were equally likely to defraud their insurance company whereas previous studies found that fraud was thought to be more prevalent in males.
Professor Mark Button, University of Portsmouth fraud expert said: “People who try to commit insurance fraud are highly likely to think a little crime won’t hurt anyone, and are therefore opportunists rather than being serious professional criminals.
“The claims investigated were of relatively low value (50% were less than £500) suggesting people are more likely to commit insurance fraud if they feel they aren’t asking for enormous amounts and who see such crimes as only a ‘little dishonest’.”
This is also why, the researchers think, the majority of claims were for accidental damage (82%), as the claimant doesn’t need to obtain a police report, unlike a claim for theft where the fraudster could face potential consequences such as perverting the course of justice, or wasting police time.
Sally Griffiths, Director at VFM Services confirmed: “The findings in the report corroborate our experience from many years of investigating insurance claims. Rather than organised crime, we know that the majority of fraudsters are opportunists either looking to bolster a genuine claim by exaggerating what was stolen or lost, or those who think they can simply get away with claiming for the odd TV or carpet.”
In other findings, the report revealed that fraudulent claims peak from August to September, which the researchers say is linked to the school holidays, perhaps with the motivation to pay for their summer holiday. Likewise, fraudulent TV claims peak around October when the nights begin to start drawing in, and the weather deteriorates, tying in with the time of year when TV viewing figures increase.
Just over 50% of claimants had submitted a claim within one year of buying the policy with just over 30% within six months. Therefore claims made within a year of the policy being taken out could be at higher risk for fraud.
There appear to be few ‘serial claimants’ with nine out of ten fraudsters having only made one previous claim or less, and just under three quarters of dishonest claimants had never made a claim before. This further supports the theory that most fraudulent claims are opportunistic.
Sally Griffiths concluded: “We know that opportunistic fraud is a huge problem for the industry, evidenced by the number of fraudulent claims that VFM uncovers every year. The industry should warn opportunists that it is cracking down on those who think that what they are doing isn’t really illegal, or doing any harm to anyone. Fraud is not a victimless crime.”