VFM Fraud Index reveals a third of all claims investigated are fraudulent

The last three months of 2012 were the most fraudulent of the year, according to VFM Services.

The quarterly Fraud Index, which compiles data based on the household claims it receives from the insurance industry, reveals that its desktop claims investigators experienced its busiest quarter of the year, and uncovered fraudulent claims which saved the insurance industry a staggering £7.9 million in 2012 alone.

In addition, VFM has introduced a new category into the Fraud Index – multiple items – as conversation management trained investigators are making significant savings by cutting down on exaggeration in claims, particularly in burglary claims, where claims for multiple items are typical .

Steve Jackson, Director at VFM comments: “We always tend to see an increase in fraudulent claims in the lead up to Christmas, as people try to claim for Christmas presents, or for new TVs or furniture, for example, in readiness for hosting the family over the festive period. However, we are also seeing a worrying trend of people claiming for multiple items, often in theft or burglary circumstances and we suspect that people are increasingly ‘adding’ items to a genuine claim in the hope they can get away with it”.

The ‘multiple items’ category contained the most number of claims, with an average claim value of £1,848.99 closely followed by TVs, which had an average claim value of £453.78. The number of TV claims was up by a third (33%) on the previous quarter. Following closely behind was jewellery, with an average claim of £2,179.70, again, an increase of 8 percent on the previous quarter.

VFM uses a combination of psychology, communication skills and conversation management techniques to distinguish between genuine and fraudulent claims.

Of all the claims that were investigated in 2012, a third (33%) were nil settled by the insurer, either because the suspected fraudster walked away after being empathically challenged by VFM claims handlers, or because the claim was repudiated.

Steve Jackson continues: “As an industry, insurers are recognising the benefits of investigating fraud, and dedicating resources to investigating claims, and not just high value claims or what appears to be professional organised fraud. We need to continue sending the message that fraudulent claims made by the opportunistic policyholder is not accepted and not something that people think they can ‘get away with’, as it actually costs the industry millions of pounds, and other genuine policyholders will end up paying for it.”

 VFM Fraud Index

Working with the University of Portsmouth, VFM has received the University’s accreditation for its New ERA training course in Conversation Management. Furthermore, VFM is one of the few specialists who can offer Accredited Counter Fraud Technician (ACFTech) qualifications to its clients.