Don’t just book it…add a fake claim too

Don’t just book it…add a fake claim too


Jason Peto and Jason Claxton, fraud and insurance experts respectively, 360Globalnet, say it’s time the insurance industry developed a stronger stomach to fight travel claims

Hard-pressed Brits, faced with increased inflation and a falling pound, are finding a creative way to make the holiday payments hurt less, by submitting fraudulent travel claims.

According to TUI, owner of First Choice and Thomson, say they’ve seen 15 times more sickness claims since Spring 2016, on previous years.  While ABTA cites a 500% increase in the number of compensation claims for holiday sickness since 2013.

The finger of suspicion is well-founded as the same is not happening for fellow Europeans, who stay at the same resorts.

But it isn’t just the fraudulent claimant that’s to blame.  Sadly, as we’ve seen previously with personal injury claims, the problem is being exacerbated largely by claims management companies (CMCs) who are helping the phenomenon along nicely, especially those that represent all-inclusive holiday customers, where the issue is most prevalent.

So, instead of meeting the time-share sharks during your annual downtime, today’s menace are the touts that work for the CMCs, encouraging holidaymakers to make a claim.

Sadly, the impact of this will only start to hurt the innocent holidaymaker and some hoteliers are considering banning Brits from their resorts or of not providing all-inclusive deals to our tourist industry. 

Further to this, some Spanish resorts are even fighting back, by recording what people eat and drink, where and in what quantities, so that they can counter a claim, especially to prove that other guests were not blighted with the same sickness bug.

The other huge downside of this growing issue is that, policyholders could start to face prohibitively expensive travel insurance policies, making their annual trip abroad even harder to afford.

In our experience, travel claims have always been ripe for this scenario, as there are many parties that someone can claim from and, historical data on travel claims is not available to insurers, making it hard to spot opportunistic fraudsters abusing the system, over and over.

So, a holidaymaker can potentially make a claim via each or all of the following:

  • The hotel
  • The tour operator
  • ABTA
  • The travel insurer
  • The credit card provider (if they provide your travel insurance)

This means that a family claiming compensation for sickness from the hotel will often lead to the hotel claiming compensation from another party through a legal loophole.

In our view, one way to stop this issue from hurting the industry even more is to take an industry-wide approach, as underwriters on their own cannot stem the might of the CMCs and their appetite for easy revenue.  The fuller force of insurers and other parties, such as ABTA, getting together on this issue, would make them a force to be reckoned with.

A central claims database in the industry would also be the best way to give a good oversight of the culprits – whether CMCs, rogue doctors or fraudulent claimants – showing time and again, what they’ve claimed for, against whom and when. 

In addition, using software that can interrogate unstructured data – so, pdfs, emails, videos and so on – the sorts of document formats that will inevitably be used by say, a doctor to submit a sickness assessment, will be key for insurers to fully appreciate everything that is being submitted to support a claim.  Effectively, it means the fraudulent claimant will have nowhere to hide.

The other critical element is how insurers capture the information from a claim.  Our online platform technology would be the perfect way to ensure the evidence supports the claim, through the claimant uploading imagery – text, video or photos – to include robust evidence such as the fact the claimant sought medical advice/diagnosis and the paperwork to go with this, rather than just sending a picture of their paracetamol!

Sadly, we are all too aware of how aggressive CMCs are in their marketing to potential claimants and, as there are no fixed costs for Solicitors, as there are for motor claims, it is a profitable way for these companies to make money. 

The industry is pushing for fixed fees and it’s easy to understand why.  However, without a ‘unite and fight’ approach, the insurance industry stands to pay out more claims, in support of a compensation culture that’s out of its control.