More than half (58%) of people are worried about their personal information being stolen by fraudsters, a survey has found.
However, people are often less aware of the scams that can be committed as a result of personal data theft, the Insurance Fraud Bureau (IFB), which released the findings, said.
Just one in six (15%) people surveyed had heard of ghost broking – where fake insurance policies may be sold on social media, often to younger more inexperienced drivers and using details stolen from someone else in order to make the policy appear cheaper.
And only 18% had heard of claims farming, where a fraudster or unscrupulous company may access confidential information to target people, such as road traffic accident victims, and encourage them to take out a claim.
They may even take out a claim without the person’s consent, which is known as “claims vishing”.
The IFB said that during the coronavirus lockdowns it has detected an increase in “financially desperate” firms processing claims for compensation without consent from road traffic victims.
Results also revealed one in three (33%) people believed insurance scams had little impact on the public.
However, scams add to the costs that go into everyone’s insurance policies, as well as the financial losses suffered by victims.
Insurance fraud costs the economy over £3 billion a year, the IFB said.
Nearly one third (30%) of people surveyed would not know how to report insurance fraud or would not bother to report it at all.
In one case highlighted by the IFB, a man from Buckinghamshire suffered the consequences of having his identity stolen.
He said: “From the moment my identity was stolen, my life changed. The first I knew something was wrong was when I was notified that mobile phone accounts had been set up in my name, shortly followed by department store credit cards.
“What followed was a string of endless phone calls and attempts to get third parties to talk to each other until I finally got written confirmation that I wouldn’t be liable to pay the costs. But my worries didn’t stop there as my credit rating took a plummet making it difficult to change mobile phone provider or to open a new account.
“Once fraudsters get hold of your identity they could use it to facilitate any type of fraud, including insurance scams. I would urge people to shred paper correspondence, check social media settings and regularly monitor their credit score and bank balance.”
The IFB, ABI (Association of British Insurers) and IFED (the City of London Police’s Insurance Fraud Enforcement Department) are highlighting the Stop the Scams campaign to raise awareness about common crimes.
Ben Fletcher, director at the IFB, said: “It’s concerning that there is a lack of awareness for common scams like ghost broking and claims farming, which leave so many victims penniless and bring considerable costs to insurers and consequently honest consumers’ premiums.
“Covid-19 is sadly giving fraudsters more opportunities so it’s never been more important to raise public awareness about insurance scams and identity theft. We’re campaigning with insurers to help the public spot signs of insurance fraud and report it to the IFB’s cheatline.”
James Dalton, director, general insurance policy at the ABI, said: “Insurance scammers can be smart, highly organised and can target anyone, so we all need to be constantly on our guard.
“The insurance industry remains determined to do everything possible to protect innocent customers from being the victims of fraud, which can take the form of being offered non-existent motor insurance cover, or being involved in a staged crash.
“If you suspect something is wrong, always report your suspicions – to your insurer, the IFB’s confidential cheatline, or the police.”
Edelle Michaels, Detective Chief Inspector for IFED at City of London Police, said: “Anyone could become a victim of fraud, and no one should feel ashamed if they have.
“Reporting a crime or an attempt at fraud is easy to do, either through Action Fraud’s online reporting tool or by calling 0300 123 2040. No incident is too small to report, and may just be the missing puzzle piece that helps crack a wider case.”
More than 2,100 people were surveyed across the UK for the research.
Evidence of an insurance scam can be reported to the IFB’s confidential and anonymous cheatline on 0800 422 0421 or at insurancefraudbureau.org/cheatline.