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Fake insurance claim exposed by fraudster’s own blunders

25-09-2018

A traveller’s cunning plan to make a quick buck by filing a fake insurance claim has been caught out thanks to some really stupid mistakes in the claim.

The traveller lodged a claim with his insurer, 1Cover Travel Insurance, for a brand-new camera, worth $6,300, that he claimed had been stolen while he was on a holiday in Fiji, and provided all necessary documents, including proof of purchase of the stolen Canon DSLR.

But while the receipt seemed authentic, what exposed the traveller for the insurance fraudster he was were glaring errors in the bogus claim, including the word “taxable” which had been spelt “tacable”. The word “basement” in the store’s address was spelt “basemant”, and “approved” had only one “p”, news.com.au reported.

“This example is just one of the many instances of dishonest people trying to cheat insurers and their more trustworthy customers,” said Natalie Ball, of Comparetravelinsurance.com.au. “The average fraudster isn’t photoshopping receipts for items never purchased for holidays that never happened, though — it’s more often exaggerating the value of stolen luggage, claiming items against both a stand-alone and credit card policy, or misrepresenting misplaced items as stolen.”

Richard Warburton, the chief operating officer of 1Cover Travel Insurance, said bending the truth, or outright lying, to an insurance company “isn’t a victimless crime” and could have some serious consequences.

“While some people like to convince themselves that this is a victimless crime — a big insurer won’t miss $800, right? — it’s important to understand that the insurer reserves the right to go to the police, which can lead to charges,” Warburton told the news agency. “In the digital world that we live in, fraud detection has become more sophisticated and information can be validated regardless of where you’ve been travelling.”

But sniffing out fake claims doesn’t come cheap. According to the Insurance Fraud Bureau of Australia, insurance fraud, including travel insurance, costs honest policyholders up to $2.2bn each year.

“Even when fraudsters are caught, any staff time or resources used to process or investigate fake claims costs travel insurers and their customers money,” Ball said.

Insurance fraud also had a negative impact on what protection insurers are willing to provide customers – and this is reflected in insurers’ reluctance to cover mobile phones.

“Many travellers think that they can take an old iPhone with a broken screen on holidays, claim for it, and then simply upgrade to the latest model,” Ball said. “As a result, we are increasingly seeing insurers reduce or remove coverage for cracked screens altogether.”

Written by Mina Martin for Insurance Business Magazine

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