Insurance company fraud: how to spot a dodgy company

Have you ever wondered how a law firm got your number and knew you’d had an accident? Would you be happy to know your insurance firm has given your details to a third party? The payment of referral fees between insurance companies, lawyers and claims management companies was outlawed in 2013. But it seems that in some cases details are still being shared.

The problem

There’s big money in compensation claims. And some claims management companies and law firms have shown they’re prepared to bend the rules to get these valuable leads. Bribes are offered to insurance company employees in exchange for contact details of customers who might have a case.

The City of London Insurance Fraud Enforcement Department (IFED) takes a stern view of this. Calling it “corrosive” they’re determined to stop these bribes for insurance customer data.

Who is taking the bribes?

DCI Andrew Fyfe, the head of the IFED, believes it is tempting for insurance company employees to share customer details in exchange for cash or other perks. He has been quoted telling Insurance Times that:

“Junior employees, who are not well paid might be tempted by the money offered by claims management employees who approach them, whether it be socially or through connections.

These youngsters might not think they are doing any harm, they might just think they are giving a friend some information.”

The penalties

Under the Bribery Act 2010, it’s not just individuals who can face fines and prison for accepting bribes. Directors and Board members can also be held liable if it is shown that not enough was done to prevent it.

In an attempt to end the illegal sharing of information, the IFED is looking to use these strict laws. It means the responsibility for preventing bribery is placed at every level of the business. It will also allow the Department to go after any company that does not do enough to stop it.

The new General Data Protection Regulation

In May this year, the General Data Protection Regulation (GDPR) comes into force. It will oversee what information can be held and how it must be stored. This will include details that are collected online to protect the privacy of individuals even more.

insurance company fraud handshakeSpotting insurance company fraud

This isn’t quite so simple as we’re all only human. Anyone working for any company could be tempted to accept a bribe in return for your data. But, you can help to protect yourself by using reputable insurance companies in the UK, which can demonstrate that they have good procedures in place.

For example, Prudential run a confidential reporting hotline to make it easier for employees to report suspicious behaviour. The company has clearly set out an anti-bribery and corruption policy making it clear that it is completely forbidden.  Many other insurance companies, including AG, Virgin Money, Hiscox, and Nationwide, also have robust systems in place to stop corruption.

You can also check a full list of authorised insurance brokers by searching the Financial Services Register or the British Insurance Broker’s Association.

Price comparison websites

You also need to think about other ways your contact details could be passed on. Consumers have reported receiving nuisance calls about claims after using price comparison websites. The lesson we can learn from that is maybe it’s not such a good idea to give your mobile number to a price comparison website if you state that you’ve had an accident on your quote form.

For insurance you can trust

Park Insurance is a family-run business with 30 years experience helping our customers. Our team of brokers won’t pass your details on to anyone else. But they will find you the best value insurance that meets all your needs. Whether you’re looking for business or personal insurance, we build bespoke packages at a price that suits you too. Call us for a chat on 0117 955 6835 or get in touch for a free quote.