After the bubble burst in the Irish economy and after a succession of harsh budgets people have been forced into adjusting their sometimes lavish lifestyles. We have all had to cut back a little. Actually, there are still a number of people who refuse to quit their lavish way of life and will turn to crime to supplement their living. Insurance fraud is an area they tend to get caught up in. People see the rich bankers being let off the hook with golden parachute deals after messing up the country and they want their slice of the cake.
When you think of fraud you would think that it is done to combat poverty. People who earn little are trying to con money to make a living. The reality is often quite the opposite. Pride can be just as bad a cause of fraud. People cannot stand the drop in their standard of living and they want to maintain their reputations among the neighbours. They have lived lifestyles that they cannot now afford. Instead of accepting their new circumstances they turn to fraud to supplement their old lavish lifestyles.
The Irish Insurance Federation is a representative body for insurance companies. They have identified the growing trend of insurance fraud and are battling hard to stop it. Michael Horan from the IIF states “there is definitely an increase in claims in the recession”. Internal statistics show that the number of tip-offs to insurance fraud claims via a confidential phone line have increased by over 50% in the year 2009 when compared to 2008. These figures clearly highlight that there is something wrong. Numbers do not surge like this without a reason. The reason in this case is the recession. If the recession deepens then the insurance fraud levels are also likely to increase.
The Irish Insurance Federation put a strong focus on detecting and preventing fraud over 10 years ago. Part of this plan of action involved the creation of a database of high risk claimants. Their details were stored on a database which could be checked by insurance companies. Nick Starling of the ABI says ‘Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder-to-obtain insurance and credit and the possibility of a criminal record’.
Over the last year we have seen the introduction of savage cuts in the budget. This is highly likely to cause monetary problems for many families. Insurance fraud will be seen as one way out of a debt spiral. With the new insurance fraud detection measures that are in place it has hoped that this will deter these fraudsters in the future.
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