What were they thinking? SCTI opens the lid on fake claims

Monday , 7 March 2016 by Aimee Bourke

Travellers tempted to try and cash in on their travel insurance policies may find themselves talking to the police instead of their insurer.

SCTI investigate about 1,500 people a year who are trying to make fake claims. As well as internal claims assessors, SCTI utilises the services of specialist fraud investigators.

“Travel insurance is for when something unexpectedly goes wrong and a traveller needs legitimate help,” says Southern Cross Travel Insurance (SCTI) CEO Craig Morrison. “The majority of our customers make genuine claims and have nothing to fear – the only ones who have to be concerned are those who fabricate their claims.”

Most aren’t aware of the consequence either. For starters, you certainly won’t get any of your claim paid, but you can also be blacklisted from your insurer, taken to court, gain a criminal record, find yourself on a database with other fraudsters and become uninsurable (a problem if you ever want a mortgage or to travel overseas again).

“We receive up to 1,300 claims a week and see all kinds of attempts to manipulate the system,” says Morrison. “Everything from implausible accounts of theft and unlikely items added to a genuine claim, to completely fabricated claims, including false testimony and fabricated documents.”

Despite a lot of people thinking it’s a victimless crime, everyone who buys travel insurance suffers when fraud occurs as the cost of paying claims is shared by all customers through higher premiums, says Morrison.

“While technology has made it easier for people to falsify reports, investigators and claims assessors are specifically trained to analyse and detect fraud. Faster computers means more real time analysis of claims…before the money is out the door.”

And Morrison says distance won’t save you from scrutiny.

“I find it amazing that people think they’re going to outsmart someone who investigates shady claims as a full-time job. It’s relatively easy to unpick the lies some people tell – even if the documentation is purportedly from another country.

Insurance Council NZ figures estimate that insurance fraud in New Zealand sits between $150 - $450 million per year.

What were they thinking?

  • One customer claimed to have lost $6,000 in jewellery from their handbag. When SCTI sent a private investigator to follow up on the claim, they asked to see the handbag. Inside it was the missing jewellery.
  • A customer claimed their vehicle boot had been broken into while they relaxed in a park. Items stolen included a laptop, sunglasses, clothing and money. They also advised they had since had the car boot repaired. Private investigators contacted the company who supposedly completed the repair but found no record of the vehicle being worked on.
  • A customer reported having $36,000 worth of designer shoes and bags, jewellery, SLR cameras and Apple laptops stolen from their hotel room. They provided a document from the hotel manager confirming the theft. That manager, however, confirmed that the letter was forged.
  • A family reported to have two iPads, SLR camera equipment, clothing and luggage worth $13,000 stolen by a taxi driver. They provided a letter from their hotel manager and a police report, but both documents were found to be fabricated.
  • A traveller reported having their bag stolen, which contained an Apple laptop. When asked for proof of ownership, he admitted to having bought the laptop from a “shady” friend who couldn’t prove that they owned it either. Failure to provide a receipt or proof of ownership resulted in the claim being declined.