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Bogus holiday sickness claims cost travel sector £50 million a year

1 in 5 adults have been approached to make a compensation claim for holiday illness. - Wednesday, Jun 27, 2018

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1 in 5 adults have been approached to make a compensation claim for holiday illness.

As the holiday season arrives, Horwich Farrelly, a specialist insurance industry law firm, have recently reported that bogus holiday sickness claims are costing the travel sector £50 million per year.

ABTA reported that the number of holiday sickness claims has increased by 500% since 2013. The same report also stated that 1 in 5 adults had been approached whilst on holiday to make compensation claims for holiday sickness.

ABTA supported by destination governments, tourist boards and their members, has launched a “Stop Sickness Scams” campaign and are calling for the urgent closure of a loophole in the law which enables claims management companies and legal firms to make more money in fees from sickness claims abroad, than they are able to from personal injuries in the UK.

 

Claims Management Companies

There is evidence from customers and the travel industry that Claims Management Companies (CMC’s) are contacting people and encouraging them to make a false claim with the suggestion that there is a ‘pot of money’ waiting to be claimed, but not making the customer aware of the consequences.

Contact has come in the form of unsolicited phone calls, text, email, social media etc with some people reporting that they have been approached in airports and hotels.

For the last 10 months Horwich Farrelly has been working with the travel industry to investigate potentially fraudulent claims and as a result it has successfully defended more than 2,000 claims as well as tackling professional enablers including doctors, solicitors and CMC’s that are reported to be behind the increase in claims volumes.

Horwich Farrelly has been urging tour operators to follow the motor insurance industry’s lead by adopting a zero-tolerance approach to tackling bogus or dishonest claims.

Mark Hudson, Head of Counter Fraud at Horwich Farrelly said “Unscrupulous CMC’s are fooling travellers into thinking that they can win back the cost of their holiday, and often more than that, by making bogus claims for holiday sickness. However, make no mistake these companies are in fact helping British tourists commit fraud. “ 

Making a false claim for holiday sickness could result in a fine and or a prison sentence in the UK or abroad, whilst the CMC’s take more in fees than the customer receives.

 

What the FCA have to say

The FCA are so concerned that they have announced a consultation on the future regulation of CMC’S ahead of taking responsibility for regulating their operations on 1st April 2019. It will conclude on 3rd August 2018 and recognises the concern that has been expressed for some time now about the misconduct in the CMC sector.

If you would like to know more or simply want to sit down and discuss your travel insurance why not give us a call on 01494 450 450 or you can send us an email to insure@jbennett.co.uk and we'll get straight back to you. 

 

Sources: ABTA, YouGov Survey, Horwich Farrelly

 

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