While identity theft is a key driver in policy fraud, there may also be instances of opportunistic fraud in hotspot areas, with people using false details to reduce insurance costs, such as by submitting a false no claims discount (NCD) or not disclosing a full driving history.

A YouGov survey (commissioned by the IFB in 2024) found that nearly one in five people (17%) would find it acceptable to lie on an insurance application to help save money. An issue potentially linked to financial hardship.

To help protect people from making a costly mistake, the IFB has been reminding the public through its ongoing Fraud Cons campaign, that what might seem like a small lie to save on the cost of insurance is still fraud. This could lead to a record on the Insurance Fraud Register (IFR), making it harder to get insurance for years to come, and a potential criminal charge.

Being truthful from the start is the safest way to stay protected.

Mark Allen, Head of Fraud and Financial Crime at the ABI, said:

“Amidst an increase in identity theft – which is often aided by the use of generative AI – it’s essential that consumers remain vigilant to protect their personal information from policy fraudsters. The IFB’s findings underscore the evolving nature of this crime and its impact on victims when false insurance policies are taken out or fraudulent claims are made using their details.

“At the same time, it’s vital that customers are honest and accurate when applying for their own insurance. Even small misrepresentations or omissions in an application can constitute policy fraud, leading to potentially serious legal and financial consequences. By protecting yourself from fraudsters and ensuring your own actions are above board, you can help maintain a fair and secure insurance market for all.”

Detective Chief Inspector Nik Jethwa, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:

“Policy fraud is a growing threat that often flies under the radar, but its impact is anything but invisible. Whether it’s criminals using stolen identities to take out fake insurance policies or individuals deliberately misrepresenting their details to cut costs, the consequences can be serious and far-reaching.

“Fraudulent policies don’t just distort the insurance market -they’re often used to enable wider criminal activity, from ghost broking to crash for cash scams. That’s why we’re working closely with the Insurance Fraud Bureau and industry partners to identify hotspot areas and disrupt these networks.

“We urge the public to stay alert. If something doesn’t feel right whether it’s a suspicious policy offer or signs your personal details have been misused - report it to Action Fraud. A few minutes of caution could prevent months of financial loss and emotional distress.”

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