Gadgets fuelling insurance fiddles

People pretending their mobile phones or laptops have been stolen or lost in order to upgrade to the latest technology are pushing up insurance premiums, insurer Direct Line has warned.

A survey by the insurance company found that more than one in 20 people in the UK admit to making fraudulent claims for a personal technology item such as a mobile phone, camera or laptop so they can get a new model.

People in every age group admit they have attempted an insurance fiddle at some point in their life, but those most likely to swindle an insurance company are single people aged between 16 and 24 years old.

The survey claims that as many as one in seven in this age group has admitted to researchers that they have made a fraudulent claim in order to get the latest gadget.

It seems that Scots are the most honest, with only one per cent owning up to an insurance fiddle, while the highest number admitting to using fraud to upgrade devices live in East Anglia.

Direct Line told vnunet.com that because of such rapid advances in technology, people are more likely to make fraudulent claims to keep up with their friends and colleagues.

But the result is that insurance premiums for everyone will continue to rise.

"The trouble is people see making these claims as a 'victimless crime', but this fraud is costing the insurance industry around £50m to £100m a year," said a spokeswoman for Direct Line.

"This means people's insurance premiums go up by around £15 per year to cover these losses and the problem is getting worse. And we are seeing far more multiple claims from people."

See also:

Insurers to drop hacking premiums

Prices predicted to drop as insurance firms gain better understanding of market  02 Apr 2004

Put technology into perspective

Modern technology should not be blamed for the way people choose to misuse it  30 Sep 2003

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