Insurance claims to face lie-detector test

Leading high street insurers are fitting their phone lines with lie detectors to counter an unprecedented number of fraudulent claims.

Firms are resorting to sophisticated MI5-type technology after suffering spiralling losses estimated at between £2 billion and £3 billion last year. This is compared with £650 million five years ago.

One of the worst-hit sectors is the £4.5 billion-a-year motor insurance industry, where false claims now cost insurers tens of millions of pounds.

More than 10 per cent of all claims are now believed to be fraudulent. If it is not halted, every householder and motorist in Britain faces further sharp premium rises to cover the losses.

The first firm to use the sophisticated system is Highway Insurance in Brentwood. It is Britain's eighth-largest insurer.

Other major firms are closely monitoring the scheme and say privately that they will launch their own screening operations.

Highway will switch on its "voice stress analysers" in March, enabling investigators to pinpoint callers not telling the truth.

The hi-tech devices monitor the claimant's vocal pitch and tone during a normal conversation, alerting claims handlers to any unexpected variations caused by lying. Operators are being trained to take callers through an exacting pre-set catalogue of questions designed to expose deceit, and are being told how to recognise near-imperceptible signs of dishonesty.

If a potential fraudster is detected, a prompt appears on the screen enabling the insurer to send in the investigators.

Fraud experts will also analyse written statements for tell-tale signs of dishonesty - and check the suspect's background as part of a range of checks before approaching the claimant.

In a separate development, leading insurers are drawing up a comprehensive "black list" database of suspect claimants.

Britain's £34 billion-a-year insurance industry wants to stamp out anything that might jeopardise profits at a time of intense competition.

Common scams designed to cheat the motor insurance industry include staged road accidents, where fraudsters drive in front of innocent motorists before slamming on their brakes. The ensuing claims for whiplash and other soft-tissue injuries can be difficult to disprove.

Other popular scams involve burning a car and then reporting it stolen, and buying wrecked cars before insuring them and deliberately writing them off in minor collisions. Another illegal claim involves a drink-driver fleeing the scene of an accident and then claiming his or her car was stolen earlier in the day.

Surveys suggest that two in three motorists would make a dishonest insurance claim if they thought they could get away with it.

A spokesman for the Association of British Insurers said: "Fraud is now an enormous problem. The more we detect, the more we realise this is just the tip of the iceberg. We regard it extremely seriously in the industry - but we are getting much better at detecting fraud."

Highway Insurance's decision to use hi-tech screening was inspired by the appointment of a former Serious Fraud Office detective, 44-year-old Kerry Furber.

He said: "Fraudsters view insurers as an easy target because traditional detection methods have failed to identify the true extent of insurance fraud. The combination of new methods and technologies should have a huge impact in reducing fraudulent claims."

A spokesman for the civil liberties campaigner Liberty said the organisation did not object to the screening techniques, as long as callers were aware that the lie detectors were being used.