Insurers to use lie-detectors

LEADING High Street insurers are fitting their phone lines with lie detectors to counter an unprecedented number of fraudulent claims. Firms are resorting to MI5-type technology after suffering spiralling losses estimated at between £2bn and £3bn last year. This compares with £650m five years ago.

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

More than 10% of all claims are now believed to be fraudulent. Every householder and motorist in Britain could face sharp premium rises to cover the losses. The first firm to use the system is Highway Insurance in Brentwood, Essex. It is Britain's eighth-largest insurer. Other firms are monitoring the scheme and are planning to launch their own screening operations.

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 hi-tech devices monitor the claimant's vocal pitch and tone, alerting claims handlers to any unexpected variations caused by lying. Operators are being trained to take callers through an exacting series of questions designed to expose deceit. If a potential fraudster is detected, a prompt appears on the screen.

Fraud experts will also analyse written statements for 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 'blacklist' database of suspect claimants. Common scams include staged road accidents where fraudsters drive in front of innocent motorists before slamming on their brakes. The claims for whiplash and other soft-tissue injuries can be difficult to disprove.

Other tactics involve burning a car and then reporting it stolen, and buying wrecked cars before insuring them and deliberately writing them off. 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.

A spokesman for the Association of British Insurers said: 'Fraud is an enormous problem. The more we detect, the more we realise this is just the tip of the iceberg. But we are getting much better at detecting fraud.'

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