Customers told to keep quiet about medical conditions for easy sale

Unscrupulous brokers are feeding healthcare fraud in the UK, an expert has warned insurers. Speaking at the annual conference in Brighton of the Health Insurance Counter Fraud Group, Perfect Health chairman Andrew Tripp said customers were increasingly misled when buying private medical insurance (PMI).

He added that former independent financial advisers (IFA) and mortgage brokers suffering in the credit crunch were turning their hands to the PMI market and mis-selling policies.

Tripp, an executive committee member of the Association of Medical Insurance Intermediaries (AMII), said: “There are a lot of unprofessional, poorly trained people out there selling in the market and not giving proper and accurate advice to your customers.”

The complicated menu-based PMI application forms had boosted opportunities for brokers to deceive insurers and customers in a bid to boost commission, he added.

“There is a tremendous opportunity for a sales person or a broker to get a quotation for an insurer, sell it as a fully comprehensive plan and, underneath the mirage of all these opportunities, mis-sell products.”

Common fraudulent tactics included ticking a reduced cost six-week option on application forms while falsely selling it as a fully comprehensive plan, and selling products through individual sales instead of group plans to increase commission.

Some customers also were persuaded not to disclose certain medical conditions to ensure an easy sale.

Tripp said electronic application forms and a list of benefits beside each quotation would reduce fraud. Insurers also should be wary of people clubbing together to form bogus businesses to benefit from cheaper premiums.

He revealed the AMII was working with the CII to develop a professional qualification for all association members from 2010 onwards.

FBI supervisory special agent Larry Guerin told delegates that healthcare fraud in the US was now estimated to cost an annual £130bn. It was perpetuated by bogus internet pharmacies, organised gangs staging accidents and home help agencies billing for unnecessary care.

He added that ambulance fraud schemes, which provided unnecessary travel for mobile patients, and infusion fraud, where HIV patients were given non-essential or non-rendered drug infusions, were also ramping up costs.