’It’s vital that local authorities take the current heightened fraud risk seriously,’ says head of claims fraud

Councils are facing an influx of fake pothole damage claims as cost of living pressures drive a rise in fraud, according to public sector insurer Zurich Municipal.

The insurer warned that extreme weather conditions caused an increase in the number of road defects in 2022, ”leaving room for opportunistic fraudsters to falsely claim potholes were responsible for existing damage to their vehicles”.

In a statement released today (9 June 2023), the firm said local authorities saw 81 pothole-related vehicle damage claims in 2022, up from 24 the previous year.

Zurich has now issued a warning to local authorities to be vigilant as the cost of living continues to drive up opportunistic fraud.

Scott Clayton, head of claims fraud at Zurich UK, said: “It’s vital that local authorities take the current heightened fraud risk seriously.

“While the cost of fraud against councils ultimately impacts the public purse, there are also significant social costs, including the funding of organised crime and costs to the judicial system.”

’Heightened risk’

Meanwhile, the insurer detected 571 fraudulent claims made against councils in 2022, worth £16.2m.

This represented an 18% increase on the previous year, with the value of detected frauds increasing by 68%.

While the picture varies around the country, Zurich said there was also a 22% year-on-year increase in casualty frauds, with a 74% increase in the value of frauds identified.

“Despite the heightened risk, Zurich has strong controls in place to detect and investigate fraud,” Clayton added.

“Our 62-person fraud team continues to invest in the very best technology, tools and resources to identify suspect claims and get the best results on our investigations.”