You would expect insurers and police officers to work together to help reduce fraud. But Christine Seib says they are on different planets
Insurance fraud is a crime. So when a loss adjuster or assessor has strong evidence that a claim is fraudulent, they should work with the police, with the hope that the insurance company will be able to repudiate the claim and the fraudster charged with a criminal offence. Then both police and the insurance industry are winners.
Unfortunately, that is not the way it works. Despite a 1988 exchange-of-information agreement between the Association of British Insurers (ABI) and the Association of Chief Police Officers (ACPO), exchange of fraud information is rare. Loss adjusters and assessors are frustrated and the police, according to the insurance industry, are suspicious.
Even in the midst of an attempt by the ABI and ACPO to come up with a new agreement on information exchange, which ABI anti-fraud manager Debra Weekes says will be available in mid-May, there appears to be little goodwill between the two parties.
Weekes is positive that the new agreement will improve matters. She says the agreement includes an information request form that insurers and their agents will be able to submit to police and that this will iron out the difficulties in information exchange. She says the ACPO committee dealing with the form is about to sign it off and, minus a few last minute meetings, it will be put in place.
The Data Protection Act (DPA) allows police to release information to insurers and their agents. Under s29 (3) of the Act information can be released to facilitate the prevention and detection of crime and to apprehend or prosecute offenders. This is commonly known as the "enabling" section of the Act.
The Act has another enabling facility, which is the use of the insured's consent to obtain information.
Weekes says the new agreement relies on those two enabling sections. "It's about a better practical arrangement; those key principles of the Data Protection Act won't change," she says.
ACPO's press office denies any knowledge of the agreement. Insurance Times phoned ACPO countless times over the space of a month, but ACPO's press officers say they could not find a single officer who would acknowledge they had heard of the agreement being worked on with the ABI, let alone comment on it. Maybe this is evidence of what insurers have had to deal with in the past. Needless to say Weekes was gobsmacked when informed of the ACPO response to Insurance Times' inquiries.
Further evidence of police confusion comes from a recent code of practice on data protection. ACPO's draft data protection code of practice recently submitted to the Information Commissioner contains no mention of release of information to insurers. And a spokesman for the commissioner says consultation on the draft code is almost complete. So there is little hope for inclusion.
Industry insiders say the police aren't interested in fraud against insurance companies. Former police officer Philip Swift is a director of Claims Management & Adjusting.
He specialises in motor claims and, given his experience, has a keen nose for fraud. Swift occasionally comes across an officer who is keen to share information and together they negate claims and make arrests. However, most of the time Swift is rebuffed, despite his use of the Act.
"One officer said `I've had that one pulled on me before' when I referred to the ACPO and ABI acceptance criteria and guidelines for the reporting of suspected fraudulent insurance claims to the police," he says.
"They denied there was any such agreement in place.
"My company handles more than 500 claims each month and, on average, contacts the police on ten occasions; we don't engage in fishing expeditions, we contact the police if the circumstances of the case are suspicious and give us natural cause for concern."
The official line from loss adjusters is not so damning. Paul Drury, a council member of the Chartered Institute of Loss Adjusters (Cila), says there are successful collaborations between the two. At present the Arson Control Bureau is working with the ABI, Cila and the fire brigade to counter arson fraud.
He says the relationship between police and the insurance industry is "fairly good", but acknowledges that it can change from police force to police force and even individual to individual, based on personal relations between the adjuster or assessor and the officer.
So why aren't police officers interested? One theory is that the police are overwhelmed with muggings, burglaries and violent crime and have little time to tackle fraud.
Police officers accept that fraud is not high on the agenda. One officer says: "We're trying to target our resources to priority areas like violent and sex offences, so we're giving less and less response to property offences, particularly commercial property and fraud."
He has plenty of time for insurers' agents, but says there is a lack of understanding of the enabling sections of the Act.
"I think they [the police] feel they're moving into an area they shouldn't be involved in and are defensive because they're worried about overstepping the mark," he said.
"Most officers have a fairly moderate understanding of the DPA. They can't get into trouble for failing to disclose information, whereas they can for disclosing something they shouldn't. So they err on the side of caution. It's probably a cultural thing - they don't want a complaint."
A police data protection officer, who also declined to be named, says the forces within her jurisdiction received a lot of inquiries from insurance agents, but did not keep records of their responses. She says the original 1988 police-insurer agreement is worryingly out of date.
"It hasn't kept pace with the environment of personal injury, compensation and the prevalence of fraudulent activity," she says.
"Police need to recognise how prevalent and determined this is; they consider this a white-collar crime with no victim, but it's still a criminal offence.
The case of the burnt-out car
Claims Management & Adjusting's (CMA) Philip Swift provides an example of how the Data Protection Act (DPA) can be used successfully by insurers' agents.
The insured reported his car stolen when his wife took it to visit a friend. The insured said he spent the evening with another friend. Both the husband and wife said they were indoors all evening with their respective friends, who provided statements to support this claim.
The car's burnt out shell was found soon after it was reported stolen.
The police received a tip-off that the claim was fraudulent, and that the insured had been to a hospital casualty department on the evening of the theft.
The hospital said it could not give the police confidential patient information, citing the DPA. As a result, the police inquiry was concluded.
CMA became involved and, strictly in accordance with the Act, obtained information from the hospital that the insured was treated for petrol burns to his hands, arms and neck that evening.
CMA forwarded the results of its investigation to the police and the insured was arrested. He admitted the offence and received a caution, enabling the insurer to repudiate the claim.
No action was taken against his wife and friends, who all provided misleading accounts to the insurer. Why a caution was administered to the insured, without the agreement of the insurers, for a conspiracy to obtain more than £3,500 by deception has yet to be determined.
"The reduction of resources - manpower and financial - means it needs to be self-financing. We couldn't maintain that level of input without reimbursement from insurers," she says.
"The whole area needs to be reviewed, with a national stance established. One force will charge you £80 for information, another £50 and another nothing at all because they won't give you anything.
"They can't get to grips with how to decide what you can and can't disclose. So some err on the side of caution and won't disclose anything," she says.