There's plenty of scope for dodgy claims, says John Jackson

' During the economic recession of the 1980s, what was politely described as "recession-related" crime became rife. But it was nothing less than straightforward fraud.

More Rolex watches were being claimed for in that period than had ever been produced by its makers. Since then, the fraudulent claimant has found more sophisticated ways of defrauding insurers.

When one hears that Norwich Union has 30 different anti-fraud systems in action one begins to understand the scale of the problem. Terms such as "cognitive interviewing" and "conversation management" are now an everyday part of the insurance lexicon.

Then again, AXA has revealed the startling fact that 35% of calls via its investigation management anti-fraud system have led to reduced claims. But were any of these dodgy claimants prosecuted? Databases are all the rage, too - there is one devoted to targeting motor insurance fraudsters, and even one for listing stolen boats.

New crimes rearing their ugly heads range from cyber fraud to the theft of an individual's identity - plenty of scope here for fraudsters to put in dodgy claims using someone else's personal information.

However, what seems missing from all these anti-fraud measures is any information about prosecutions. I become concerned when I hear anti-fraud systems are forcing policyholders to revise their claims downward, or even withdrawing them.

If someone has put in a claim which is clearly fraudulent, then why are they allowed to get away with it? What is the point of all the high tech systems and databases if fraudsters to not have their collars felt. I have heard it argued that the cost of pursuing many fraudulent claims is greater than the claims themselves. That is a cop-out. The certainty of prosecution is the cure, and every policy should have emblazoned on it in red the words: Warning: We Prosecute Fraudsters.

Insurance fraud is not a high priority with police forces that are financially strapped and thin in numbers on the ground. But the FSA hopes to have a more clear understanding of what information can be shared between insurers later this year.

That is a welcome move. Last year the FSA launched a new fraud policy, urging the industry to do more to improve its defences against financial crime. But why is urging by the FSA necessary? The attack on fraudsters must come from the insurers - not leave the initiative to the regulator.

Zero tolerance of insurance fraud is the only way forward, and it must be imposed across the entire industry. Now. IT