The softly, softly approach is not good enough - prosecution is the only answer, says John Jackson

The growth of technology as an aid to preventing fraud is a sign of the increasing dishonesty of the public, who are encouraged to think they can get away with it because of the lack of resolve among insurers to prosecute.

"Most of our policyholders are honest" is becoming a tedious mantra in the industry. That is undoubtedly true, but the growing use of sophisticated anti-fraud systems such as the Digilog and NCORP detection systems, show the situation is getting out of hand.

In the Insurance Times claims supplement last month, Brownsword chief executive David Brownsword, whose company is pioneering Digilog, and Bill Trueman, who is piloting claims investigation system Absolute, each made a startling statement.

Brownsword said insurers using Digilog saw the number of fraud-related repudiations jump from around 1% to more than 20% of all claims screened. Trueman said that around 30% of the claims Absolute examined were potentially fraudulent or deceptive.

An HBOS three-month Digilog pilot saw 30% of claims subjected to further review, while in another study 40% of reviewed claims were either withdrawn, repudiated of subjected to detailed inquiry - 12% of all claims screened.

A recent Direct Line survey revealed that one claim in 20 for a lost or stolen technology item such as a mobile phone was fraudulent. The younger generation, the survey showed, were particularly prone to putting in fraudulent claims for cameras, Walkmans and mobile phones.

The ABI estimates that fraudulent claims for motor and household policies cost its members around £1bn a year. We are talking big numbers here. The insurers using these systems are major players with high volume books of business, motor and household.

What is interesting in the plethora of stories about this new anti-fraud technology, but virtual total silence on the number and nature of any prosecutions.

If fraudsters know their biggest fear is having their claim rejected, they will keep trying it on. It is not good enough that so many fraudsters are allowed to merely withdraw their claim.

The decision of South Yorkshire police to offer an amnesty for people admitting to falsely reporting mobile phone thefts is shameful and sends completely the wrong message to the perpetrators.

In many department stores there is a notice: shoplifters will be prosecuted. Claims forms should have a similar notice: fraudulent claims will be prosecuted.

There is only one ultimate deterrent - the certainty of prosecution and the virtual certainty of conviction and a criminal record. Insurers should ruthlessly prosecute and see that the convictions are widely publicised. zero tolerance is the answer to the fraudsters.