Consumers making fraudulent sickness claims on their travel insurance are driving prices up for other holidaymakers and putting themselves at risk of jail time.
The Association of British Travel Agents (ABTA) says fake claims are costing the travel industry tens of millions of pounds every year – something which is driving up costs for genuine holidaymakers.
The group says the number of claims for holiday sickness has risen by 500% since 2013 - despite the fact sickness levels in resorts have remained stable in this period. This dramatic rise in claims has only affected UK holidaymakers and not those from other countries.
ABTA says the rise is thanks to claims management companies (CMCs) encouraging people to file bogus claims. In some instances, the firm assures consumers there is no risk involved with making a fake claim.
However, the trade body says this is not the case, and being caught making a fraudulent claim could result in a three year prison sentence.
ABTA compares this increase to the surge in fraudulent whiplash claims made on car insurance policies. It wants the government to change the law to make claiming less attractive for CMCs by limiting the amount of fees they can charge consumers.
In the meantime, the trade body is urging consumers to report any CMCs that encourage fraudulent claims to Action Fraud on 0300 123 2040.
‘It is against the law and is pushing up holiday prices’
A 2016 survey of holidaymakers by YouGov for law firm BLM found that 46% of people thought it was acceptable to make an insurance claim for food poisoning, even if they were unsure about the cause of their illness.
It says this had led to many “speculative claims” being made against operators and hotels.
Sarah Hill, partner and head of fraud at law firm BLM, says: “It is not exaggerating to call this situation an epidemic. CMCs have identified this as fertile ground and there is a deep pool of potential claimants up for grabs.
“There needs to be some level of consumer education, as almost half of those surveyed think this practice is acceptable. In reality, it is against the law and is pushing up holiday prices.”
Mark Tanzer, ABTA chief executive, adds: “The government must urgently address this issue. The legal loophole that is allowing firms to unduly profit from these claims must be closed. This would allow people with genuine claims access to justice but make this area less attractive to claims firms.
“Holidaymakers need to know that whatever a claims firm might say, fake claims are fraud. Holidaymakers pursuing fake or exaggerated claims risk ending up in jail either in the UK or abroad.”