Insurance industry warns of fraud

28 July 2011 Last updated at 04:13 GMT The insurance industry says bogus claims are costing ?2bn a year Bogus insurance claims in the UK rose almost 10% in 2010 from 2009 to an average ?18m every week, according to the Association of British Insurers.

Investigators uncovered 133,000 fraudulent claims, with about 66,000 of these related to home insurance.

Motor fraud was the next most common, with 40,000 cases uncovered.

"Fraudsters continually look for new ways to con insurers, so we are upping our game," said Glen Marr director of the Insurance Fraud Bureau.

Examples uncovered included:

A claim for back injuries while working in a nightclub was rejected when Facebook images showed the claimant performing gymnastics;A claim for face injuries said to have resulted from a falling toilet roll holder in a fast food outlet was rejected when it was shown that the equipment would have had to have fallen upwards to cause the injury;A claim by a woman for the loss of a ?2,000 watch after a night out was rejected when the photograph she provided of her allegedly wearing the watch turned out to be that of a friend;A claim for injury said to be caused by falling over a wall was rejected when it was proved that there was no wall at the scene of the alleged incident.

The ABI estimates that insurance fraud costs ?2bn a year, adding, on average, an extra ?44 a year to the bill for every UK policyholder.

Crackdown

Over the last five years both the number and overall value of such frauds detected had risen by over 100%, the ABI said.

Nick Starling, the ABI's director of general insurance and health, said that tougher surveillance measures were being introduced to tackle bogus claims.

"Early next year we will be setting up a national Insurance Fraud Register, which will contain details of all known insurance cheats."

He also highlighted the launch of a national police unit to investigate such fraud.

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JP Morgan in second fraud payout

8 July 2011 Last updated at 07:38 GMT Criminal fraud charges have been brought against 18 former employees of the bank JP Morgan Chase is to pay $228m (?143m) to settle claims it rigged auctions, its second fraud payout in a month.

The deal was reached with regulators, tax authorities and 25 US states, who accused it of fixing bids for state and municipal contracts on 93 occasions.

It comes after the bank agreed a $154m payout to settle charges of misleading buyers of its mortgage investments.

The bank had agreed to co-operate with the US Justice Department, and blamed former employees for the offences.

The department has brought criminal charges against 18 of the bank's former executives - of whom nine have pleaded guilty.

But the bank itself had only faced civil charges after it agreed to co-operate.

The US lender was accused of paying to have a sneak preview of rival bids to win contracts to invest cash on behalf of local and state governments, including those of California, Texas and New Jersey.

"JP Morgan and its former executives deprived municipalities of the competitive process to which they were entitled," said Assistant Attorney General Christine Varney.

For its own part, JP Morgan said it was "pleased to have resolved this matter with its regulators".

It said that the municipal derivatives trading desk of its investment bank, which was responsible for the violations, was shut down in September 2008.

It comes after Bank of America and Switzerland's UBS also separately settled similar charges against them in the US, for $137m and $160m respectively.

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China arrests 36 in Alibaba fraud

1 July 2011 Last updated at 06:47 GMT Alibaba's reputation took a hit as a result of the online fraud on its e-commerce website Chinese police have arrested 36 people connected with operating an online fraud on Alibaba.com and other websites, the company has said.

Those arrested stand accused of duping overseas buyers of more than $6m (?3.7m) by posing as suppliers on the Chinese e-commerce websites.

The fraud resulted in the chief executive and chief operating officer of Alibaba quitting earlier this year.

Alibaba is China's largest e-commerce group.

"The arrest of the suspects hits online scammers hard," said Alibaba.com boss Jonathan Lu.

The company said the arrests were made following a 40-day investigation earlier this year.

Reduced complaints

Alibaba said it had introduced strict procedures in an attempt to prevent a repeat of such cases.

As a result, the number of fraud complaints received monthly by the website declined by 70% between February and June, Alibaba officials said.

The company said it would keep up its efforts to ensure the safety of its consumers.

"We will continue to co-operate with defrauded buyers and police to pursue the investigation, arrest and sentencing of those who commit crimes using our platform," said Linda Kozlowski of Alibaba.com.

"If scammers think they can hide on the internet and that no-one will go after them, they are wrong," she added.

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