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Lifestyle Services Group Fighting Fraud Head On - A Case Study
Why did we do it?
In 2005, insurance fraud rose dramatically and it was estimated that of the 420,000 handsets reported lost or stolen, as many as 40% were false claims made by customers simply wanting the latest phone.
What did we do?
To combat this worrying trend, Lifestyle Services Group established an internal Fraud Investigation Service to help proactively identify and prevent fraudulent activity within the mobile phone insurance sector. Lifestyle Services Group is currently the only mobile phone insurance administrator to offer this service and actively pursue criminal prosecution for false claims.
The team does this by:
Proactively examining risks which affect Lifestyle Services Group and client revenue streams
Preventing/containing issues which may be a risk to our reputation
Compiling evidential packages for criminal investigations for all cases of discovered fraud
Seeking to recover restitution by civil means from those who defraud Lifestyle Services Group and their business partners. As this forms part of our in-house end-to-end service, any costs recovered are shared entirely between Lifestyle Services Group and business partners
What has it achieved?
Since the team's introduction they have:
Mitigated unnecessary losses to our clients and Lifestyle Services Group, saving £2.5 million on identified and prevented fraudulent claims
Avoided and unnecessary increase in premiums due to fraudulent claim activity
Prevented further criminal activity through the identification of three fraud rings. This has resulted in over 200 successful convictions within a 12 month period
Recovered 73% of all costs incurred by the business following the submission of fraudulent insurance claims to the Police
Worked with the wider market to trace and reduce criminal activity
The team’s fantastic work has also been recognised after they were shortlisted and went on to be named as the Fraud Investigation Team of the year at the Insurance Fraud Awards 2010. This was for work carried out on a high profile case in 2009 after they identified a pattern of fraudulent activity taking place in the Birmingham area. Working closely with West Midlands Police, they put together a case which lead to the charging and conviction of a gentleman who was involved in fraudulent offenses totalling £74,000.