The Foreign Office has issued a warning to holidaymakers visiting Spain about claims management companies (CMCs) encouraging them to make false compensation claims that they fell ill while abroad.
It is the latest move in a growing backlash against what is seen as a “surge” in such claims.
The Foreign Office’s advice to travellers to Spain was last week amended to warn that “there have been reports of an increase in holidaymakers being encouraged to submit a claim for personal injury if they have experienced gastric illness during their stay”.
It continued: “You can find more information about the action you can take if you have suffered a personal injury on the Citizens Advice website. You should only consider pursuing a complaint or claim if you have genuinely suffered from injury or illness; if you make a false or fraudulent claim, you may face legal proceedings in the UK or Spain.”
In February we reported that the Claims Management Regulator (CMR) had begun investigating relationships between CMCs and solicitors over holiday sickness claims in the wake of the Association of British Travel Agents claiming that CMCs have moved onto these cases as more lucrative sources of work than whiplash.
In its quarterly enforcement update, published on Friday, the CMR said it had held discussions with tour operators, Spanish hotel representatives and the Spanish police regarding the “surge” in holiday sickness claims in Spain, and was sharing intelligence with the Solicitors Regulation Authority.
It also provided information to the Foreign Office for its alert.
Defendant law firm BLM, which has been campaigning on this issue, describes holiday sickness claims as an “epidemic”.
The CMR update also highlighted some major fines it has handed out, most notably £553,000 to Manchester-based financial products CMC Help Your Claim Ltd for rule breaches relating to high-pressure sales tactics, misleading statements and failure to suppress consumer contact details upon request.
In its efforts to combat nuisance calls and texts, it fined Bolton-based personal injury CMC Zebra Claims Ltd £68,000 for rule breaches relating to due diligence and record keeping, and Stevenson Drake Ltd of Northwich, Cheshire £10,000 for making unsolicited personal injury marketing calls.
Further, the CMR assisted Kent police and the Insurance Fraud Bureau in securing the conviction earlier this month of Rameo Mohammed, previously known as Mohammed Sangak, a ‘crash for cash’ fraudster who staged accidents in and around Kent.
He was sentenced to two years’ imprisonment for conspiracy to defraud after his gang was found to be involved in more than 315 personal injury claims.
Mohammed was also handed an eight-year prison sentence for his involvement in human trafficking. In what was described as “an extreme attempt to validate his claims fraud with insurers”, he used the identities of those he smuggled into the country to fuel the fraudulent activity.
The investigation also showed that the claims were being managed through an organisation set up specifically by Mohammed to facilitate the fraud. Through this company, additional fees were being added on top of the claim pay-outs he was receiving.