Hostile foreign powers “could flood OIC with fraudulent claims”

OIC: Monitoring needed

“Potentially hostile foreign powers” could identify weaknesses in the Official Injury Claim (OIC) portal and flood it with “fraudulent claims”, a report has warned.

The Association of Consumer Support Organisations (ACSO) also called for the relaunched Joint Fraud Taskforce (JFT) to issue charters covering the legal and insurance sectors.

The report, Fraud in the legal services sector, said data from the OIC for the three months from April to June this year showed that the number of claims going through the portal had fallen more than envisaged, indicating “low public awareness”.

Fraud or dishonesty allegations led to 11% of represented claims and 8% of unrepresented claims exiting the portal, although allegations of fraud had declined since the first quarter.

“The basis on which claims are suspected as fraudulent is not clear, so it is incumbent on the MoJ [Ministry of Justice] to give some insight as to why this is, so that the industry can work together to combat it”.

ACSO said the OIC portal required monitoring “to ensure it is not being manipulated” by fraudsters.

“National security concerns have also led to fears of potentially hostile foreign powers identifying weaknesses, in turn flooding the portal with fraudulent claims.”

The report said the JFT, relaunched by then home secretary Priti Patel in October 2021 to tackle the rise of fraud and cybercrime during the pandemic, introduced charters for three: accountancy, retail banking and telecommunications.

While the Law Society and Association of British Insurers (ABI) were members of the JFT, “there is no specific insurance charter or legal charter”.

Researchers said: “Such charters should have a place in the JFT’s plans given the impact the legal and insurance industries have on the economy, not to mention the vast number of consumers directly affected by these industries.”

If legal and insurance firms were more involved in groups such as the JFT, they would be “better placed to identify areas of improvement, develop strategies to better work together to combat fraud and address areas where fraud is rife”.

With combined data aggregated and independently verified, “everyone should benefit for the shared insights”.

ACSO put itself forward to facilitate cross-industry fraud discussions, given its connections across the insurance and legal sectors.

Among the report’s recommendations were raising awareness of fraud among consumers, improved education at school for children and better data sharing across sectors.

Consumer support organisations should improve training for their staff, introduce fraud policies understood by staff, report instances of fraud more often and improve their customer due diligence.

Matthew Maxwell Scott, executive director of ACSO, last week urged that the Insurance Fraud Taskforce, whose 2016 report led to several significant changes in legal and insurance practice, to be revived, a call reinforced in the report.

He added: “In light of the increased fraud risks posed to consumers, insurers and the claims industry from the economic crisis, there is no better time to bring the industry together and agree a set of actions that all sides can work with.”

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