Insurance fraud linked to ID theft has almost doubled in a year causing misery for victims and pushing up premiums for millions, it has been revealed.

The Insurance Fraud Bureau (IFB) has identified a 97 percent rise in organised insurance fraud involving stolen identities in the past year.

Fraudsters can attempt to impersonate someone with just a few stolen details such as a name, date of birth or home address.

These can be used for most types of financial crime including insurance, banking and credit.

The victims find they are pursued by third parties looking to recover costs of financial arrangements made in their name, which can impact their credit score making it difficult to get loans, credit cards or even mortgages for years to come.

The IFB said there is rising evidence that Ghost brokers are stealing the IDs of drivers who are cheaper to insure to set up policies. These are then doctored to sell on to others at higher prices.

Misrepresented motor insurance policies are also used by fraudsters to facilitate dangerous ‘Crash for Cash’ scams, where accidents are staged to make claims, and to insure vehicles linked to serious crime.

In one investigation, the City of London Police’s Insurance Fraud Enforcement Department (IFED) and the IFB suspected that a gang had impersonated over 200 people – from personal to commercial policyholders.

The scam involved making bogus claims in their names and diverting funds to third parties, or pretend victims who had caused collisions to fraudulently obtain compensation.

In another investigation with Hertfordshire Police, it was found that hundreds of identities had been stolen by a gang who took out fraudulent motor insurance policies to steal brand new cars from dealerships via finance deals.

IFB Director, Ursula Jallow, said: “We’ve seen a worrying rise in insurance fraud made possible by identity theft.

“Stolen personal information can be used for every financial crime imaginable, and victims of impersonation who are often elderly or vulnerable, face devastating consequences.

“We urge everyone to be cautious when sharing personal details and to spread the word to their friends and family.

“If anyone thinks their information has been used in an insurance scam, they should report it to our confidential CheatLine.”

Cifas, a not-for-profit organisation which protects public, private and voluntary sectors from fraud, says identity fraud dominates the National Fraud Database (NFD) making up 64 percent of all cases.

Concerningly, their records show most victims of impersonation are now over 61 years old.

The organisation believes that the cost-of-living crisis has resulted in this age group being more susceptible to enticing offers to ‘sell’ their identity.

Stephen Dalton, Director of Intelligence at Cifas, said: “Identity fraud continues to be a favoured tactic for many criminals when exploiting innocent people to steal their identities and use personal details to fraudulently open and abuse financial products and services.

“It’s therefore vital that individuals protect their information by never divulging financial details or credentials that could be used against them.”

Simple measures can help to protect personal information:

• Create strong unique passwords for personal accounts.

• Avoid publicly sharing personal details on social media.

• Only make purchases through legitimate retailers’ websites and be wary of any person or organisation asking to use your bank details.

• Protect personal devices by installing the latest software and app updates, and where possible opt to use two-factor authentication.

• Avoid phishing attempts which encourage you to click on links and open files.

If anyone thinks their identity has been compromised for an insurance scam, this can be reported to the IFB’s confidential CheatLine here or via its phoneline (powered by CrimeStoppers) on 0800 422 0421.

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