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Insurers take action against fraud

A special police unit entirely paid for by private insurers has been set up in a battle to fight fraud. The new Insurance Fraud Enforcement Department (IFED), which acts on tip-offs from private insurers, was set up by the City of London Police only four weeks ago.

The department is funded by a £9 million donation from the Association of British Insurers. Deals such as these are allowed under the 1996 Police Act, and are becoming increasingly common among Banks, insurers, car firms and credit card companies.

Private industry has suggested that expensive investigations into fraud could otherwise not take place. Guidelines published by the Insurance Fraud Enforcement Department (IFED) show that insurance companies can submit "evidential packages" of alleged fraud by e-mail or phone. These allegations will then be assessed by a senior officer.

The unit, which boasts more than 30 detectives and civilian investigators, made its first arrest only hours after it officially began operations on January 3rd.

High profile investigations in the unit's first month included a Hertfordshire man suspected of making a false insurance claim for a bad back, running into several hundred thousands pounds, and a man from Newport, south Wales, accused of staging a £29,000 burglary at his home.

An IFED spokesman said: ‘Since launching in January IFED has made an immediate impact against insurance fraud and insurance fraudsters, arresting 25 people across England and Wales suspected of offences ranging from major car insurance fraud to bogus individual claims.’

Earlier this month David Cameron praised the courage of people who "turn their back on the security of a regular wage", and look to succeed on their own by starting a company. The prime minister said he believed the UK was "fizzing with business potential."

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