An increasing number of Brits are using doctored images and documents to make fraudulent insurance claims, with many of them impossible to detect with the naked eye, This is Money can reveal.
The average insurance fraud was worth £15,000 in 2023, with insurers detecting £1.1 billion of false claims, according to the Association of British Insurers.
Each fraudulent claim raises the cost of insurance for honest households, and one emerging technique is to use digitally altered photographs and documents to try to scam money from insurers.
This can take the form of photographs of cars that are doctored to appear as if they have been in a serious accident, or photographs of home contents that have been altered to appear damaged, according to insurance risk and data firm Verisk.
Some of the photos below, provided to This is Money exclusively by Verisk, show just how convincing these fake images can be.
Spot the difference?: In an example of how convincing fake photos can be, the real photo of the car on the left was edited using AI to have damage marks that could fool an insurer.
Similar techniques are used in insurance documents, including insurance policies and no-claims discounts for car insurance, which are being altered using computers to try to defraud insurers.
This digital deception began to accelerate in 2017, according to Kaye Sydenham, anti-fraud product manager at Verisk.
In the first cases, scammers made false insurance claims using photos they found online.
But digital photo manipulation has only accelerated since then, for several reasons.
One is that technology has improved so that compelling photos and documents can be digitally altered at home, often with free programs and artificial intelligence software.
Another is that the cost of living crisis has left many people poorer and therefore with more incentive to commit fraud.
Bureau of Investigation: Once again, free AI software quickly made the real photo on the left appear to have burn marks from a non-existent fire, enough to surprise an unsuspecting insurer.
But many insurance frauds are carried out not by those struggling financially, but rather by criminals, often with ties to organized crime, who see insurers as easy targets.
This has worsened since the pandemic, when many insurers adopted more remote work patterns and automated claims systems.
Many insurers use automated online systems for low-value claims, and this is an area ripe for deep claim deception, Sydenham said.
Low value claims are often submitted through automated systems. The exact definition of “low value” varies between insurers, but as a general rule it is £2,000 or less.
Removing humans from the system makes it easier for scammers to introduce false claims.
Opinion poll: Could you detect that the damage on the roof in the photo on the right is fake, created entirely by software? The actual photo of the roof is on the left.
The exact number of digitally altered claims is unknown, but Sydenham says one in 10 of the lower-value claims analyzed by Verisk has a red flag for this type of fraud.
Although home and auto insurance suffer the most from image fraud, other areas of insurance are also prone to it.
“Any line of business is open to this,” Sydenham said. ‘It is more common in domestic property and car claims, as they are of lower value. But I think it will be abundant in travel and pet insurance.
‘AI videos could appear, such as fake accident videos with dash cameras. It could be something like whacking a mole, chasing down the scammers and finding out what they might do next.
Verisk has developed smart technology that can help insurers detect this type of digital image manipulation.
This software can detect when images have been modified and usefully highlight any changes.
It also monitors photo metadata – the underlying data that explains how and where a photo was taken.
Verisk can check this metadata for telltale signs that a photo might not be genuine, such as a location that doesn’t match the rest of the claim details.
The software can also perform a similar anti-fraud task with documents, for example by tracking any changes that have been made.
It can even unlock changes that have been made to documents step by step, allowing insurers to determine exactly where the fraud attempt is occurring.
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