A ban on cold calling by claims management firms is a further step in the fight against fictitious holiday sickness claims.
The campaign to stop fraudulent food poisoning claims by British holidaymakers continues to gain momentum after new rules were introduced on nuisance calls.
The new Financial Guidance and Claims Act means firms that make unsolicited calls touting for personal injury or PPI business will first need the recipient’s consent. Failure to do so risks a fine up to £500,000.
A 500% rise in holiday sickness cases between 2013 and 2016 has been blamed on claims management companies (CMCs) encouraging holidaymakers to submit exaggerated or false sickness reports.
The problem cost Mallorcan hoteliers an estimated £42million in one year alone, even though the number of illness reports in resorts stayed the same.
Big drop in claims
There have been recent signs that the travel industry is winning the battle against the fraudsters, amid reports in Spain of a big drop in claims.
The turnaround follows high-profile court cases in which holidaymakers have been found guilty of making fraudulent claims and fined thousands of pounds, given community service orders or sent to prison.
There’s also been a concerted effort to tackle misconduct in the claims management industry. Its government-backed regulator said holiday sickness cases were now back to levels seen in 2015, with the number of CMCs operating in this area down to 140 in January from 225 the previous summer.
An audit by the regulator involving CMCs that handle holiday sickness cases resulted in warnings being issued to seven firms, while another eight surrendered their authorisation either before or after the checks.
In one case, the regulator listened to recordings of marketing calls in which sales agents told clients that they will be entitled to £2,500 if they say they had been ill and that they didn’t need any evidence of their illness.
A fixed costs regime for solicitors that handle sickness cases has also helped control the problem, while the Solicitors Regulation Authority has reminded its members about the need for proper due diligence checks.