The British Consul General Lloyd Milen and the Vice-Consul, Lucy Gorman, yesterday held talks with the president of the Majorca Hoteliers Federation, Inma Benito, about the problem of holiday insurance fraud. They looked at ways in which the British authorities could possibly assist in cracking down on a growing practice which is costing local hoteliers tens of millions of euros per year.
Claims management companies (CMCs) or so-called claims' farmers, which have opened up a huge market for people wishing to make claims, are under the spotlight in the UK, and a capping of the legal fees they can charge has curtailed it.
However, a legal loophole means overseas cases are excluded from this "fixed-cost regime", meaning these CMCs have been targeting package holidays - particularly all-inclusives - with holiday sickness claims. Data from members of Abta, the association of British travel agents, has shown a dramatic rise in the number of gastric illness claims made since 2013, while sickness levels reported in-resort have remained stable.
Gastric illness claims now represent nine out of ten personal injury complaints received by members: a figure that stood at around 60% in 2013.
The federation would like the UK government to help in cracking down on the epidemic of claims, which are encouraged by tactics such as cold-calling and social media posts.
A 2013 survey by UK comparison website Gocompare.com found that seven per cent of 18-to-34-year-old UK holidaymakers admitted to exaggerating a claim on their travel insurance policy or to making up the claim in its entirety. In the UK insurance industry as a whole, in 2015 insurers uncovered 350 cases of fraud worth £3.6 million every day.
Abta has urged Britons to be careful of an insurance scam in Spain. Cowboy firms operating in the key resorts, not only in Majorca but across the country, are encouraging holidaymakers to make falsified claims about holiday sickness in order to win payouts from tour operators or hotels.
Abta says: "Many of these claims are supported by very little evidence and do not match up with recorded sickness levels in holiday resorts. We believe this is being driven by the aggressive marketing practices of some claims management companies, touting their services to UK holidaymakers either in destinations or when they are back in the UK."
The issue is one for the UK Ministry of Justice which has said that there will be legal reforms to tackle the problem. Under new legislation, fixed rates will be established and there will be a need for proper medical evidence. Failure to provide this will result in no compensation being paid.
But any legal reforms are not expected to come into practice until next autumn and Majorcan hoteliers would like some form of action taken to cover them this summer.
During the meeting, other topics such as the outlook for the forthcoming season and the impact of Brexit were discussed.
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Perhaps if the greedy Hoteliers did a bit less All Inclusive, they wouldn't have such a big problem? More local Bars & Restaurents might also not have to close. Perhaps they could also stay open a bit longer? An auful lot of these problems are caused by Hoteliers & they still want to control the Island. Please wake up before it's too late.
False claims on any insurance put everybody's insurance costs up so everybody pays for a dishonest minority,prosecute them to the fullest extent of the law for fraud,publicize the prosecution's and the fraudulent claims will soon cease.