Contentious all-inclusive holiday sickness claims could threaten future of travel industry

14 Dec 2016

Contentious all-inclusive holiday sickness claims against the public liability policies of tour operators and hotels could threaten the future of the travel industry.

Although this fraud is being driven by claims management companies, consumers are at the heart of this.

We wanted to get a better understanding of the consumer view. Do they know this is happening? Do they think it is acceptable? Are particular demographics being targeted by the claims companies?

To this end we commissioned YouGov to survey over 2,000 UK consumers about their travel habits and attitudes to this fraud.

Read more in our white paper which you can download here and if you would like to discuss any of the issues raised, do not hesitate to get in touch.

By receiving our white paper your details will be added to our database and we may send you relevant information from time to time. If you would prefer not to be mailed please email dataanddigital@blmlaw.com

Our animated infographic which highlights our findings can also been seen on our YouTube channel here.

The full press release is below:
 

Fraud culture thriving with travel illness claims

Consumer survey reveals scale of the issue pushing up holiday prices

The travel industry has been hit by a dramatic rise in gastric illness compensation claims, with rogue claims management companies (CMCs) urging holiday makers to put in speculative claims against operators and hotels, according to new research from insurance and risk law firm BLM.

BLM commissioned YouGov to survey 2,000 GB consumers on their attitudes to sickness claims on all-inclusive holidays, after the law firm saw claims against its in travel customers soar over the past 12 months.

46% of those questioned think it would be acceptable to make a claim for food poisoning even if they weren’t sure their illness was the fault of the hotel, a belief that has helped create a thriving fraud culture, according to BLM.

Sarah Hill, partner and head of fraud at BLM said: “It is not exaggerating to call this situation an epidemic. CMCs have identified this as fertile ground and there is a deep pool of potential claimants up for grabs. There needs to be some level of consumer education, as almost half of those surveyed think this practice is acceptable. In reality, it is against the law and is pushing up holiday prices.”

CMCs are proactively chasing potential targets, often using social media to trawl for potential claimants. However, direct engagement is also taking place through phone calls and approaches abroad. BLM found that 5% of people have received an unsolicited call about making a claim against a holiday company, and 5% of all-inclusive holiday goers have been approached to make a claim during a holiday.

The CMCs are also targeting those that are likely to be more vulnerable to committing fraud, with 15% of all-inclusive holiday goers with two or more children in the household having been approached while abroad on an all-inclusive package holiday – some with the potential to pay for next year’s holiday on offer.

Hill continued: “Payouts typically range between £500 and £2,000, and many people are seeing this as a quick and easy way to make some money, with CMCs assuring their targets that they are entitled to make these claims.

“The industry needs to come together with government to develop a solution to this issue. It needs addressing in the same way whiplash claims were, with regulation that drives rogue CMCs out of the market. If left unchecked, this could threaten the future of the travel industry.”

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Sarah Hill

Sarah Hill

Partner,
Birmingham


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