- Holiday sickness claims cost the travel industry £240 million in 2016
- These costs could be passed on to British holidaymakers
- Tourists who are genuinely ill should still make a claim
Why is the government cracking down on sickness claims?
After ABTA reported that there had been a 500% increase in holiday sickness claims between 2013 to 2016, costing the industry £240 million in 2016 alone, suspicion grew that many of these claims could be fraudulent.
Having looked at the evidence, significantly the lack of a surge in claims from holidaymakers from countries other than the UK, industry leaders have some reason to believe that touts are operating in resorts and encouraging Brits to make fake sickness claims.
These touts work with claims management companies, which offer legal representation for people looking to make a claim against a holiday tour operator, travel agency or the hotel. If the claim is successful, any legal fees the holidaymakers incur from the claims management company can be passed onto the losing side.
How are holiday companies, insurers and lawmakers tackling fake claims?
The government has started to gather evidence on the surge in holiday sickness claims, while ABTA has recommended that the cost of claims abroad be limited – like last year’s changes to the car whiplash laws.
The government has already asked the Civil Procedure Rule Committee to consider extending fixed recoverable costs (FRC) to low value illness claims on package holidays.
The FRC system limits how much of the winning party’s costs the losing party will have to pay when defeated in court, or if they settle out of court, depending on the type and value of the claim. This could significantly reduce litigation costs, and hence fake sickness claims costs, for companies.
There is also an ongoing investigation into how these claims are handled.
How could fake holiday sickness claims affect holidaymakers?
Without a change to legislation, ABTA has warned that if the rising costs of fake claims continue, honest British holidaymakers could suffer.
Fraudulent claims against travel agents and tour operators may result in holiday prices increasing for everyone, as organisations have to recover the costs these claims have to their business.
To make their claim seem more genuine, fraudsters may also visit medical facilities and then add the cost of this to their claim. In other words, the person will be committing fraud twice: once in claiming against the tour operator and hotel which they claim made them ill; and once against their travel insurer for unnecessary medical costs.
These impacts could lead to an increase in the cost of both cancellation and medical claims for insurers, and then the premiums to cover those costs would rise – just as was seen with whiplash claims. There have also been reports of European hotels refusing British guests after receiving a surge in claims.
‘We welcome the consultation and would urge the government to accelerate the change of regulator for claims management companies to the FCA so that honest holidaymakers don't see the price of their holidays soar as a result of the holiday sickness claims plague,’ said Martin Milliner, LV= General Insurance Claims Director .
How can holidaymakers help tackle fake sickness claims?
The investigation is still in the early stages, but UK holidaymakers can act now to avoid fake holiday sickness claims. A fake claim is fraud, and could lead to prosecution, heavy fines or even jail time.
On the same day that the government announced it’s ‘move to end bogus holiday sickness claims’, a British couple were jailed for fraud. Tourism agency Thomas Cook took them to court for a £20,000 food poisoning claim after evidence emerged that it was fake.
However, there are ways all holidaymakers can help tackle fake sickness claims. Here’s what you can do:
- Report anyone who encourages you to make a fake claim to your holiday rep or the hotel owner
- You may also be contacted after your holiday, so treat any sickness claims emails with suspicion
- Even if you aren’t approached by touts, you can still email your MP to ask them to support ABTA’s Stop Sickness Scams campaign
However, you shouldn’t be discouraged to make a claim if you do become genuinely ill during your holiday due to poor hygiene standards.
If you are on holiday and become ill due to food poisoning after eating in a hotel used by your tour operator, here’s what to do:
- Seek professional medical treatment immediately
- Inform your tour operator and the hotel, so that they can address the poor hygiene standards issue
- Ask the tour operator to make a record of your complaint
- Read ABTA’s guidance for more information
Your travel insurance should cover you if you become genuinely ill on holiday and need medical treatment. Some travel policies including LV= travel insurance also provide legal expenses cover if there is a genuine claim to be made for negligence against someone.
With each gastric illness claim costing the industry, on average, £2,100, it’s no surprise that tour operators and the government have moved to crack down on them. As these claims could affect everyone going on holiday, British holidaymakers can also help by avoiding touts and reporting them if approached.