Travel insurance providers have spelled out the negative consequences for people who try to make false claims while abroad.

The Association of British Insurers (ABI) have reported a dramatic increase in the number of fraudulent claims as compared to this time last year. The trade group put the blame on the credit crunch and argued that people were prepared to take more risks to get money in times of economic downturn.

The ABI describes a number of incidents where travellers claim to have had expensive electronic items stolen while on holiday in order to claim money. They also describe instances where people who had no intention of travelling claim illness in order to receive payment.

Malcolm Tarling from the ABI commented:

“Travel insurance is always susceptible to fraud when times are tough and people look at ways of raising what they believe is easy money, because the losses are abroad and police overseas are often not interested in investigating, people can claim possessions have gone missing.”

He was clear though that if your insurer dismisses your claim it will go on your credit record and could cause unforeseen consequences.