Animal fraud on the rise

Vetting animal claims

Animal-related fraud is on the increase, with exaggerated claims for treatment a common cause. Claire Laver and Carys Clarke examine ways to combat the problem.

Recently, the fight against insurance fraud has focused on motor claims. However, as criminals look for new areas to exploit, pet and equine cover have come to the fore.

Animal-related fraud is certainly on the increase. A major insurer has revealed that between 2008 and 2010 the number of claims where fraud has been suspected or proven has increased 440%.

But what kind of fraudulent claims are being presented and what can insurers do to combat them? As with motor insurance, the types of pet and equine fraud vary, but suspicions are often aroused with potentially exaggerated claims for treatment.

In addition, loss of use and value of the animal, the deliberate destruction or maiming of an animal disguised as an accident and deliberate destruction of an animal by a veterinary surgeon when unnecessary are also areas where fraud might arise.

Combating fraud in this area can be difficult, so insurers may look at the most straightforward way to repudiate a first-party claim. Being in possession of the proposal form, claim form, policy terms and conditions and telephone recordings where possible will assist in the first instance in trying to obtain a technical knockout.

Scrutinising records

Other more routine enquiries may be necessary, depending on the individual case facts, but being able to scrutinise veterinary records can be crucial in successfully defending a claim. However, obtaining these records can prove difficult.

Unlike human medical records, veterinary records do not follow the animal. It is possible that an animal may have records at a number of practices. Reasons for this could be simply because an owner has moved and the records have not followed, or the animal has been sold and the records are not passed. But it could also mean that there has been a deliberate attempt by the owner to hide details of the animal's medical history.

Insurers may also be presented with claims for the cost of drugs for treatment of animals that don't exist or for a treatment that is unnecessary or more expensive than needed. These are particularly worrying types of fraud, because they often require the help of a vet.

Where it is suspected that a vet is involved in the presentation of a fraudulent claim it is also necessary to consider the treatment of the animal. There are usually a number of drugs that may be appropriate in the treatment of a given condition and the veterinary surgeon is not necessarily constrained, as a GP in the NHS system is, by choosing the cheapest drug.

However, the vet may choose more expensive drugs than are necessary if the surgeon is aware that the animal is insured; similarly there is a potential for unnecessary or fabricated treatment.
There are a wide range of drugs available for the treatment of animals, and certain drugs are more appropriate for different species of animals and for the treatment of certain conditions. It is not always possible to use the cheapest medication but it's also not essential to use the most expensive.

A veterinary surgeon must always consider the most appropriate medication for that particular animal with that particular condition. Therefore, a review of the medication and treatment given to a particular animal can be useful in drawing a conclusion on its appropriateness.

A simple price comparison reveals the frequently used drug Amoxycillin may cost £17.99 for a full bottle, which would be sufficient to treat a number of animals, but a branded preparation that contains exactly the same active ingredients could cost twice as much.

Drawing on experience

In addition, the 'cascade system' applies to the use of veterinary medication. For example, initially the vet must choose a drug that has been licensed for a specific species of animal with a specific condition. If no such drug has been licensed, the vet must look for a drug that is licensed for that species of animal. If one is not available then they must draw on their experience to choose an appropriate medication.

This may result in what initially looks like a fraudulent claim because the choice of drug may appear to be more expensive but, in fact, the vet is merely complying with the Veterinary Surgeons Act and guidelines.

While the legitimate vet will never carry out unnecessary treatments or use inappropriate drugs purely because an animal is insured or for any other reason, as with any other profession there will always be a minority who are intent on facilitating or committing fraud.

Close scrutiny of veterinary records and invoices may be a quick and easy way to validate a claim. Insurers should be mindful of the increasing exposure to fraudulent claims and equip themselves with the tools needed to combat them.

Claire Laver is a partner and Carys Clarke is a solicitor and qualified vet (non-practising) in the fraud team at Berrymans Lace Mawer

The article is not a substitute for specific legal advice and should not be relied upon as such.