Why Some Turn to Insurance Fraud to Finance Christmas

November 20th, 2023

Why Some Turn to Insurance Fraud to Finance Christmas

The lead up to Christmas and the traditional summer holiday break can be a stressful time for whanau experiencing financial stress. The expectation of buying Christmas gifts, hosting a lavish Christmas lunch and unpaid leave for some at that time of year, can put financial pressure on some households.

The summer period is a traditional time to head away too, at a time of year where accommodation is at a premium and holiday hot spots around Aotearoa New Zealand are charging a top dollar for their services. The financial burden of the holiday season can be overwhelming for households.

For some people, financial strain can lead to them exploring insurance fraud as a means to receive much needed funds. Let’s take a look at why some people get to this point, and the impact of this behaviour.

1. Rising cost of living

Aotearoa New Zealand has experienced year on year inflation increases since the Covid-19 pandemic. This has led to a rising cost of living. Stats NZ reported that the cost of living for the average household increased by 7.2 percent in the 12 months to June 2023, the main contributor was rising food costs. Feeding our families, paying utility bills and home loan repayments are unavoidable which puts pressure on households when household incomes aren’t increasing at the same rate.

Having less disposable income to finance things like a memorable Christmas experience or a family summer holiday, can be a trigger to explore fraudulent means of making ends meet.

2. Economic Challenges and Downturns

A mix of high inflation and an election year has made 2023 an uncertain year for many businesses and their employees. Talk of a recession, and a sluggish economy have meant that many businesses have had to press pause on larger projects, taking on new staff, or increasing wages.

This has a knock on impact on Kiwi households, who are approaching the end of the year with less cash in their pockets, or uncertainty about their current employment, which can mean the prospect of a festive Christmas celebration or much needed holiday break is on hold or needing to be downgraded.

3. Social pressure and expectation

Some people can be heavily influenced by social media, when it comes to an Instagram-perfect Christmas Day. Examples might include a heavily decorated tree, multiple gifts for each family member, matching Christmas outfits for the entire family and a beautifully decorated lunch table with gourmet food.

For others there could be pressure from family members to incur travel expenses to get to a certain location, or spend a certain amount on Christmas gifts or Christmas lunch.

Keeping up appearances and disappointing loved ones can lead some people to desperation. We see instances of insurance fraud occur in times of financial stress.

Insurance fraud opportunities

We have previously discussed why vulnerable people, under financial pressure, can look for opportunities to take advantage of a situation. They may have an insurance claim to make, or an insurance claim they could easily invent, in order to take advantage of a cash payout just prior to Christmas.

Exaggerating or misrepresentation of an insurance claim

This article serves as a timely reminder that exaggerating or misrepresenting an insurance claim is fraudulent. Committing insurance fraud is a criminal offence.

We strongly recommend you think before you act. Is exaggerating your insurance claim worth the consequences?

Concerned about insurance fraud?

Insurance fraud is not a victimless crime; it’s a crime that all policyholders pay for. It’s critical to tell the truth about what’s happened when making a claim. You can report insurance fraud anonymously on our website.