Insurance cheats will be subject to lie-detector tests in a pilot project being introduced by a Edinburgh bank.

City-based HBoS will launch a three-month scheme starting in September analysing phone calls to its insurance hotlines using the sophisticated technology.

And the insurance industry is sure to be watching with interest as it fights to reclaim the estimated £1 billion which the Association of British Insurers says are made in fraudulent claims each year.

The new HBOS phone system will randomly test a selection of the calls it receives from its 1.5 million policyholders.

Using voice stress analysis techniques to detect changes in speech patterns caused by stress, the machines will be able to make an initial assessment as to whether the caller may be lying.

A special series of questions has also been devised to try and catch out fraudsters.

Mark Hemingway, spokesman for HBOS, said plans to use the voice stress system would begin on a “small-scale” trial basis on calls to its household insurance department.

He said honest policyholders had nothing to fear from the new system as it will not be used in “isolation”, but only as a starting point for further investigations.

He added that it could also lead to lower premiums.

Mr Hemingway said: “The techniques of voice stress analysis have been used in the insurance trade for the last 18 months or so to combat fraud and have been shown to be successful.

“This will just be one of systems we use to help cut down on fraudulent insurance claims and it won’t be used in isolation and won’t include everyone.

“After the initial three-month trial period we’ll be able to judge whether it’s been a success or not.”

Callers selected to be part of the trial will be read a short script outlining responsibilities under the Data Protection Act before they give details of their claim. And Mr Hemingway said there will be measures in place to make sure only fraudsters are trapped, rather than those who naturally find making such phone calls difficult.

He said: “The system will be used with a whole host of other ways such as the sharing of information which the insurance industry does as routine.

“Honest policyholders will have nothing to fear and combating fraud will make things better for them anyway by helping to keep premium costs down.”

And, according to research carried out by Insurance Times magazine, the system, which takes about 15 minutes per claim, could be used to cut down dramatically the need for lengthy investigations into claims by insurance loss adjusters.
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