Spain busts British ring behind €60 million vacation food poisoning scam

The Spanish Civil Guard has arrested seven British nationals suspected of cheating Spanish hotels out of €60 million through phony food poisoning claims. Most of the hotels that fell prey to the scam are located in the Balearic Islands.

In 2016 alone there were 400 such claims, representing nearly €9 million in compensation.

The British government launched an awareness campaign in July

Following a months-long investigation, Civil Guard officers raided six homes and two commercial premises in Palma and Calviá, where seven individuals were arrested on suspicion of leading a ring specializing in fraudulent food poisoning claims. The network had “sales agents” who were sent out to local hotels in search of tourists, offering to help them process the claim and explaining what documents to produce.

The group operated mainly on the island of Mallorca, where the hotel industry estimates that it has been scammed out of some €50 million. But the ring’s activities also extended to other popular destinations, where the sector was cheated out of a further €10 million or so.

The government’s delegate in the Balearics, Maria Salom, gave a press conference on Thursday to provide details about the raid, which took place on Tuesday. Operation Claims was carried out with assistance from the Hotel Business Federation of Mallorca (FEHM) and the UK government. Ambassador Simon Manley visited the island in April of this year to address the issue.

The network had “sales agents” who were sent out to hotels in search of tourists

Salom said that in 2015, there were 160 food poisoning claims filed by British travelers to Mallorca, for a combined compensation of £3 million (€3.3m). The following year, there were nearly 400 similar claims worth a total £8 million (€8.7m).

“These claims have also been taking place in other parts of Spain,” said Salom, adding that she hoped the Mallorca raid would serve as a deterrent.

The arrests come nine days after UK officials stripped the license from a British company called Allsure Ltd following an investigation by the British government’s Claims Management Regulator (CMR), which found that the company “had encouraged holiday-goers to fabricate or embellish symptoms of gastric illness to get compensation. Further evidence showed the firm had used deceptive sales scripts – exaggerating expected pay-outs to entice consumers.”

In a press release, the CMR added that “the action taken against Allsure Ltd is the latest in a series of moves by government to crackdown on fake sickness claims, following concerns from the travel industry of a surge in insurance claims for gastric illnesses such as food poisoning being brought by British holidaymakers.”

In July, the British government launched an awareness campaign warning tourists that they could face prosecution at home and abroad if found to have lodged bogus sickness claims.

Mallorca’s hotel industry association has been complaining since 2013 about this type of fraud

Mallorca’s hotel industry association had been complaining since 2013 about a type of fraud that typically concerns all-inclusive travel packages: holidaymakers are persuaded by claims-management firms to file false complaints against the company that organized the trip, alleging that the hotel meals made them ill.

The only medical evidence required is a pharmacy receipt for medication to treat stomach trouble. Since it is hard to prove that the client did not get sick, and faced with high legal fees if the case goes to court, the tour operator accepts the claim, then passes on the cost to the Spanish hotel as per their contract, in which the latter accepts responsibility for all damages. The holidaymaker gets a full refund for the cost of the trip, and the intermediaries take a fee.

Mallorca hotel industry leaders noticed a rise in food poisoning claims by British tourists in 2014, following a change to consumer arbitration legislation in the UK. Under British law, claims against travel operators may be lodged up to three years after the trip took place.

English version by Susana Urra.