Fraudulent travel claims are soaring by up to 80 per cent as tourists feel the pinch in the current economic climate, according to insurance companies.

Insurance firms say that fraud is on the rise, with many customers pretending that possessions such as expensive cameras and iPods have been stolen overseas, while others are upping the value of what has been stolen in the case of genuine theft.

Some travellers who realise that they cannot afford holidays booked earlier in the year are believed to be cancelling trips, after feigning illness and tricking doctors into issuing certificates stating that they are unwell. Most travel insurance policies offer cancellation refunds when a traveller falls ill before a trip.

The Association of British Insurers says that its members report a definite increase in fraud. “Travel insurance is always susceptible to fraud and when times are tough, people look at ways of raising what they believe is easy money,” said spokesman Malcolm Tarling. “Because the losses are abroad and police overseas are often not interested in investigating, people can claim possessions have gone missing.”

However, he pointed out that insurance companies are now primed to spot “telltale signs” of false claims: “I won't say what those are though.”

There are few prosecutions as the facts of cases are often difficult to prove. However: “If your claim is rejected, that goes on your credit rating. It will make loans and insurance more expensive in the future.”

AXA, the UK's leading insurer, said that travel insurance fraud was up by 83 per cent in July compared with last year. Richard Davies, AXA's group fraud risk manager, said: “We've seen a rise in opportunistic fraud connected to the credit crunch. We're rejecting many more claims than this time last year. If someone commits fraud it's honest customers who end up paying in the form of higher premiums.”

Derek Ketteridge of Ketteridge Group Ltd, a broker, said: “Suddenly people are losing their luggage. Claims that were £200 are now £300. We're getting cancellation claims from people can't afford trips.”

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