From exaggerated injury claims to crash for cash, housing tenancy to procurement fraud – the list of fraudulent activity affecting local government is long, costing councils an estimated £2.1bn every year.

While new sources of intelligence are supporting the fight against fraud, investment must continue to ensure tight council budgets are spent on local services, not local scams.

Fraud detection is a growing priority across local government, but there remains a significant variation in performance. The Audit Commission recently found that one quarter of all councils are responsible for detecting three quarters of all local government fraud. If best practice approaches to fraud detection were emulated across all local authorities, not only might we expect to see fraud savings continue to rise, but it could also deter against potential fraudsters.

At Zurich Municipal, we work closely with dedicated teams at local authorities to identify and investigate possible cases of fraud. The process of spotting suspicious claims relies on the union of technology and experience. Sophisticated data mining software can identify links between different claimants or patterns in past claims behaviour – highlighting, for example, if the driver and injured in a crash scenario are known to each other, or if the claimant has a track record of unusual claims. The instinct of expert claims handlers is also vital in identifying unusual scenarios or spotting details that seem inconsistent with an alleged incident.

As, like many of us, fraudsters are living out more of their lives online, the opportunities to detect and prove fraud are rising. The internet and social media have been game changers in fraud detection, allowing claims handlers to view real-time information made public by claimants. While public surveillance has often been used to disprove exaggerated injury claims, now social media profiles can be a valuable source of public evidence, using photos, comments or friendship circles.

In one recent example, a local authority received a claim relating to a young child who had broken a leg falling off industrial bins, which the mother said had been left negligently unsupervised. When the height of the climb by such a young child initially aroused suspicions, further investigations were launched, during which the mother repeatedly confirmed the date of the incident and her resulting loss of earnings from having to miss work.

However, Zurich’s investigative team found that the mother had posted recent comments onto a social media site about being unemployed, as well as uploading pictures of her child in a full leg cast– two weeks before the alleged accident. As a result of the investigation, the claim was rejected.

Effective fraud detection and prosecution depends on investment, but at a time of tightening budgets this should be money well spent – helping to deliver long-term savings for local authorities. Tackling fraud effectively should not only minimise unnecessary expenses on illegitimate claims, but also deter potential fraudsters altogether.

Richard Shanks is head of claims at Zurich Municipal.