Britain's biggest mortgage lender has announced plans to use lie detectors in a bid to weed out fraudulent insurance claims.

HBOS claims it is the first insurer to use voice stress analysis technology to try to detect if people are lying when lodging claims under household insurance policies, although other firms already use it on motor insurance claims.

The group, which is made up of Halifax and Bank of Scotland, plans to begin using the technology in September for a three month trial period.

An HBOS spokesman said: "It won't be used in isolation. Policyholders with honest claims have nothing to fear from it."

The technology will only be used on a few hundred HBOS claimants to see how effective it is and customers will be informed if they are part of the trial.

The group already uses a range of techniques to detect fraud, including sharing information with other groups to see if more than one claim has been submitted, looking at people's claims history and checking claims for weather damage against Met Office data.

Fraud on motor and household insurance costs the industry more than £1 billion a year and Lloyd's of London syndicate Highway Insurance has been using voice stress analysis technology to detect fraud on motor insurance claims for more than a year.

The group uses the technology in association with narrative integrity analysis, which looks for inconsistencies in people's accounts of what happened and speech patterns such as taking long pauses before answering questions.

Kerry Furber, fraud reduction management consultant for Highway Insurance, said before the firm started using the technology about 5 per cent of claims were turned down because they were either suspected of being fraudulent or the claimant was not covered under the terms of the policy.

Since the company started using the technology the figure more than tripled to 18 per cent.

Friday August 15, 2003