P&I correspondents are being urged to strengthen payment verification procedures after a fraudster intercepted email communications during a crew claim and diverted a US$200,000 settlement, according to the International Transport Intermediaries Club (ITIC).
The incident, highlighted in ITIC's latest Claims Review, involved a correspondent handling a sensitive crew-claim settlement following a fatality. During the process, a third party gained access to email correspondence and began impersonating several individuals involved in the claims, including members of the deceased's family.
Using fake email addresses and fabricated documentation, the fraudster supplied false bank details and fraudulent settlement authorities. Believing the communications to be genuine, the correspondent transferred the US$200,000 settlement to the account provided.
The fraud was only discovered when the deceased’s family later contacted the correspondent to ask why payment had not been received. By that point, the funds had already been withdrawn and could not be recovered.
Sophisticated modes of fraud
ITIC claims director Mark Brattman said the case demonstrates how increasingly sophisticated payment interception fraud has become, particularly where claims are complex, time-sensitive or emotionally charged. He noted that email interception remains a well-established fraud method and is often used to target high-value payments, with fraudsters exploiting pressured or sensitive situations and relying on the apparent credibility of forged documentation.
Brattman also said the quality of fraudulent emails continues to improve, making it difficult to identify fraud based on content alone. As a result, he said checks are required to verify whether communications are genuine, warning that any change to bank details should be treated as a significant red flag. He added that discrepancies such as bank accounts located in a different country from the payee, or account names that do not match the intended recipient, should prompt immediate concern.
Following discovery of the fraud, the correspondent notified the P&I Club immediately. Legal counsel was appointed to verify the claimant’s identity and to finalise the settlement correctly. The member paid the settlement again in full from its own funds and also incurred additional legal costs to ensure the family received the payment owed.
The correspondent was insured by ITIC, which assessed the incident as a failure to identify fraudulent communications and to independently verify new bank details before authorising payment. ITIC reimbursed the correspondent for the additional legal costs associated with resolving the claim.
Growing exposure
The case highlights growing exposure for P&I correspondents, claims handlers and intermediaries as payment interception fraud becomes more targeted and harder to detect operationally. As claims processes increasingly rely on email and digital documentation, the risk of impersonation and manipulation at the payment stage is rising, particularly in high-value or sensitive claims.
From an insurance perspective, the incident underlines the importance of clear internal controls, documented verification procedures and segregation of duties when authorising settlements. Failures at the operational level can result in uninsured losses, reputational damage and duplicated claim payments, even where insurance responds to ancillary costs such as legal expenses.
Brattman said the incident reinforced the need for correspondents to verify identities and payment instructions through secure, multi-channel communication. He advised that bank details should always be checked using publicly available contact information, rather than relying on details supplied by email, and encouraged members to maintain robust fraud prevention measures and strong internal control systems, particularly when managing settlements and other critical payments.
