An elderly British tourist goes on holiday abroad. While away he gets a headache and it is bad enough for him to ask the local hospital for help. The medics keep him in for a few days and demand around €20,000 from him and then pursue him and his insurer for non-payment.
This true story reflects a widespread trend this year. In this case, specialist travel insurance lawyer Daniel Scognamiglio of Blake Lapthorn was called in to challenge the hospital.
"We were a bit lost as to the quantity and type of the treatment provided," he says. "We've got a number of hospitals we tend to keep an eye on."
It's an issue of which the entire UK travel insurance industry is aware.
"There are cases of over-prescribing and even phantom patients," says Steve Manton, travel industry expert of the consultancy Manton Associates.
A hospital in a popular location can treat so many British tourists it might hope to slip in a few extra names. Nearly a third (30 per cent) of hospitalisations happen in Spain, and half of these take place in Majorca and Ibiza, according to the Foreign Office's British Behaviour Abroad report, published last month.
Another worrying trend in Spain is being tackled by Axa, the UK's market leader in travel insurance. It has noticed that some Britons who have EHICs, the card which enables us to receive state medical help in other European countries, are not getting the benefit of it.
David Vincent, head of travel underwriting, accuses a major Spanish healthcare company of "diverting customers who have EHICs and travel insurance into private wards rather than accepting the EHIC and treating the customer under the reciprocal health agreement". It is working with the industry body, the Association of British Insurers, to tackle the practice.
As the end of August comes into sight, travel insurers will be dealing with hundreds of thousands of claims from the 24 million Britons which travel association ABTA estimates went abroad this summer. As well as dealing with fraudulent clinics abroad, the insurers will be trying to weed out phoney claims and those which are beyond the scope of the policies.
Mr Scognamiglio says: "Insurers are much better at identifying fraud than they have ever been."
And many fraudulent claimants catch themselves out, says Steve Manton, by, for instance, posting up pictures on Facebook from a camera which they had previously claimed was stolen on the beach.
Many people will find themselves turned down for claims because of what Mr Scognamiglio describes as "a very hot topic" – drink.
"There is no pre-defined limit as to what is too much to drink," he says. But people, mainly young men, who drink or take drugs and then end up hospitalised after they jump off a balcony or dive into a shallow pool will not be covered, as policies usually exclude reckless behaviour. A grey area is the tourist who falls over and breaks a leg after drinking some wine.
"Your glass or two of Pinot Grigio over a meal tends to be a lot less clear," says Mr Scognamiglio. "If it is less clear, insurers tend to pay out."
Mr Manton says: "You could argue that half a bottle or a bottle of wine is fine but you might find that an insurer disputes it."
Most of us would benefit from reading the terms of our insurance policies not just to understand how strict the terms are on alcohol but to discover the legion of other issues that could affect our claims.
A common problem area is medical history disclosure when buying a policy.
"A claim could be rejected if a problem has not been disclosed even if it is totally unrelated," explains Mr Manton.
He identifies another potential sore point – cancellation claims when a family member falls ill. So strict are some insurers that he suggests: "Should I ask my close relatives if they have a medical condition incase I need to go to their funeral?"
Claims will be subject to numerous checks because the sums involved can be very significant. The average travel claim at Nationwide is now £532.
Providing good documentation can be crucial in getting a claim lodged successfully, according to Mr Manton. This would include receipts when items were bought, police reports on thefts, contact details of witnesses and photographs of the scene of the event. If receipts are not available, insurers can be open-minded as to what they will accept as proof of ownership. A camera manual or camera case could be accepted at Axa, for example.
Acting fast is important – to inform the police and holiday rep, alert the insurer or even contact a specialist travel insurance lawyer (as "there are tight time limits, sometimes as low as 90 days", says Mr Scognamiglio, referring to deadlines for lodging claims or starting legal proceedings).
Going abroad in a severe economic downturn has extra perils. Not only will unscrupulous doctors try to fleece us but we will also take dubious short-cuts ourselves. If you buy a package holiday, for example, you are covered by the helpful Package Travel Regulations. If you buy the flight and hotel separately yourself you lose that protection. If you take the cheapest insurance available you may have bought yourself a policy with very narrow conditions.
Travel insurance is changing fast. Mr Scognamiglio expects the industry to set up a fraud database. Mr Manton predicts the development of more travel insurance apps, and maybe discounts for holidaymakers who use them by sending in beforehand a list of expensive belongings they are taking abroad and who accept that their location will be monitored on GPS through their smartphones.
Case study: Nationwide averts Greek tragedy
When she broke a toe at her holiday home on the Greek island of Skopelos, retired social work manager Jennifer Nelson began to get worried. Medical facilities are limited and transport is a challenge.
"They could not treat my foot on the island," she says. "I was extremely frightened. I would need to go to a hospital on the mainland and stay overnight on my own." A friend suggested she use the travel cover she took out with her Nationwide Flex account.
"Straight away they said they would take over," she says. "They organised for me to be carried from my house to Volos [a port town on the mainland]." A private motorboat and ambulances were laid on. Her fractures were diagnosed on Volos and she returned to Skopelos to see if a natural recovery would occur. When her toe did not heal she was flown back to Manchester and had two extra seats reserved for her on the plane to help her spread out.
Then a taxi took her home to Gateshead. Two months later she has been treated in the UK and recovered so well she hopes to return to Skopelos in a couple of weeks. Jennifer has spent no money herself while Nationwide has paid out £3,700. "They were absolutely fantastic," she says. "I couldn't have coped on my own.
ABTA, the travel association: abta.com/home
EHIC (European Health Insurance Card): nhs.uk/NHSEngland/Healthcareabroad/EHIC/Pages/about-the-ehic.aspx and 0845 606 2030.
Financial Ombudsman Service: financial-ombudsman.org.uk, 0800 023 4567 and @Financialombuds