Insurance fraud costs the industry �1bn a year

The technology, developed by Israeli firm Nemesysco Technology and distributed in the UK by security software specialists DigiLog UK, will be used on HBOS' claims hotline for a three-month trial period starting in September.

HBOS says it will screen between 300 and 400 telephone claims during the trial - and will inform customers if they are being used as guinea pigs.

"It won't be used in isolation and clearly it will be voluntary. Refusing to take part won't impact on the claim at all," said HBOS spokesman Mark Hemingway.

"If it reduces fraud then that will impact on premiums and that will be good for everyone. Genuine claimants have nothing to fear."

Claim checklist

HBOS, which has around two million policyholders, already uses a range of methods to detect fraud, including cross-checks with rival insurers to see if more than one claim has been submitted.

HAVE YOUR SAY Can the technology distinguish someone who is simply nervous speaking to strangers over the phone? Chris, UK Send us your comments

It also examines policyholders' claims history, and checks claims for weather damage against Met Office data.

The Association of British Insurers (ABI) estimates that fraud in household and motor insurance costs around �1bn a year.

Malcolm Tarling of the ABI said: "Companies are currently looking for ways to weed out fraudsters and using up-to-date technology is part of a range of fraud detection methods.

"The majority of claims are genuine and insurers want to devote more resources to dealing with these."

HBOS will start its phone line "lie detector" pilot next month

Telephone lie detectors are used by only one other insurer - Highway Insurance - which has had the technology in place for more than a year.

The system, known as a "voice stress monitor" picks up speech patterns such as long pauses before answering questions.

Highway Insurance said the proportion of claims it turns down has risen to 18% since it introduced the technology, from just 5% previously.

Psychological deterrent

DigiLog says that the system to be piloted by HBOS is "two tiered".

Managing director Kerry Furber said: "We use the technology in a live environment, and we also use operators that have been trained in identifying behaviours associated with truth and deception.

"We're then able to be fairly certain, not 100%, but fairly certain, that there are risk problems within a claim that need further validation.

"The psychology of that persuades many claimants to withdraw from the process altogether."