FILE: Investigations have revealed a syndicate worth thousands of pounds where holidaymakers are encouraged to make bogus claims. Photo: Flickr

Two Britons suspected of encouraging holidaymakers to make dishonest compensation claims have been arrested in Majorca.

The pair were held on Friday by Civil Guard officers in what are believed to be the first arrests of their kind in Spain.

The move follows a series of Mail on Sunday investigations which have found rogue claims firms in the UK are encouraging British tourists to lie about being taken ill to claim thousands of pounds.

The practice is costing the travel industry millions – which will ultimately force the cost of holidays to rise. One company told a Mail on Sunday reporter posing as a tourist who had fallen ill to pretend his entire family had been affected so he could claim even more.

Police in Majorca are understood to be investigating whether the suspects were acting on their own or with one of the firms.

The pair, who have not been named, are expected to face a judicial investigation after being quizzed by police. They are believed to have been targeting holidaymakers in hotels in Alcudia, the main tourist centre in the north of Majorca.

Their arrests follow a campaign by hoteliers in Spain, and other holiday hotspots such as Greece and Portugal, against the growing problem of bogus claims, particularly involving all-inclusive resorts.

Tour operators in Majorca have reported a 700 per cent rise in the number of complaints about stomach problems, with the Spanish hotel owners’ association estimating that 90 per cent are bogus.

Earlier this month, its general secretary, Ramon Estalella, warned it would be gathering evidence to start prosecutions, and drawing up a protocol so hotels would only pay compensation if genuine medical evidence formed part of any claim.

Last month, the Foreign Office warned holidaymakers in Portugal they would face legal action if they submitted false claims.

The Association of British Travel Agents says there has been a 434 per cent rise in the number of gastric illness claims from British tourists since 2013, with payouts of as much as £2,000 in some cases.

UK visitors to Spain and Portugal are said to be the worst offenders.

Source: Mail On Sunday