fraud

Introduction and the Fight against Insurance Crime

I have recently had the privilege of gaining more information on the fight against insurance fraud in South Africa. Insurance fraud is one of the contributing  factors to escalating car insurance premiums  – and this battle can only be won by way of public private partnerships.

The South African Insurance Crime Bureau (SAICB), working closely with the South African Police Service (SAPS) and the National Prosecuting Authority (NPA) has made significant and positive strides in addressing fraud and crime in the short term insurance industry and is proof of what can be achieved when business and SAPS works together.

This close working relationship has resulted in several projects being identified and implemented to assist SAPS in achieving their renewed commitment to tackle crime in all its guises, while assisting the industry in addressing the crime and fraud committed against it.

Cases under Investigation

The SAICB has 9 active cases under investigation currently and has taken 3 cases successfully through the courts and recovered R380 000 for the industry to date, with the assistance of the SAPS and NPA. The approximate value of cases under investigation is R120 million.

Other areas, not necessarily in the crime arena, were also identified where the SAICB could assist SAPS and one of the successful pilot projects launched has been the cleanup of the pound in Isipingo -KwaZulu Natal.

To date over R8 million has been recovered and over 350 vehicles uplifted by the industry. In addition to the industry vehicles identified, the SAICB and SAPS also assisted in identifying nearly 200 uninsured vehicles and contacted the owners of these vehicles to inform them where their vehicles were housed.

Insurance Fraud & Successes to Date:

  • Van der Westhuizen Case

Modus Operandi: Multiple policies at various insurance companies. He used details of clients [ surname / address details/ bank accounts]to initiate the policies. The policies shared three different bank accounts. Numerous small claims were submitted by the accused, whilst he pretended to be the insured. All payments went into the afore-mentioned bank accounts, of which he was the sole beneficiary.

He pleaded guilty on charges of Fraud and Money Laundering on 18/06/2010 in the Bellville Specialised Commercial Crimes Court – five counts of fraud and one of money laundering

He pleaded guilty and was sentenced to two years of correctional supervision, in addition to three years in prison suspended for five years.

He was also instructed to pay back R353 332, of which a once-off payment of R150 000 was made and distributed amongst the involved member companies and the rest of the money to be paid to the individual companies.

  • De Koker Case

Modus Operandi: Multiple insurance policies and claimed from more than one company for the same items at the same time.

De Koker was found guilty and sentenced to pay R20 000, 00 or two years imprisonment of which R10 000, 00 and/or one year was suspended for 5 years on condition that she is not found guilty of fraud or theft in the suspended period.  De Koker paid the fine.

De Koker was again arrested for fraud whilst the current case was pending – she is now awaiting sentencing.

Modus Operandi 2nd time: Claimed for trauma from hijacking when no hijacking took place

SAICB INVOLVED CASES:

  • False Theft Claim

Modus Operandi: Bikes and vehicles were reported stolen but were stored in a container.

Fraudulent claims on bikes, trailer and bakkie worth R1,1 million

Recovered with the assistance of SAICB. Accused appeared in court and pleaded guilty to 5 charges of fraud and one of defeating the ends of justice and will be sentenced in November.

  • Hoola Hoop scam

Modus Operandi: Insured handed vehicle to third party for sale across the border. Reported his vehicle stolen a few days later and received moneys from the sale of the vehicle as well as from the insurer.

Vehicle recovered and claim repudiated. Accused appeared in court and will be sentenced in November – Saving R496 000.

  • False Theft Claim

Modus Operandi: Fraudulent vehicle claim where driver reported vehicle stolen and was found driving vehicle – charged with fraud, defeating the ends of justice and malicious damage of property – plea agreement with state and will be paying back member company – R720 000.

Vehicle recovered from paid out fraudulent claim – Member company opened a civil case against accused. Value R250 000.

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6 thoughts on “Examples of Insurance Fraud in South Africa

  1. D L Morris

    My family and I were the victims of two hijackings within a year of each other (almost to the day). I got to thinking, as long as the cars are stolen, then changed in colour, engine and chassis details; and as long as there is someone who is signing the SAPS clearance, and as long as there is someone signing the change of ownership license papers; and as long as the dealers are buying these cars at a fraction of the price the corresponding legal vehicle goes for, and saying – wow what a great businessman I am I can sell a beemer at 70 000 when the new one is 487 000; and as long as there are people who are prepared to buy these vehicles, there will always be theft of cars. Every body wins, but the cars are steeped in blood – as long as this “tail” of theft, change appearance, false clearances and licenses, sale and disposal of the vehicles, car-jacking is never going to end ……

  2. Goldie Lasiter

    Is there really such a thing such as a one day car insurance? What if I signed for it because I just really need a day for it, will I be able to reimburse maybe at least half of the money that I paid for since the cost of it is not that cheap? I read some articles about it but this site has the best about insurance coverage so far and I will suggest it to my colleagues and friends!

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