South Africa

Covid-19 economic fallout sees rise in 'walking dead' insurance scams

Johannesburg – The walking dead wander among us, they live and breathe and try their damndest to keep one step ahead of the law.

These are no zombies - this is the nickname in the insurance industry for those people who either fake their own deaths or don’t know that someone has “killed” them off for financial gain.

And with the economic fallout from the Covid 19 epidemic, the numbers of the walking dead appear to be increasing, as are other false insurance claims and scams.

“We are seeing across the board, people are faking retirement claims, disability claims, retrenchment, credit loss and life cover. And we’re seeing a variety of either false death claims, where I am claiming on my granny, but she is not really dead, she is hidden away in some remote area,” explains Garth de Klerk, chief executive of the Insurance Crime Bureau, a non-profit company dedicated to fighting organised insurance crimes and fraud.

He added that besides false death claims, there were actual murders where syndicates employ professional hit men to kill people on whom they had taken out insurance policies.

“It’s not R5 million at a time, it’s R100 000, R200 000, maybe R50 000. So it’s under the radar,” says De Klerk.

“If you had to shoot me, and the claim was R50million, there will be a proper investigation If you have a R50 000, R100 000 or R200 000 claim, you get a couple of thousand of those in the system and there’s maybe not so much scrutiny as there should be.”

Many of the walking dead are innocent and unaware that they have “died”. They are the victims of identity theft. Others, however, kill themselves off multiple times by buying new funeral policies.

“And they just keep on claiming on their own death,” says De Klerk. “It’s really difficult to prove these deaths, other than a piece of paper, which can be bought.”

A faked death certificate says De Klerk can be bought for as little as R500.

“We are often involved in syndicate investigations, where there are players within the mortuary or within the funeral home, sometimes even law enforcement are involved,” he adds.

Insurance companies haven’t released figures yet of fraudulent claims committed during the lockdown, but anecdotal evidence, De Klerk says, suggests an increase.

There have also been an increase in the number of Covid-19 death claims, which has raised a red flag.

“So now we’re establishing central databases on all Covid death claims,” he says.

But the counter-fraud industry might now have found the perfect weapon to slay the walking dead. On Wednesday the Southern African Fraud Prevention Services (SAFPS) a non profit organisation focused on fighting fraud, launched an app called Secure Citizen.

The aim of Secure Citizen is to provide companies and financial organisations with a quick way of proving the identity of a person applying for credit or a loan.

“It’s going to help consumers live an honest life, this will make sure that they will not become a victim of impersonation,” says Manie van Schalkwyk, the ex-director of SAFPS

The app works by collecting information about an individual, including biometric data. It is all verified quickly.

“We validate this against various sources, and provide the company with an assurance that they are dealing with the correct person,” says Van Schalkwyk.

The app even has the function of asking the individual for a voice clip, so as to verify that the person is alive.

The app that is available at the moment is for commercial use, the plan is to roll out a consumer version in the next two months.

The launch of Secure Citizen comes as the SAFPS reported a dramatic increase in the number of scams and frauds over the Covid-19 lockdown.

Initially, Covid caused a two-thirds drop in fraud cases.

But by May, as economic activity resumed, the SAFPS saw a dramatic increase in impersonation fraud that was double the annual average.

Gauteng moved from 55% of all fraud incidents reported in the country to 79% between February and the end of May.

“Banking fraud went from representing 32% of all our frauds to 52% of all our frauds, and fraud with unsecured lending doubled,” says Van Schalkwyk.

The SAFPS also noticed new scams.

“We have seen something that’s interesting. When fraudsters do account take-overs they change your details, like your email address. But what we’ve seen is that they will phone various call centres and just change one detail. If you change a lot details at once, all the credit providers will sit upright.”

The Association for Savings and Investment South Africa has also noticed an increase in scams over the Covid lockdown period.

“There seems to be a big problem of people impersonating companies, and especially targeting the elderly,” says the organisation’s spokesperson, Lucienne Fild.

The scams are related to Covid relief.

“So people are handing out their details thinking they’re going to get Covid relief. This then enables the fraudsters to take out illegal policies,” she adds.

As the economy is likely to continue to suffer from the effects of the pandemic, fraud is likely to increase, and the walking dead continue in their efforts to stay one step ahead of the law.

The Saturday Star

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