News Update from the South African Insurance Crime Bureau

The SAICB is presently engaged in an investigation which may lead to an industry saving of approximately R1 081 862.21. It is alleged that five suspects, operating a syndicate have targeted Transport Companies by submitting false windscreen claims without the knowledge of the insurer.

The suspects achieved this by presenting their business proposal as windscreen fitment centre experts to various Transportation Companies, whilst the presentation was underway the co-accused would
be in the yard taking down the fleet vehicle details and forward this to the third accused of the syndicate who would then submit fraudulent claims using this information.

In most instances the client handed over policy numbers to the accused allowing them to claim for fitments on the vehicles. The client will only find out about the claim when the policy was up for review.

The accused sold his invoices to a ceding agent that would submit a claim to the insurance company involved; this company would then pay the accused for the invoice on a lower rate and would then wait for the payment to be processed from the insurer.

The family of five appeared in the Boksburg Regional Court on the 13 June 2012 for their first appearance however the case has been postponed to the 11 July 2012.

We will advise of any forthcoming updates as we anticipate further savings.

In recent developments, the accused in the Transformer case facing charges of Fraud and Tax evasion have appeared in the Pretoria Regional Court on the 4 May 2012. The syndicate operating in the East Rand area have been released on bail, bail was set ranging from R1 000 to R25 000. To date six arrests have been made with one still outstanding. The case has been referred to the Pretoria Commercial crimes court. The defence has since asked for more time to review documents and the case has been postponed to the 7 August 2012.

There is at present yet another scam in place, that is succeeding in the defrauding of medical aid schemes on a grand scale, using different methodologies. This scam takes into account a select few medical aid schemes, the initial acceptance into the scam will only be qualified by an existing policy holder who is already claiming within the scam. The manner in which defrauding occurs is when the policy holder (usually a practitioner from the medical profession) gets a family member, friend and or associate to stay in hospital with their details whilst they continue to work.

In the second scenario, hospitalisation is arranged by an individual who is for our intent and purposes labelled as the initial point of contact. The initial point of contact arranges the hospitalisation and networks with the doctors involved. The letter of admission is then collected at the doctor’s room or left at the hospital reception for the policy holder to collect. The policy holder then goes to hospital and is admitted for the requested number of days. The doctor claims for hospital visits that are never or seldom conducted. In addition to the above, the hospital account is paid by the respective medical aid scheme and the client submits a claim to the insurer with all the relevant medical and hospital records including the doctor’s letter of motivation. If the claim meets the insurers claim requirements – after investigation / medical referral, the claim is paid.

In the third scenario, stolen medical records on incidents of snake/dog bites; reports of patients falling from ladders and or records of gunshot wounds are resubmitted to hospital cash back underwriters fraudulently. These claims are submitted with differing patient information and or contact details but are usually linked using cellphone numbers that appear on similar hospital claims.

All of the above information is freely communicated in the medical and health environment and appears to have entered the public domain at a rapid speed.

Fraudline
In May 2012, 20 reports were received of which 13 reports were for the short term insurance industry, 1 reports were received for Brokers ,6 reports for the life industry and no report for Legal Wise.
Since 2002, 27349 reports have been received of which 1047 reports were for the short term industry 142 reports for the brokers and 421 reports were for the life industry.
For further information on the statistics, please contact
Yugeshree Mankum yugeshreem@saicb.co.za

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