Insurance zombie problem

Identity app launched to stop fraud

THE walking dead wander among us; they live and breathe and try their damnedest 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 pandemic, 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 false death claims – where I am claiming on my granny but she is not really dead... she is hidden away in some remote area,” said Garth de Klerk, chief executive of the Insurance Crime Bureau, a non-profit company dedicated to fighting organised insurance crime and fraud.

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

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.

A faked death certificate, said De Klerk, could be bought for R500.

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

However, the counter-fraud industry might now have found the perfect weapon to slay the walking dead. On Wednesday the SA 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,” said Manie van Schalkwyk, a former director of SAFPS

Initially, Covid-19 caused a twothirds drop in fraud cases.

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

The Association for Savings and Investment SA also noticed an increase in scams.

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

The scams are related to Covid-19 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 said.

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