[LISTEN] 'Rent a dead body' scam costing insurance industry billions
The Association for Savings and Investment South Africa (ASISA) says the insurance industry is grappling with a syndicate that rents out dead bodies to fraudsters looking to make a quick buck from insurance companies.
According to the convenor of ASISA's Claims Standing Committee Donovan Herman, unclaimed bodies at mortuaries are often sold or rented out by criminals and used to falsely lay claims of funeral benefits.
The 2018 fraudulent and dishonest claims statistics, released this week by ASISA, show that insurers have detected ta least 3,708 fraudulent and dishonest claims to the value of R1.06 billion.
A majority of these fraudulent claims were made for funeral insurance.
In 2017, life insurers detected 5,026 fraudulent and dishonest claims worth R1.13 billion.
"A lot of checks are being done but the challenge lies in the fact that are a lot unclaimed and then these bodies are actually stolen from the mortuaries or funeral parlours and trying to pin down one any one person in the syndicate is always a challenge," says Herman.
"The industry is always looking at ways to make sure that these people are brought to book and some of these people are prosecuted. So the industry is take a firm stance on that and where we do trace these guys, action is take."
Herman refuted claims that policyholders are often left to take drastic measures to secure payout from insurers.
"It is quite evident that the insure industry does pay a large amount of claims. If you look at the numbers, more than 99% of the claims have been paid," he adds.