Be wary of these insurance frauds that are on the increase in South Africa

Insurance sales, claim, and recruiting scams are on the rise in South Africa, according to Hollard, with tourists particularly vulnerable since they tend to relax their guard during the holiday season.

The association recommended policyholders to get informed with the current insurance scams and take proactive steps to avoid falling victim to scammers who are constantly waiting in the shadows, ready to steal them of their hard-earned money.

According to Hollard, the Covid-19 outbreak sparked an increase in fraudulent operations, and he added that this time of year typically sees an increase in unethical schemes as many individuals let their guard down as they become busy with seasonal events plans.

Hollard said there had been a continuous increase in insurance sales and claims frauds over the last several months, outlining some of the insurance swindles people should be careful of.

Insurance sales scams involve a consumer requesting for a loan and being asked to put money into the scammer’s bank account. The con artists say that the money is necessary in order to complete background checks on the client’s application.

The unwary consumer is then sent to a website that seems to be an official insurance website, where they are forced to reveal their bank account information.

Another type of fraud is the insurance claim scam, which happens when a policyholder files a claim with an insurer and is contacted by a caller posing as an employee of the insurance company.

The consumer is told that they have received additional advantages. Unaware policyholders are then asked to confirm their banking information, which is subsequently utilised to swindle them.

Hollard also warned people to be on the alert for recruitment scams, in which job hopefuls are asked to exchange their CVs and then misled into paying money into the fraudsters’ bank account under the guise of doing background checks.

Policyholders and job seekers may protect themselves against such frauds by taking a few simple precautions.

“Should policyholders receive a suspicious call or be asked to deposit money into some bank account, Hollard urges consumers to contact their insurer’s call centre or service area directly to verify the legitimacy of the transaction,” the group said

Customers will never be asked to give their banking information or CVV numbers over the phone by insurers.

Second, Hollard strongly advises policyholders not to click on any strange links, whether on their PCs or mobile phones, since these connections are designed to intercept personal information and swindle them.

Similarly, if you are requested to provide your banking information over the phone by someone claiming to be an insurance representative, call your insurer immediately to check the call’s legitimacy, or utilise the anonymous hotline to report fraudulent actions.

Be cautious in social and public places.

According to Hollard, scammers are particularly active on social media platforms, and unprotected public Wi-Fi networks are susceptible locations where scammers continuously lurk.

Policyholders are advised not to share personal information on social media platforms or conduct sensitive transactions on unprotected public Wi-Fi networks, since such information can be readily intercepted.

“Cybercrime has become more prevalent now than ever and is anticipated to increase. Fraudsters are using all kinds of technologies and more sophisticated methods to gain access to policyholder personal information,” the group said.

“It is very important to err on the side of caution by keeping your personal information to yourself and flagging and verifying any suspicious call or activity directly with your insurer. Do not even share details with family members.”

Earlier this year, the South African Banking Risk Information Centre (SABRIC) identified a concerning pattern of an increase in cybercrime in South Africa.

It is estimated that phishing attempts and online fraud cost South African firms around R250 million each year. Cybercrime and developing technology have also been cited as major dangers to South Africa’s banking system by the South African Reserve Bank (SARB).

One of the most prevalent techniques used by fraudsters is social engineering, in which they copy emails and then send them to unwary consumers who are about to make a payment, ordering them to transfer funds into a different account.

Often, the bogus letter will just change by one digit, which may be difficult to identify. The fraudsters will then ask the unwary consumer to click on a link that contains malware, granting the fraudsters access to the customer’s device as soon as they do so.

Customers were advised by Hollard that scammers are continually attempting to intercept communication between brokers and clients and target email traffic with particular phrases such as invoice, payment, and banking data.

“The onus, therefore, is on the policy payer to ensure they have the correct creditor’s details before making any payment. Hollard also advises consumers to verify telephonically with their creditors should they receive an email requesting that they make payment to alternative bank accounts.”