Basic rules for protecting yourself against insurance fraud

As more South Africans prepare to enjoy the festive season, it is important that they remember to not overspend so their debit orders can be honoured but also to be alert regarding suspicious transactions. Here is what every South African needs to be aware of as a client or potential client of an insurer:

Buying insurance products 

• The representative, agent or broker you intend to buy insurance from, should always provide proof that they are acting on behalf of an authorised financial services provider, also known as an FSP. Clients can confirm on the website of the Financial Sector Conduct Authority (FSCA), whether the company they intend to buy the insurance product from is authorised by the FSCA. The FSCA is responsible for authorising financial services providers. 

• The representative, agent or broker must be accredited to sell the particular product offererd by the insurer that underwrites the policy, and they should be able to produce an accreditation letter from the insurer to prove this. 

• If you are not familiar with the company offering you an insurance policy, the website of the Prudential Authority (PA) contains a list of licenced insurers. The insurer that underwrites the policy must be a registered or licenced insurer. 

Phishing for personal information 

Phishing attacks are designed to obtain the personal and banking details of unsuspecting people. They remain an ever-present threat and consumers should always be weary of suspicious e-mails or SMSes. 

It is not usual for insurers and banks to send an SMS or e-mail to instruct clients to click on a link to provide their personal or banking particulars. If in doubt, clients should rather contact their insurer or bank to verify the authenticity of any messages received before clicking on any links.  

• Do not assume that suspicious SMS notifications are a true reflection of transactions made on your policy or bank account. Confirm transactions with your insurer or your bank.
• Do not feel under pressure to make a decision on the spot even if you are contacted by somebody who poses as a representative from your insurer or bank’s fraud department. 

Consumers are encouraged to remain alert during the festive season, and make the effort to contact their insurer if they suspect suscpicious activities regarding their insurance policies.

Financial Sector Conduct Authority: https://www.fsca.co.za/fais/search_fsp.htm

Prudential Authority: https://www.resbank.co.za/en/home/what-we-do/Prudentialregulation/insurers-list