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Beware – Insurance scams are on the rise

13 December 2022 Hollard

Insurance policyholders are advised to familiarise themselves with the latest insurance scams and take proactive action to protect themselves from falling prey to fraudsters who are always lurking in the shadows, determined to rob them of their hard-earned money.

According to Hollard the outbreak of COVID-19 triggered a spike in fraudulent activities and noted that this time of the year always sees a rise in unscrupulous schemes as many people let their guard down as they get busy with festive season plans.

Outlining some of the insurance swindles consumers should be wary of, Hollard says there has been a steady increase in insurance sales and claims scams over the past few months.

Insurance sales scams refer to a customer applying for a loan and is requested to make a deposit into the scammer’s bank account. The scammers claim that the deposit is required to conduct background checks in order to process the client’s application. The unsuspecting customer is then lured to a website purporting to be an official insurance website, where they then divulge their bank account details.

Another scam occurs when a policyholder lodges a claim with an insurer and is contacted by a caller who claims to be an employee at the insurance company. The client is informed that there are additional benefits that have accrued to them. Unsuspecting policyholders are then requested to confirm their banking details, which are used to defraud them.

Hollard has cautioned people to be on the lookout for recruitment scams, where job seekers are requested to share their CVs and duped into depositing money into the fraudsters’ bank account under the pretext that the funds will be used to conduct background checks.

Policyholders and would-be job applicants can take a few practical steps to protect themselves against such scams.

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. Hollard will never ask customers to share their banking details over the phone or ask them to share their CVV numbers. Secondly, Hollard strongly encourages policyholders not to click on any suspicious links, whether on their laptop or on a cell phone, as these links are used to intercept their personal information in order to defraud them.

Equally important, if asked to share your banking details over the phone with anyone claiming to be an insurance agent, call your insurer directly to verify the authenticity of the call, or alternatively use the anonymous hotline to report fraudulent activities.

Hollard warns that fraudsters are very active on social media platforms and unsecured public Wi-Fi networks are vulnerable spaces where scammers constantly lurk.

The insurer advises policyholders to desist from sharing personal information on social media platforms or doing sensitive transactions on unsecured public Wi-Fi networks, as such information can easily be intercepted.

The outbreak of COVID-19 accelerated consumer adoption of digital platforms to transact. This increased use of contactless platforms has created fertile ground for fraudsters.

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 question now is not whether it can happen to you, but rather when and how? Therefore, 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.

According to an analysis in Forbes, cyber-crime cost businesses in the United States more than $6.9- billion in 2021. Figures from the Federal Bureau of Investigation put losses due to business email compromise attacks to over $43 billion since 2016.

The South African Banking Risk Information Centre (SABRIC) notes there has been a worrying trend of a rise in cyber-crime in South Africa as well. It estimates that South African businesses lose about R250-million each year due to phishing attacks and internet fraud. The South African Reserve Bank (SARB) also identified cybercrime and emerging technologies as growing threats to South Africa’s banking sector.

One of the common tricks that fraudsters use is social engineering, where they duplicate emails and then send them to unsuspecting customers who are scheduled to make a payment, instructing them to make a deposit into an alternative account. Often the fraudulent mail will only differ by one digit, which may not be easily detectable. The fraudsters will then request the unsuspecting customer to click on a link that is embedded with malware, which then gives the fraudsters access to the customer’s device as soon as they click on it.

The insurer warns customers that fraudsters are constantly on the lookout to intercept communication between brokers and clients, and target email traffic with specific words such as invoice, payment and banking details. The onus therefore is on the policy payer to ensure that they have the correct creditor’s details before they make 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.

Report suspicions of Financial Crime & Fraud, Non-Compliance & Unethical behaviour to the Hollard Tip-Offs Line. Toll Free: 0801-516-170 or Email: hollard@tip-offs.com

Confidentiality is guaranteed. Don’t support it, report it!

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