AIDS Victims Targeted by Insurance Fraudsters

July 29 - A worrying phenomenon has been noted in South Africa, especially in the KwaZulu-Natal region, of insurance fraudsters targeting AIDS victims by taking out life insurance policies in their name and cashing in on their deaths.

A particularly gruesome case of insurance fraud was brought to light this week of a syndicate that targeted a twelve year old boy who is suffering from AIDS/HIV. The child, whose parents have both died, was taken in by the neighbors to be cared for.

Eastern Cape life insurance investigators became suspicious when they saw that no less than 30 insurance policies had been taken out in the child's name, mostly by people who had no insurable interest in the boy. South African law dictates that only certain people may take out life insurance against someone else, and most certainly not shebeen owners against a 12 year old AIDS victim, as was seen in this particular case!

If they had been successful, the insurance fraud syndicate would have managed to earn up to R250,000 in payouts on the child's death.

Another case that was published recently was that of a social worker who rounded up the names of 75 AIDS/HIV patients in her community and took out life insurance policies in their names. What is more disturbing is that the woman had managed to defraud the insurance companies successfully in 34 of the cases before she was caught.

Investigators say that the KwaZulu-Natal area is particularly prone to insurance fraud because of the rural nature of the area and the poverty of its inhabitants.

The Chief Executive Officer of the Life Officers' Association, Gerhard Joubert said: "Not only is it much more difficult for life companies to verify and investigate claims in these areas, but in addition, funeral and entry level policy sales volumes are also the highest in these provinces."