Insurance Body Urges South Africans to Check Bank Statements

October 15 - The Association for Savings and Investment South Africa (ASISA) has warned consumers to be on the lookout for unauthorized deductions on their salary slips or bank statements.

The call comes after a significant rise in the number of insurance fraud cases, especially fictitious policies issued.

In many cases, dishonest financial advisers will obtain a consumer's banking details and use them to deduct payments for an insurance policy.

While the majority of fictitious insurance policies are from the low income market for funeral policies, this does not mean that higher income groups should not be made aware of the problem.

"While we don't see as many fictitious policies for life and disability cover written at higher premiums, this does still happen." said ASISA CEO, Peter Dempsey.

"The sooner the consumer picks up on it, the quicker the life company can investigate, take action against the adviser and refund the client."

Dempsey reassured the public, however, by saying that most large financial services companies have dedicated forensic departments that will assist with the investigation and prosecution of shady advisors who submit fictitious insurance policies.

"And you will receive a refund of the premiums deducted from your salary or bank account," he said.

Advisers caught in this type of operation are immediately blacklisted and criminal charges are brought against them, said Dempsey.

He said that obtaining personal information was not a difficult act for experienced crooks.

"Consumers often guard their valuable possessions with greater vigilance than their personal information," he said. "A scary thought: A document such as a pay slip or a bank statement can provide an experienced identity thief with enough information to perpetrate fraud in your name."