Durban - Killers, mainly women, play a sinister role in the growing number of insurance fraud cases as poverty takes its toll.
Experts warned that South Africans were turning to crime to put food on the table and the fuel price hike would add to the burden.
Insurance Crime Bureau chief executive officer Garth de Klerk said “poverty-driven” distress was so high that some people, mainly women, engaged hit men to kill, so they could pocket the benefits paid out by insurers.
“People are under extreme financial difficulties and pressure, especially the middle class, and they are resorting to crime and perpetrating fraud because they’re desperate to put food on the table.
“They need to pay the bond at the end of the month, the car payment at the end of the month and they look to the financial services sector for what they can do to abuse the access they have to financial services,” he said.
The most sensational case recently was that Tembisa police sergeant Rosemary Ndlovu who is serving six life terms in jail. Ndlovu’s lover and five members of her family were killed so she could claim insurance payouts.
De Klerk said the Insurance Crime Bureau was a non-profit organisation established by the insurance industry to detect, mitigate and convict insurance-related and physical crime.
In some instances, the fraud they encountered was “simplistic”, such as people wanting a cash payout claiming their insured cellphones had been stolen. However, they often shot themselves in the foot by continuing to use the “stolen” phone.
“They don’t realise there’s a very simple ability to see if that cellphone has been lost or stolen. We can cancel it, we can track it and we can determine whether or not that phone has been stolen.”
He said that in more sophisticated instances of fraud, consumers would sell their vehicles to syndicates and then claim for their “stolen” vehicles.
“Then, we get what we call the more desperate stuff, where people are taking out life insurance policies or funeral benefit policies on their loved ones, and then snuffing out their family members.”
He said there had been a resurgence of a funeral type of fraud in the Eastern Cape where people were taking out “genuine policies” and murdering people related to them. Another example was that of a pastor in George who had eliminated some of his congregants.
Fraudsters were generally aged from 20 to 35, active, desperate, technologically astute and looking for ways to abuse the system, De Klerk said.
The typical textbook definition of a serial killer was a male, 20 to 40 years old and uneducated. The motive was emotional rather than financial.
“We are finding, often, the serial killer profile in South Africa is female, educated with the financial benefits. So, we have to be very aware of the changing profiles.”
He said that on the short-term insurance side, it was usually men who were involved in physical crimes like vehicle theft, hijacking, arson and truck hijackings.
“On the life insurance side, the kingpins behind syndicates are highly educated. Females involved in murder for money types of scams are educated individuals that have sat down and thought this through very carefully.”
Nazia Karrim, of the South African Fraud Prevention Service, said there had been an “aggressive growth” in the volume of fraud in South Africa, with a 36% year on year increase in 2023, while the number of scams had surged by 150%.
She said there was also a 44% increase in the number of money mules because of the desperate financial situation people found themselves in.
“A money mule is someone who sells their actual bank account to a fraudster to be used to syphon funds from a fraud or a scam that the fraudster or syndicate might be perpetrating,” she said
In the UK, which also faced rising energy costs, a declining economy and adverse social, economic and political pressures, more young adults considered fraud.
Research by the UK’s Insurance Fraud Board revealed that one in four young adults said they would “likely” consider insurance fraud if they were struggling financially.
The survey, conducted earlier this year, indicated that in the 18 to 24-year-old category, one in four (27%) said they would think about lying on an insurance application to save money. In the 25 to 34-year-old category, one in five (22%) said they were considering insurance fraud.
Across all age groups, one in 10 people said they would consider making a fraudulent insurance application or claim if they were struggling financially. Nearly two in every five (38%) respondents said they felt financially desperate, specifically due to the impact of the cost-of-living crisis.
De Klerk said that while they did not have specific statistics like in the UK, similar sentiments were shared by South Africans.
“People are desperate, it’s poverty driven, economic related, and they are looking for clever ways to derive benefits from financial products.”
The situation was unlikely to change any time soon, said Macro economist, professor Irrshad Kaseeram.
He said the economy was not absorbing enough people into the formal sector, resulting in massive unemployment of about 32 to 34% in urban areas and between 40 and 60% in rural areas.
“Given all those problems, we have people suffering and hence, the insurance industry is beginning to see the high crime rate. People, when they are unemployed, need to survive and to survive, they find whatever means is accessible to them. One is crime ‒ petty crime and even serious crime ‒ so you are getting lots of thefts and break-ins. Adding fuel to the fire is the cost of living… our inflation rate now is at 4.7% but that’s misleading because it’s talking about the core inflation, without the cost of fuel, energy and food.”
However, the reason why women have emerged as serial killers for financial gain could be attributed to greed, revenge, survival or simply the thrill of not getting caught, said criminologist, professor Nirmala Gopal.
“Women enjoy almost equal socio-political status in South Africa and with greater participation in the economy, they realise that killing family members is an easy way to claim insurance benefits. Of course, they do not commit these crimes expecting to be caught. They probably believe that as women they are less likely to be suspects.”
The Independent on Saturday