Vehicle Crime and Fraud an Economic Disaster for the Insurance Industry 28 July 2014 Hugo van Zyl
Background Non-profit Company incorporated in 2008 The only entity mandated by the short-term insurance industry to enable collaboration and facilitation in addressing organised crime and fraud prevention on behalf of the industry Facilitate member company, stakeholder and government agency collaboration The insurance industry joins hands against organised crime The place to go to unite against crime Nodal point for many government agencies
Vision To be the fusion centre and leading authority on fighting organised crime in the insurance and assurance industries Fusion centre: Organised crime: Insurance: Assurance: A multi-agency, multi-jurisdictional information-sharing organisation When an individual or group commits fraud or perpetrates a crime against one or more insurance companies. This would include a habitual or multiple claimant using an elaborate scheme to defraud a single or multiple companies Short-term insurance - home, content, all risk, vehicle and commercial Life, funeral and hospital cash back plan
Members
Stakeholders Business Against Crime South Africa (BACSA) South African Insurance Association (SAIA) South African Police Services (SAPS) General Moonoo Directorate of Priority Crime Investigation (DPCI-HAWKS) National Prosecuting Authorities - Asset Forfeiture Unit (NPA-AFU) (MOU in place) Gauteng Department of Roads and Transport (GDRT) (MOU in place) Road Accident Fund (RAF) (MOU in place) South African Revenue Services (SARS) (MOU drafted) National Department of Health (NDOH)
Stakeholders Tracking companies such as Tracker, Netstar and Tracetec Micro dotting companies such as Datadot, Recoveri Dot and iddots Vehicle rental companies such as Avis, Budget and Europcar National Association of Automobile Manufacturers Association (NAAMSA) Vehicle Crime Committee South African Banking Risk Industry Council (SABRIC) Short-Term Insurance Data Exchange (STRIDE) Financial Services Board (FSB) Financial Intelligence Centre (FIC)
Stakeholders Southern African Regional Police Chiefs Cooperation Organisation (SARPCCO) International Association of Auto Theft Investigators (IAATI) Association of Certified Fraud Examiners SA Chapter (ACFESA) South African Fraud Prevention Services (SAFPS) Insurance Fraudline (example) South African Development Community (SADC) TransUnion Salvage dealers such as SMD Zonke Unicode, and many others
Data All law enforcement agencies work in silos Data, data sharing and data quality is a challenge Data is key success Quality data and sharing of data leads to identification of cross carrier and organised fraud and crime Need to share data across boundaries: Criminals are working together, but we work in silos If no ID number, engine or chassis number! WHO AND WHAT DO YOU INSURE??
Using the Data ID no Case no Tel no Bank acc no Claim type Claim detail Stolen items Data core Policy detail Known criminals Cloned vehicles SP blacklist Fraud Framework
Using the Data
Ghost
Ghost
Background on Vehicle Crime in South Africa 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Theft 86298 80226 75968 71776 64504 59097 58370 Hijackings 13599 14201 14915 13902 10627 9475 9990 Total 99897 94427 90883 85678 75131 68572 66360 Domestic Market: 60% (39816) - R 3 085 740 000 Cross Border: 30% (19908) - R 4 977 000 000 Chop Shops: 10% - R 514 290 000
Current Vehicle Fraud Trends / Patterns Theft and hijacking of vehicles, trucks, trailers, cargo and yellow metal. Why? House robberies: New trend Accident staging: Huge increase (phantom passengers) Hoola Hoops Chop Shops / Panelbeaters Cloned Vehicles Service Provider Fraud (SAIA) Staff Dishonesty (SAIA)
Chop Shop
Cloned Vehicle
Current Vehicle Fraud Trends / Patterns Cont. Jamming Devices Ladies of the Night Dealerships and ABRs Social Media Third Party Claims vs. Phantom Passengers (RAF) False licence and roadworthy certificates (Accidents) False international drivers licence as well as false passports and ID documents (Accidents) Cross border crime: Mozambique
Cross Border Crime
Borderline
Kozi Bay
Motor Initiatives Training: Member Companies, SAPS, SANDF, SADC countries, Borderline, Border Posts Cross border operations Cross border pound clean ups: Lesotho, Mozambique, Swaziland National pound clean ups (Gauteng)(Unin:60m/Ins:46m) Disruptive operations: Chop shops, vehicle testing stations Cloned vehicles: Act as nodal point (Unin:10m/Ins:6.6m) DOT: Audit / Inspection and Training (MOU) ANPR: Hit Reports (Ins:16.5m) Project Driven Investigations Blood Alcohol Results Provincial Vehicle Crime Forums / NVCF
Swaziland Pound
Motor Initiatives Target Driven Investigations Repatriation of Vehicles (Lesotho / Mozambique)(MOU) RAF (MOU) and 3 rd party accident project (phantom passengers) Bait car Accident staging Commercial Insurance: Truck / Trailer / Cargo and Yellow metal National Salvage Register National line of reporting crime (Sec 34 (2) of the P.P.C.A. Act) Admin marking of Code 4 vehicles Service provider dishonesty register Staff dishonesty register
SUCCESSES Every case investigated with SAPS/NPA are project/target driven Testify aggravating circumstances 16 cases to court, 100% conviction rate Stanley: 8 years effective imprisonment Cases in court: 18 to the value of R46.2 million Cases under investigation: 30 to the value of R58 million Projects under investigation: 10 to the value of R74.5 million Total saved for member companies: R 114 million Total saved for uninsured: R70 million
Thank you: Questions Hugo van Zyl Director South African Insurance Crime Bureau +27(0)82 602 2721 hugovz@saicb.co.za