Fraudsters faking accidents to rip off insurers

STEPHENE MUDIARI | NATION Nairobi businessman Paul Ogola narrates how he fell victim to the latest insurance fraud during an interview at Nation Centre in Nairobi.

A new breed of criminals is fleecing insurance companies by faking road accidents, then lodging claims.

The syndicate involves police officers who issue abstracts for phantom accidents as well as unscrupulous garage owners who bill for imaginary vehicle repairs. Corrupt insurance officials then make false reports to facilitate payments.

The architects of the crime don’t own the “accident” vehicles but use cars hired from companies or individuals.

Nairobi businessman Paul Ogola rented out his Toyota saloon car on April 19, 2010 to a client.

“It was around 5 p.m. He (client) signed a contract, I took copies of his driving licence and national identity card then gave him the keys,” he said.

Mr Ogola has his vehicle installed with a hi-tech tracking system to safeguard it against theft.

“I engaged the system at my office the following day and the monitor screen traced my car to Industrial Area. For hours, the signal indicated the vehicle had remained at the same spot. I got anxious because I could not understand why somebody would pay for a vehicle then not use it,” he told the Sunday Nation.

Mr Ogola grew more concerned when he tried to contact the client on his cell phone, but the number was out of reach. When he tracked the car down to a garage in Industrial Area, mechanics there said it had been towed from an accident scene somewhere between Doonholm and Embakasi.

The car had a dent on the front bumper, suggesting the accident was minor, and that it would cost about Sh30,000 to repair. Mr Ogola did not suspect anything fishy until the following day when he returned to the garage to take pictures, as they would be helpful in insurance claims.

“The vehicle was completely different. The bonnet was bent, the dashboard damaged with airbags out, the headlights were broken,” he said.

What he did not know is that the defaced parts belonged to another vehicle and had been fixed on his car, to create the impression the accident was serious.

At the garage, the mechanics had issued an invoice of Sh300,000 to his insurance company.

An assessor appointed by the insurer had filed a report reflecting the extensive damage on his vehicle warranting the money charged by the mechanic.

Mr Ogola reported the findings to Buru Buru police station. He obtained a copy of the abstract and was surprised to find that the driver of his car at the time of the accident was not his client.

Traffic officers told him that after ramming his car, the other driver had sped off. The abstract listed two witnesses – the driver and a police constable attached to Buru Buru station.

Mr Ogola filed a formal complaint to Police Commissioner Mathew Iteere against the officers. The complaint is being handled on orders of the police boss.

Amos Oketch faced a similar experience last September.

“My client sent an SMS informing me of an accident. He asked me to check the vehicle at the garage,” he said. He found his car had its rear bumper damaged.

Two days later, when he went to collect it, he was asked to sign clearance forms showing that in addition to the bumper, the bonnet had also been replaced.

Stealing from insurance Contacted by the Sunday Nation, the Association of Kenya Insurers executive director Tom Gichuhi was taken aback by news of the new syndicate, saying he had not heard of it.

“There are so many frauds devised by people stealing from insurance companies, but this is the latest. It’s strange people can go to that extent,” he said.

Mr Gichuhi told of other ways devised by fraudsters in the motor vehicle industry to milk insurers.

“We have cases where a salvaged vehicle is insured with three companies. It remains at the yard covered with a canvas that ensures it does not rust. So assessors from different companies inspect it at different times without realising it has been there for a long time.’’

‘‘The owner ends up receiving three payments,” he said.

The AKI boss said his organisation would devise a centralised system where companies can access client data to keep fraudsters at bay.

Source: Daily Nation