According to a report, South Africans are renting and buying dead bodies to scam life insurers.

Business Insider South Africa reports that life insurers had rejected 1,915 funeral claims worth R176.4 (ZAR) million–approximately $12M USD–in 2018, of which 1,127 were found to involve fraudulent documentation.

Some 156 fraudulent claims indicated syndicate involvement, and incredibly, in seven cases, the beneficiaries were found to have caused the death of the life insurance policyholder.

In South Africa, funeral policies don’t require blood or medical tests and pay out soon after the supposed policyholder is deceased.

The lack of rigorous testing of the deceased policyholder creates a tempting opportunity for scammers and fraudsters.

Donovan Herman, convenor of the ASISA Claims Standing Committee, said: “unfortunately, this makes it tempting for criminals and dishonest individuals to take out funeral cover for people who do not exist with the intention of later submitting claims using death certificates issued for dead bodies rented or bought for the purpose of committing fraud.

“If we allow fraudulent and dishonest claims, honest policyholders will ultimately end up footing the bill through higher premiums driven by untenable claims rates.”

According to ASISA‘s report:

South African life insurers detected 3 708 fraudulent and dishonest claims to the value of R1.06 billion in 2018. The 2018 fraudulent and dishonest claims statistics, released this week by the Association for Savings and Investment South Africa (ASISA), show that the total number of irregular claims was lower in 2018 than in 2017, but the claims value remained almost the same. In 2017, life insurers detected 5 026 fraudulent and dishonest claims worth R1.13 billion.

On Death Claims, ASISA went on to report: