Fraudsters will be the death of us: funeral policy scam leaves KZN teachers fuming

A Pinetown teacher is racing against time to prevent almost R700 being deducted from her next salary for a funeral policy she didn't take out.

Thabile Ndlovu is a victim of a syndicate that has hit the KwaZulu-Natal education department, fraudulently deducting monthly contributions from teachers’ salaries for Avbob funeral policies.

The syndicate scores a commission on each policy application.

Ndlovu, who teaches at Bahlebonke Primary School, discovered the deductions last month.

“I called Avbob to find out about this fraudulent deduction. They requested that I come with a payslip, ID copy, affidavit and bank statements for a refund. I submitted these documents. I still have not received my refund,” she said.

Ndlovu has not heard from the funeral insurance company again.

“My next pay date is the last day of the month. I’m so worried that they might deduct my money again, because they said they are still processing [it] and they have lot of cases.

“This has affected me a lot, because the money that was taken was needed for my household expenses. My husband is unemployed. His business fell apart due to the [Covid-19] pandemic. I have to take care of my two children and husband. All the bills come to me. I had to drive back and forth looking for the documents they requested, and called non-stop. This has cost me,” she said.

Marlene Jacobs said her son, a teacher at a Durban school, and several of his colleagues noticed that R425 had been deducted from their salaries for Avbob policies since February last year.

“Someone in the education department is no doubt in on this. Sadly, going the legal route can be expensive on a teacher’s salary,” Jacobs said.

Government salary slips have everything that a fraudster needs to submit an application. That’s the starting point.

—  Megan Govender, Asisa

After a four-month fight, Amanzimtoti teacher Princess Mhlanga received a refund after four deductions of R402 were taken from her salary.

“After exhausting fights, an agent from Avbob visited my school for a presentation. I poured all my anger out on him, knowing it was not his fault, but I felt it was something done by his colleagues, working together with people from human resources. I asked him to show my signature where I authorised these deductions. Finally, in April, my money was in my account.”

Avbob spokesperson Marius du Plessis said the company has noted a significant increase in the number of complaints related to fraudulent activities and unauthorised premium deductions.

“We have conducted intensive investigations on the affected policies, and found that the vast majority of the unwanted policies, which resulted in unauthorised premium deductions, emanated from some brokerages and their agents.

“This points to a carefully orchestrated and organised syndicate that has infiltrated brokerages, and is perpetrating these crimes, targeting mostly government employees. This syndicate appears to obtain confidential information from salary slips of government employees’ databases, and have used these salary slips with fake identity documents to apply for policies with insurers.”

Du Plessis said appropriate action and sanctions were instituted against the implicated brokerages and their agents, and the cases were reported to the Financial Sector Conduct Authority (FSCA).

“We have seen a significant drop in the number of fraud complaints as a consequence of these actions. It is clear that the issue has been addressed and our measures have been effective. However, there are still policyholders who may have been affected whom we have not yet reached. We will continue to reach out to ensure all potential cases have been identified and rectified.”

Megan Govender, convener of the Association for Savings and Investment SA (Asisa) forensics standing committee, said this type of fraud is common in SA.

“It is largely due to the fact that the intermediaries have access to salary slips. It’s organised crime. They approach someone in the salary department and obtain salary slips. Government salary slips have everything that a fraudster needs to submit an application. That’s the starting point.”

KwaZulu-Natal education department spokesperson Muzi Mahlambi said affected teachers must approach the salary department to stop the deductions.

“We will investigate. Our security management team is working on the matter. Deductions can’t just jump into the computer. Someone punches them in,” he said.