syndicates buy cars in insurance scam

File Photo
File Photo

Riot Hlatshwayo

Riot Hlatshwayo

South African car owners are colluding with local and foreign syndicates in a car insurance scam that costs the country millions of rands.

The scam involves owners secretly selling their bank-financed cars to a syndicate that then smuggles the vehicles to places such as Mozambique.

They use South Africa as a gateway to other African nations, according to police.

Police yesterday confirmed a marked increase in the past 18 months of incidents where owners have connived with criminals to have their vehicles stolen so that they can claim from their insurance companies.

"An average of two cases is reported every week where owners of vehicles seemed to be involved in the whole plan," Captain Leonard Hlathi said.

"We have been forced to tell all motorists intending to cross the border that if they are still repaying the vehicle they must obtain written permission from the financing bank before crossing over.

"Motorists should also be in possession of proof for the vehicle and failing to adhere to this rule will force us to stop them from crossing to another country."

But the police are making some headway in cracking the syndicates and arrested 12 suspects at the Lebombo border post in Komatipoort, Mpumalanga, between Friday and yesterday morning.

They recovered R2million worth of vehicles and one of the suspects was arrested trying to smuggle a truck worth more than R1million into Mozambique.

"The owner of one of the recovered vehicles had not yet reported it stolen when our members recovered it," Hlathi said.

"We believe he might have sold the vehicle to criminals and waited for them to cross the border before he could report it stolen so he could claim substantial amounts of money from the insurance."

Senior Superintendent Mike Mhlanga, based at the border, said the driver of the truck was in possession of false registration documents.

"Members of my staff discovered that the chassis number for the truck and that of the trailer had been tampered with.

"They checked the registration documents and found they were corresponding with the fraudulent numbers.

"But when the engine number was circulated it was established that the vehicle had been hijacked in Bethal last Thursday at about 4am," Mhlanga said.

The suspects are expected to appear in the Komatipoort magistrate's court today.

Several insurance companies could not be reached for comment yesterday.