New immigrants to New Zealand are participating in motor vehicle insurance frauds worth millions of dollars, the Insurance Council claimed today.
Investigators are looking at three single fraud cases worth about $500,000 each, but in total the fraud is worth tens of millions, council chief executive Chris Ryan told NZPA.
Fraudulent schemes allegedly headed by new immigrants involved deliberately arranging motor vehicle crashes and then claiming for insured losses, and buying cheap quality cars -- usually already damaged -- and then having them intentionally stolen or crashed, the council said.
Mr Ryan claimed the frauds involved people who came from parts of the world where organised deception seemed far more prevalent than it is in New Zealand.
Mr Ryan said that other New Zealand citizens were also involved in frauds, which are costing insured New Zealanders millions of dollars a year. But he added: "What we are finding increasingly is that in the areas of organised fraud against insurance companies there is a disproportionately high percentage of new immigrants (involved)."
The insurance industry paid out $670 million in claims each year for cars, of which Mr Ryan said he believed $150 million was in fraudulent claims.
He said fraud was most common among new immigrants who came from a family group with a very strong male figure.
"That male figure has been put in a new community and lost some of the status they had in a previous community. They are approached by criminals who are expert defrauders -- and usually internationally -- and say we can provide additional income for you if you act as part of this fraud."
He said they were usually "good people", but were drawn into the fraud culture through their "loss of status".
Mr Ryan said he hoped those in the traditional system of insurance -- "which is in the European based communities" -- can educate people from new immigrant nations to understand "insurance is about utmost good faith".
"You need to be able to say to your insurance company 'I will tell you the truth' and in return get the payouts they are due."
- NZPA
