Migrants 'defraud' insurers

New immigrants are crashing cars deliberately or arranging to have them stolen and then claiming insurance to supplement their incomes, says the Insurance Council.

Some are also said to be ripping off health insurance companies by making false claims totalling millions of dollars.

The "massive" frauds are now topping $150 million a year in losses and show no signs of abating, the council's chief executive, Chris Ryan, said yesterday.

Cases had started coming to light about two years ago in areas of high immigration, especially Auckland.

One claim for $10,000 had ended up involving 90 people following suit as the deception became more organised and the ringleaders more familiar with the way the insurance industry worked, he said.

At present investigators were examining several separate rackets to the tune of about $500,000 each. Details would be given to the police.

Mr Ryan said groups of people working together were connected by community, shared name, telephone numbers, ethnicity or neighbourhoods.

"A number of these schemes involve citizens who appear to believe that insurance fraud is a way of increasing their income while they are here in New Zealand, possibly on social welfare and awaiting final residency status," he said.

"In some parts of the world it is almost deemed acceptable to defraud insurance companies and some of that behaviour is now becoming prevalent in some of our new immigrant communities."

He cited the Middle East, the Indian subcontinent and some - but not all - parts of Asia.

The culprits usually came from cultures with traditionally dominant and influential family leaders, mainly male, who found themselves with significantly diminished status and reduced economic circumstances in a new country.

They were often good people who were drawn into organised fraud by criminal experts tempting them with the offer of extra money, said Mr Ryan.

The cheating included buying cheap cars, often already damaged, then arranging for accomplices to steal or crash them. An insurance claim would be made for a new car, with others in on the scam acting as witnesses collaborating in the lying.

"They need to understand that if you do go defrauding the insurance industry there will be consequences," he said. "It is not a victimless crime."

New migrants were not the only ones involved in fraud but, on a per capita basis, their numbers were disproportionately high.

"These people undermine the entire fabric of the insurance system here, driving up premiums and costing all honest insured New Zealanders large amounts of money through their deceit," said Mr Ryan.

The Insurance Council was looking at ways to assist immigrants on insurance matters. In many other countries, people were not widely insured and some newcomers did not care if they lost their protection in New Zealand.

They failed to appreciate that in a modern economy they would strike problems if, for instance, they wanted to buy property.

Cost of rip-offs

* The Insurance Council says insurance fraud now tops $150 million a year and is becoming more prevalent.
* A disproportionately high number of new migrants are allegedly involved.
* Schemes include intentionally crashing cars or having them stolen, and buying cheap, damaged cars then claiming insurance for new vehicles.
* Health insurers are also being targeted, with visits to doctors for fake maladies.
* In a survey, 12 per cent of New Zealanders declared they were aware of someone who had made a false or exaggerated claim to an insurance company.