Recently, a LinkedIn post went viral in which a woman faked a car accident. She used AI to generate images of her “smashed” car, bruises on her face from her “injuries,” as well as a believable car crash scene and an authentic-looking receipt.
The point of the exercise was to show how difficult AI is making it for the insurance industry to verify legitimate claims. This isn’t an isolated concern—it signals a global challenge for insurers. This is because AI tools like ChatGPT can generate fake images, and such tasks can be performed by anyone.
“There is no doubt that AI is changing the game for insurance and risk professionals,” says Ayanda Mdhluli, Senior Manager: Cyber Security at Old Mutual Insure. “But we are also embracing it as a tool to protect our customers, improve efficiency, and enhance fraud detection. Relying solely on images, especially as AI-generated visuals become more sophisticated, is no longer sufficient.”
Mdhluli says while the concept of AI fraud is still relatively new, there are plenty of fraudulent scams where consumers are either unknowing victims or try to defraud their insurer.
Some common insurance fraud scams include cases where the same damage photos have been used in multiple claims or where photos pulled from the internet are submitted alongside fabricated invoices. “We’ve picked up repeated invoices with headers from third-party suppliers like glass fitment centers or repairers and are starting to see the same invoice submitted across different claims.”
“The second-hand vehicle market is especially prone to scams. We encourage all vehicle buyers to exercise caution and conduct thorough checks before purchasing a vehicle—especially in today’s tough economic environment, where scams from tricksters looking to make easy money are common occurrences.”
Mdhluli emphasizes the importance of being vigilant and conducting thorough research to avoid falling prey to scams in the current economic climate. He provides tips to protect against scams when buying a car and avoid insurance missteps, ensuring a safe and secure buying experience.
- Ask for the NaTIS certificate. This official registration document proves legal ownership. If the car is still under finance, the bank will hold it until the loan is fully paid. Walk away if the seller can’t provide it or explain why it’s missing.
- Check that details match. Make sure the VIN, engine number, make, and model listed on the license disc and registration documents match the car.
- Look out for fake documents. Typos, inconsistent fonts, or poor formatting may indicate a forgery.
- Avoid vehicles with signs of tampering. Damaged locks or ignition systems are red flags for possible theft.
- Steer clear of foreign-registered cars. Vehicles with non-SA number plates or registered in neighboring countries can be difficult to insure.
- Spot gray imports. Features like foreign language labels, headlight wipers, or fender mirrors may suggest the vehicle was illegally imported.
- Request a microdot certificate. This confirms the car’s ID and helps with verification in the event of a claim.
