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How rogue lawyers, insurers steal from accident survivors

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Thousands of accident survivors and victims’ relatives are holding onto hollow hopes of compensation by insurance companies, as a cartel continues to steal their cash in a fraudulent scheme masterminded by rogue lawyers and insurance insiders.

Law firms in collusion with employees of some insurance firms have crafted a racket that leaves the claimants and their lawyers pursuing cases in court long after the claims have been processed and handed to the wrong people. The fraudsters are fleecing insurance firms of millions of shillings in fake claims.

Once a claim has been filed in court, the insurance insiders collude with the lawyers representing the insurer to make a fake change of advocates and slide it into the claim file. The new advocate then pockets the hefty compensation supported by a fake judgement and award which the survivor, their lawyer and even the presiding judge has no idea about.

The real case then proceeds through a slow process and the claimant only realises they have been chasing the wind when they present the claim to the insurer, usually when it is too late. Several insurance firms have fallen victim to the lawyer-aided fraud, with some becoming claimants in cases they have no idea about and giving heavy kickbacks to legal officers in insurance firms.

Underwriters who spoke to the Sunday Nation in confidence said some firms have lost as much as Sh50 million to the fraudsters in one year.

Jubilee Insurance Kenya, which has identified the rogue law firms and its staff involved in the scheme –  and sealed the loophole – said the fraud is not easy to detect because the real claims sometimes come three years late and the files can be mutilated.

Jubilee’s head of security, fraud and investigation Kiplimo Kebenei said the firm has had about 25 cases, all discovered after execution, within three years.

“We noticed the trend where victims were presenting judgements to ask for compensation          in cases that we had settled long before. Now, we have a rigorous process for verification of all court judgements and we have a maker/checker process to ensure no individual can perform a role from beginning to end. This means that the starter of a claim cannot handle it to completion. It will get approval from a different person, a more senior person or supervisor,” Mr Kebenei said.

The firm paid out Sh19.5 million to fake claimants assisted by a legal officer who had registered a law firm to be used in receiving the quickly processed claims.

 The officer, who was sacked from the firm, is said to have been leading a flashy lifestyle with high-end cars and a classy apartment on Kiambu Road.

Some cases receive double payments, with both the fake and the real claimant being handed cheques sometimes a year apart. But in many cases, the fake claims are higher than the actual award.

In one such claim in Civil Suit No 626 of 2015, Jubilee paid Sh345,220 more than the genuine court award of Sh600,000 in November 2016, one month before the judgement.

The firm had relied on a fake notice of change of advocates and paid a law firm that had played no role in the court process, according to investigation documents seen by the Sunday Nation.

Several stakeholders expressed shock at the web of fraud, with the survivors waiting for as long as six years to be paid only to realise that they have been waiting for nothing.

Association of Kenya Insurers chief executive Tom Gichuhi termed the news of the racket “shocking”.

“It’s a well-orchestrated scheme with sometimes an emotional play of a victim almost dying and a judgement handwritten to imply the urgency. The fastest ones are toned down to just a few hundreds of thousands and, in a month or so, the real judgement comes out, then a second cheque is written.

“Many underwriters are not aware about this scheme, but it is among the loopholes through which money is siphoned from insurance firms,” said a senior manager in a leading insurance firm.

The manager also accused the Insurance Fraud Investigation Unit under the Insurance Regulatory Authority (IRA) of laxity, noting that some of the cases were reported as far back as 2017 but no action had been taken.

Efforts to interview IRA officials have not born fruit since November last year.

The unit, formed in 2011, is said to have little capacity to handle the rapidly changing fraud tactics despite being funded by the insurance firms.

But IFIU head Ndumba Thangalani said the regulator has elaborate mechanisms to address claims from people who have not been properly compensated by the underwriters, hence the courts should be the last resort.

“The cases should pass through IRA when a company refuses to honour a claim within the consent period. There is a consumer protection department and even a tribunal to hear complaints, beyond which one can go to court. The IRA can even sanction the insurance firms when they fail to honour their obligations, so I don’t quite understand how the many cases ended up in court so quickly,” Mr Thangalani said.

Fraudsters have been taking advantage of the weak investigation units and lack of data sharing among the players to mint millions through fraud, which is now gobbling up 35 per cent of the insurance industry’s income, according to the IRA. Medical claims are the most prone to fraud, followed by motor insurance.

Official data shows that insurers declined 10,690 claims in the quarter to September 2019, with insiders saying fraud was a major contributor to the decisions.

by nation.co.ke


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Business

Bodaboda chama grows into a multi-million shilling housing cooperative

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A journey of a thousand many miles starts with a single step. A Nakuru-based bodaboda operator’s self-help group proved this in its growth. Driven by the ambition to have something to take home once they couldn’t ride any more, ten bodaboda operators from Barut, Nakuru West in 2015 formed Kianjahi Group, pooling a minimum savings of Sh100 per week per person.

“Being a bodaboda operator is a risky job and has serious effect on one’s health especially if you don’t dress properly for the cold. After attending a seminar in Machakos we decided to start making savings,” said Benson Sigei, the group chairperson.

The group grew as more members joined in 2016. After evaluating their progress, the members increased their weekly savings to Sh200 and eventually to Sh1,000.

“Before the year ended we were nearly 100 members. Our savings were growing and we had to come up with plans which some members considered as too ambitious and pulled out,” says Sigei. With savings of nearly Sh2 million, they bought a 1.6-acre piece of land which was previously a sand quarry.

“It cost us Sh2.1 million in buying the land and rehabilitating it to usable standards. We embarked on making savings for constructing houses which would be of similar design,” he said.

To make this possible they converted the group into Kianjahi Housing Cooperative Society Limited and introduced Sh15,100 registration fee and minimum share capital of Sh60,000 payable in Sh500 weekly instalments.

AmpThe group started the construction of two-bedroom houses in a gated community model.

“Every member now contributes a minimum of Sh1,500 for savings every week. Those yet to clear their share capital make an additional payment of Sh500. This amount does not exert great pressure on the riders since the majority make nearly KShs1,000 per day.

The group then started the construction of two-bedroom houses in a gated community model where four houses sit on every 50 by 100 feet plot. The cooperative completed the construction of the first 50 units majority of which have already been occupied.

“We took a Sh15 million loan and in addition to our savings we bought an additional acre of land at Sh2.1 million. In the first phase, we have constructed 52 housing units. 35 members have already moved in,” said the vice-chairman.

The cooperative has bought a third parcel of land on which they intend to set up houses for all members. Members who moved in during the first phase like pay Sh2,000 per month. Sh200 goes to savings and Sh1,800 going towards offsetting the cost of construction. The payment for the houses is spread over seven years.

by Standardmedia.co.ke


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Health

Kenyans Woman Spikes Lover’s Drink, Transfers Sh1.7mn From His Bank Account – police

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A woman has been arrested in the Kenyan coast after spiking his drink, and stealing Sh1.7 million from his bank account.

24-year-old Beatrice Mueni Mbiu had been on the run since September 8 when the incident occurred at a night club in Nyali, Kwale County.

“She took off alongside her two accomplices but we got her,” a DCI detective told Capital FM News, “she will be charged on Monday even as we seek the other two.”

The detective said the suspect had been positively identified by the victim.

According to police, the woman first spiked the man’s drink then stole his phone which she used to transfer Sh1.7 million from his bank account.

Detectives said they relied on the club’s CCTV images and footage to identify and trace the suspect.

Drink-spiking is common in night clubs frequented by commercial sex workers in major towns including Nairobi and Mombasa where they target both locals and foreigners.

-Capitalfm.co.ke


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Lifestyle

Young African boy creates his own ‘ATM’ that dispenses new notes

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Africa is filled with amazing talents, that goes without much debates.

There have been instances where young people have demonstrated unmatchable skills like a Nigerian man who used pencils to create an amazing 3D drawing.

Young Nigerian boy creates his own ATM

The little boy knelt shyly in front of the camera as he demonstrated how his machine works. Photo: Gidi_Traffic
Source: UGC

A video of a young boy has added to the repositories of Africans whose works have found visibility online.

In the clip, the young boy showcased the contraption he made with carton boxes.

When asked what it is, the boy said it an Automatic Teller Machine (ATM).

He demonstrated how it works as new naira notes dashed out of a hole to the floor.

On one hand, he held what looked like the battery that powered the machine.

His creation became known months after yet another Nigerian kid did something similar but with a different body design that mimics the real ATM.

Meanwhile, TUKO.co.ke earlier reported how a 14-year-old Nigerian boy, named Praise Kelechi, showed off his improvisational skill of using cartons to create robots and other superhero costumes.

In an interview with BBC, the boy, while, displaying the Iron Man suit replica he made, said he was worked on it before the lockdown but had more time to perfect it as school was on a forced holiday.

He gave this piece of advice:

“I want to tell the world that no matter how rich or poor you may be, you can still be whatever you want to be and do whatever you want. It does not matter the resources available or not, you can just be who you are.”

by Tuko.co.ke


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