The financially strained Road Accident Fund (RAF) says it has identified bogus claims to the value of R126m made between April and June, notes a Business Day report. The fund said the claims were detected before they were paid out. Of the 108 bogus claims detected, 100 were claims represented by attorneys. The RAF has been beset by financial difficulty and has a provision of R145bn for claims it has yet to pay. It is seeking additional funding from the Treasury to help it meet its obligations.

The report notes that in 2015-16, the RAF detected 612 fraudulent cases with a total value of R423.7m. In 2014-15 the fund identified fraudulent cases totalling R178.7m, and of this, R23.9m had already been paid out.

RAF chief strategy officer Mantiti Kola said a whistle-blowing policy had been put in place for staff to report suspected fraud. There was also an anonymous tip-off line for the public to report fraud suspicions. The report quotes transport economist Andrew Marsay as saying the RAF was not sustainable as it was a ‘safety net’ to catch large numbers of under-insured people. ‘People assume car-based travel is cheaper; however, one of the costs is the RAF bailing out people who are not properly insured,’ said Marsay.

Full Business Day report (subscription needed)

The fund’s only recourse in turning things around was to implement the road accident benefit scheme, according to its chief executive Yolande van Biljon. This would be cheaper and allow for the fund’s cash flow constraints legacy to be dealt with, she said, according to a report in The Mercury. ‘We’ve found a prevalence of more expensive claims, medical inflation and higher registration of claims that we had not anticipated,’ said Van Biljon.

‘Having no increase being budgeted for this year provides us with a level of financial difficulty. In fact, our biggest disruption is the sheriff who can attach any of our assets, including our bank accounts, but we try to do our best,’ she added. General manager of legal, compliance and regulation at fund, Charlene Louw, reportedly said through many commissions over the years, it was realised that the system was inefficient and lacked sustainability and affordability.

Louw said although the likelihood of people getting less compensation was likely with the introduction of the new scheme once it was finally approved, they were not there to make millionaires of people. ‘We are saying we are a social security system; we shouldn’t be making instant millionaires of people. It’s not the way social systems work. You ought to be actually compensating for medical health, funeral support, income support and if there is a deceased breadwinner we would look after the family thereafter,’ she said. ‘Yes, people will receive less, but then more individuals will get to benefit from this service.’

Full report in The Mercury (subscription needed)