Business Maverick

RAF FRAUD CRACKDOWN

Bleeding Road Accident Fund prevents almost R2.7bn in fraudulent claims

Bleeding Road Accident Fund prevents almost R2.7bn in fraudulent claims
(Photo: Unsplash | Road Accident Fund logo)

The Road Accident Fund, which has been bleeding funds for decades, says its forensic investigation department prevented fraudulent claims to the value of almost R2.7bn over the past three financial years.

The Road Accident Fund (RAF) recorded a deficit of R8.43-billion for the 2022/23 financial year compared with a surplus of R428-million for the 2021/22 financial year. Management maintains this was largely due to the fuel levy not being increased over the past two years, during which time inflation shot up to an average of 6.9%.

However, Parliament heard this week that the RAF’s forensic investigation department, with other law enforcement agencies, repudiated 5,333 fraudulent claims over the past three years: 4,172 in 2020/21; 448 in 2021/22 and 713 in 2022/23.

Over the same period, 32 people were arrested – an attorney received the highest censure with a jail term of 12 years. 

RAF chief executive Collins Letsoalo says those arrested included doctors, attorneys, RAF employees, road accident victims and employees of corporate companies who have access to road crash information.

“The types of crimes committed against the RAF include the submission of fraudulent claims, solicitation of funds from RAF claimants for work conducted to assist with a claim and theft of claimants’ funds,” he says.

Seven staff members were suspended between 2020/21 and 2022/23 following internal RAF investigations, while another six employees resigned during further probes or hearings from 2020/21 to 2022/23.

Letsoalo says “hundreds of cases” have been referred to the police following preliminary investigations. These include 449 cases over the past year, 270 in 2021/2022, and 172 in 2020/21.

As reported in Business Tech, the RAF fraud investigations unit is looking into duplicate claims where payments are made to victims, attorneys and sheriffs; procurement and tender irregularities, and payments to service providers.

“Fraud continues to represent a significant risk to the RAF’s assets, service delivery, efficiency and reputation. It robs claimants and dependents of the deceased of their livelihood. It also creates a negative impact on the socioeconomic status of the country. 

“We will continue to vigorously pursue any party – internally or externally – that engages in fraudulent activities or attempts to do so,” Letsoalo says. DM

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  • Geoff Coles says:

    Are not the claims made by lawyers….working perhaps with a few doctors

  • chris Taylor says:

    Maybe, just maybe a new government in 2024 will actually abolish the RAF. If third party fire and theft insurance as a basic was mandatory we would not have a need for RAF or the overpaid cadres running it or the fraud or the theft. Just a low cost basic insurance. All roadworthy vehicles would be then insured. such a move forward and please do not bleat about the poor who cannot afford it. They just need to reduce smoking or drinking and the insurance is paid for. Equally, if they really are poor and have no lease and have an old roadworthy vehicle then the insurance would be seriously low anyway. An introduced means test could even reduce that cost and then we save on the fuel cost as well. What an interesting world we could live in.

    • Paul Hjul says:

      Its not possible to “abolish” the RAF. Essentially the current volume of legitimate claims – before graft – exceeds what the Fund has. Therefore the Fund can only operate by stalling on settling giving the incentives to litigate badly and opportunities for corruption grow.

      A sensible government strategy would be to reform the RAF in three stages:
      Firstly introduce a sunsetting of the current liability of the fund rules, with the effect of ensuring new claims into the RAF are at half of what the funds incoming revenue from the fuel levy will be and re-introducing mandatory 3rd party vehicle insurance. Somewhat ironically (and tragically so) a lot of the bad planning around introducing etolling arose in a context of not wanting to increase funding of roads from fuel levy because of the need to fund RAF. In reality 3rd party insurance will probably end up costing motorists a similar amount to the optimistic average expected to have been culled by etolling. You’d probably have to do province by province roll out.

      Once you’ve got stability in the Fund as a legacy pot and pot of last resort you can start a second stage of getting judicial reform of various claims and the RAF can be given the authority to acquire claims against insurers by paying to the natural persons and by acting as a concentrator in negotiating with private hospitals.

      Finally as the Fund gets solvent it can start taking on responsibility for medical delict by the state – having negotiated pricing. NHI …

  • Nonnie Oelofse says:

    Our claim from 45 years ago was never paid out and I don’t believe it ever will be paid, because of excuses and fraud!!!!

  • Change is good sa says:

    Let’s hope the work being done will eventually wield results for South African road victims. Good leaders within government always seem to be sidelined when they bring fraud and corruption to an end.
    Let’s see what happens to RAF CEO in the future, will some politically connected person trump up some false charges to get rid of someone who wants to do a great job and deliver to the society he serves.

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