Insurance fraudsters target North Korean refugees

North Korean refugees struggling to adapt to a bewildering new life in South Korea are increasingly getting sucked into insurance frauds as their first taste of capitalism.
 

Insurance scams have for years been common in the South, and in recent years fraudsters have targeted the refugees as sometimes unwitting accomplices.

"Sometimes defectors get involved because they don't know how the insurance system works. They just have no idea what they are doing is wrong," an official at the Hanawon resettlement centre told AFP.

All North Koreans who flee their impoverished communist homeland for the South must spend their first 12 weeks at the centre, which lies about 80 kilometres (50 miles) south of Seoul. It offers job education, information on South Korea and basic survival skills -- such as buying a subway ticket, opening a bank account and using a credit card.

From May it has also offered a new two-hour course on insurance fraud, with investigators from the Financial Supervisory Service (FSS) warning about the possible consequences.

Newly arrived refugees often must repay big debts to the brokers who arranged their escape via China. This makes them susceptible to taking part in frauds, which focus on bogus medical insurance claims.

In a survey conducted by legislator Kim Young-Woo, 66 percent of refugees described their living conditions as difficult. Some 56 percent said their monthly income is below 450 dollars (500,000 won) -- officially deemed to be the lowest sum on which families can manage.