The Rise of Express Kidnapping

EXCLUSION OF EXPRESS KIDNAPPING

The following is a communication received from Phishield clarifying why their product does not extend to cover Express Kidnapping.

What is Express Kidnapping?

Express kidnappings are typically short-term abductions where criminals force victims to withdraw money from ATMs or transfer funds via banking apps. These incidents often stem from hijackings or street robberies and are not limited to wealthy individuals, as even ordinary citizens are targeted based on the criminals' assessment of potential financial gain. Unlike traditional kidnappings that might involve a large ransom and extended negotiations, express kidnappings are designed to be fast, with a quick payout and minimal risk for the perpetrators.

 Fraud versus Theft

Phishield’s Loss of Funds products have focused on cyber-related losses as well as authorised and unauthorised funds transfers from bank accounts of policy holders due to fraud. It is sometimes argued that express kidnapping is an unauthorised loss of funds from the insured’s bank account. While the victim of an express kidnapping crime has suffered a financial loss, the loss is not due to fraud. Let us first discuss what constitutes fraud. In South Africa, fraud is defined as:

“the unlawful and intentional making of a misrepresentation that causes actual and or potential prejudice to another”

While this definition is quite broad, the use of the term is in its widest possible meaning and is intended to include all aspects of economic crime and acts of dishonesty. The definition includes four specific elements:

•       Unlawfulness          

•       Misrepresentation                               

•       Intent 

•       Prejudice

All four elements must be present for an event to be fraudulent. An express kidnapping would not meet the definition of a fraudulent event but rather theft. For a crime of theft, the following four elements must be present:

•        Act ofappropriation

•        A certain typeof property

•        Unlawfulness

•        Intention(including an intention to appropriate)

From the above definitions, it can be determined that express kidnappings lead to a loss of funds due to theft.  The victim is often threatened with bodily harm or their life and are therefore induced to provide the criminals with access to their bank accounts which then results in a loss of funds. Criminals force banking customers to disclose their online banking and banking app passwords under threat of violence (duress) after kidnapping and detaining them.  Once criminals gain access, they can alter account limits and make unauthorised transfers, causing significant financial losses in addition to the trauma of the kidnapping itself

Phishield’s Philosophy

Phishield’s products provides cover against intangible assets as opposed to tangible assets. Tangible assets are physical items owned by a business or individual. Intangible assets are non-physical assets that hold significant value for an individual or business. Insurance for intangible assets is more complex because it protects against losses that do not involve physical damage but rather loss of financial value. Phishield’s products will remain focused on the intangible assets losses as opposed to offering extensions that cover tangible assets. Therefore, the Phishield Policy will not respond to Express Kidnapping incidents.

AIB Cape Solutions

There are various solutions to obtain cover for Express Kidnapping for your Business or Family. Contact us today for more information should you require this cover

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