Funeral parlour slapped with R50 000 for defrauding bereaved family

A once trusted undertaker, Alpha Star Funeral Services, has been slapped with a stiff fine for claiming from a funeral policy on behalf of a family but failed to give the money to them, even though another funeral parlour carried out the services.

According to police reports, the face behind Alpha Star, Jacob Veldman (40), was hauled to the Oudtshoorn Regional Court by the bereaved family after they claimed that he received payments for policies that were never backed by necessary documentation or licences.

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Also, the family said Alpha Star Funeral Services did not carry out any of the services required, but that a secondary service provider, independent of Alpha Star, did.

Scope of deception

The full scope of the deception became clear when the company didn’t fulfil its duty to pay out a policy valued at R10 000.

Police spokesperson Warrant Officer Zinzi Hani said this left the mourning family without both emotional and financial support.

She confirmed that the company was found guilty of contravening Section 7(1) of the Financial Advisory Intermediary Act 37 of 2002.

“Veldman was convicted of fraud by the Oudtshoorn Regional Court on Monday, 21 August,” she said.

The court asked Veldman to pay back the R10 000 owed to the family, and to pay a substantial fine of R50 000. The fine would be suspended for a period of five years, provided the company met the R10 000 payment by 15 September 2023.

Community vulnerability during bereavement

Meanwhile, the recent sentencing has not only shed light on Veldman fraudulent practices but also sparked discussions about the vulnerability of the community during their time of bereavement.

In a media interview, Liezel Gordon, team lead of client engagement at Metropolitan GetUp, stated that due to the significant expenses frequently linked with burials, funeral policies have become the most prevalent segment within the nation’s insurance industry.

She said that according to the Financial Sector Conduct Authority, among the 60% of South Africans who possess at least one insurance product, the largest portion (41%) mainly consists of individuals holding funeral policies.

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Gordon stated that considering its size, it should not be unexpected that the sector is vulnerable to manipulation by unethical entities.

Western Cape Hawks head Major-General Mathipa Makgato commended the authorities involved in helping the family get their money back but emphasised the need for heightened vigilance from the community when dealing with financial advisors and institutions, especially during vulnerable situations like that of bereavement.