January 28, 2019

The Mt. Everest of scams: Travel insurance companies crack down on helicopter fraud

Insurance companies have issued an ultimatum against fraudulent trek operators and helicopter companies in Nepal.

Last week, international insurance companies cracked down on an increasingly big problem in Nepal: helicopter rescue scams. 

Fraudulent rescue operations have been a multimillion-dollar thorn in the side of travel insurance companies for years, and now insurance companies are threatening to discontinue travel coverage in Nepal.

So, how does the scam work?

A Nepalese crime ring of trek operators, guides, and helicopter companies defraud Mt. Everest trekkers by subjecting them to unnecessary evacuations.

Tour guides take advantage of trekkers by leading them down challenging trails away from towns and cities — sometimes going as far as spiking their food with baking soda to give them diarrhea.

Then, when trekkers are disoriented and pooped (in every sense of the word), guides order unnecessary evacuations that cost as much as $40k — saddling insurance companies with huge bills.

Insurance companies are sick of paying the bills

From January to August of 2018, there were 1.6k helicopter evacuations in Nepal. But, according to last year’s investigation, 35% of them were fraudulent, at a cost of $4m to insurance companies.

Now, a collective of 23 different insurance brands (which covers 100k travelers every year) issued a letter to Nepal’s minister of tourism saying that they will stop insuring travelers to Nepal if the fraud continues — and they are peeeeved.

“To be clear, this is an ultimatum!” wrote a representative of the insurance companies. “If our clients stop issuing travel insurance policies in Nepal… this will have a devastating effect on the tourism industry.”

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