A Dunedin adviser has been convicted of tombstoning – submitting insurance applications in the names of dead or fictitious people to claim the commissions – and is awaiting sentencing.

His name is suppressed.

Another person was picked up by police at the airport and at least two more are being investigated.

The advisers were dealing in Partners Life products but Ballantyne said in most cases more than one company was involved.

Ballantyne said the victim was the insurance company. “They pay out commissions on bogus policies.”

She said most had systems to pick up false applications. Things such as multiple applications with the same address or bank account, a client who could not be contacted, or had no phone number, or lots of cleanskin applications with no health issues could be a red flag, she said.

“We have processes to pick that up reasonably quickly. Often they’re doing it with a number of companies. There is no client victim like there could be with replacement business issues but everyone pays for it. It’s not good for anyone. We always call the police when we can prove it.”

Ballantyne said people would get desperate, such as in situations where they had a clawback debt to the company that then reduced their new business commissions, causing their income to drop significantly.

"They think ‘I’ll just do it once or twice to get me through that’ but once you start it’s a slippery road. You can only pay the premium for so long before it becomes uneconomic and they start to fall off and end up with a bigger debt.”