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Deterrence, Brazilian style

The SunNewspapers are atwitter in the U.K. about two British students on vacation who have been jailed in Brazil for allegedly faking a robbery so they can file a bogus insurance claim. The two 23-year-old law school students are being held in a reportedly nasty third-world jail on charges of making a false report of losing $2,500 in cell phones and iPods. Police in Rio de Janerio say a search of the women’s room at a local youth hostel turned up the ‘stolen’ items.

The pair faces one to five years in prison, a stiff sentence that police in Brazil say is needed because of the growing number of fake claims being made by vacationers from the U.K.

Fake claims against travel policies in Europe is big business. Nearly 50 percent of people surveyed a few years ago in the U.K. said such fraud was acceptable for helping to pay for their “holidays.”

But it’s not only insurers in the U.K. that are taking the hit for these losses. A few years ago, NYPD got so fed up taking the time to issue police reports on obviously bogus claims, they started warning European vacationers that they would prosecute these scams. Scarce law enforcement resources should not be dedicated to help facilitate scams for unethical visitors to New York or any other city in the U.S.

Don’t know if the NYPD warning carried much weight, but thanks to tough treatment by the Brazilian justice system, vacationers from U.K. and elsewhere likely will think twice about pulling off this scam.

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