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Nepal cracks down after tourists scammed for helicopter rescues

(CNN) Authorities in Nepal are launching a crackdown after it emerged trekking and mountaineering agencies were defrauding insurance companies for millions of dollars by charging them for unnecessary helicopter evacuations from Everest and other mountains in the Himalayas.

According to Ghanashyam Upadhyaya, a spokesman for the Nepal Tourism and Civil Aviation Ministry, the authorities are taking action against 15 companies -- including tour agencies, hospitals and helicopter businesses -- for their involvement in fraudulent activities.

Traveller Assist, a medical assistance company, said its investigations showed that in the first eight months of 2018, there were around 1,600 helicopter rescues in Nepal, at least 35% of which were fraudulent, costing insurers upward of $4 million.

Insurers had threatened to pull out of Nepal, potentially devastating tourism to the Himalayan nation, over the helicopter scams. Companies gave the government until September 1 to take action.

In a statement Tuesday, Traveller Assist Managing Director Jonathan Bancroft welcomed the government's investigation, adding that the "sheer scale of fraud and corruption in Nepal is so widespread that even if a company isn't involved in it, they are well aware that it happens."

A helicopter flies over hikers headed for Everest Base Camp. Companies have been found to be billing tourists for unnecessary evacuations.

'Disregard for human life'

According to Traveller Assist, scams were so widespread that some tourists were even involved themselves, paying $500 for a five-day trek to Base Camp only to take $750 from the tour company to call in sick and request a helicopter evacuation.

"The heli company would pay the trekking company $2,000 in commission, which they make back from the hospital who pays them a commission to bring them foreign patients, who they then over-treat and over-bill the insurer for," Traveller Assist said.

It added that as well as billing tourists for helicopter rides and unnecessary treatment, there were also instances of people having their food spiked with laxatives or given tainted food to cause a hospital visit.

"These fraudsters have a complete disregard for human life," Bancroft said.

Upadhyaya said the investigation uncovered numerous instances of corruption and fraud within the trekking industry, such as making multiple claims for single rescue flights, producing fake bills, billing tourists for unnecessary procedures, and encouraging tourists to request evacuations even if not needed.

"The result of which was the insurance plans were getting expensive and hence, the trip to Nepal. We have now implemented certain policies to bring reforms in Nepal's tourism sector, and provide positive experience for tourists visiting Nepal," he added.

Under the new guidelines, Nepali police will now be involved in all rescue operations, and a cap will be set on flight fares. Hospitals and companies involved in rescues will also have to submit information to the government for inspection.

Danny Kaine, head of assistance for Traveller Assist, said that "Nepal has long been identified as a pain-point for travel insurance companies, with language barriers, high costs of medical care and reports of poor hygiene, turning even the most routine cases into a costly and complex medical problem."

The threat by insurers to pull out of the country would have potentially made it cost prohibitive for many travelers, who already face the steep expense of trekking in the Himalayas, as well as permits for climbing Everest that run into the tens of thousands of dollars.

Nepal is currently trying to boost tourism as it attempts to attract 2 million visitors by the year 2020.

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