Insurers Using Social Media To Monitor Fraud

Colleges, potential employers, and law enforcement agencies have been using social media like Facebook and Twitter to screen for undesirables since the services became widespread.  Now we can add insurance companies to the list of entities that monitor or “stalk” us via our online presence.  In this case “Big Brother” is looking for evidence of insurance fraud on its customers social networking sites.

Frank Scafidi, spokesman for the National Insurance Crime Bureau, was quoted in the LA Times on the topic: “They look out for things that don’t add up, like someone who claimed they hurt their back too badly to work and then bragged on Facebook about running a marathon.”  Social media has become such an important tool to fraud investigators that they might be seen as inattentive if they didn’t at least skim a social media site to check for potential red flags.

Insurance fraud is undoubtedly a big problem, raising insurance premiums for innocent policy holders, and costing the U.S. more than $80 billion a year.  This would suggest that the public should, perhaps, be in favor of whatever anti-fraud tactics the insurance companies use.  Unfortunately there is the risk of fraud investigators misinterpreting information, making mistakes, or going too far with their online surveillance.  What if, for example, an insurer decided to deny coverage to someone based on something they posted to their Facebook account?

For example, a Canadian woman struggling with depression took a leave of absence from work in 2008 and began receiving disability benefits from her health insurance company.  Some months later the benefits stopped with absolutely no notice.  The woman was told that pictures from her Facebook account- showing her hanging out at a bar with friends, and playing on the beach- were used to determine that she was depression-free and clearly fit for work.  There was no evidence of any investigation beyond the photos; not even a call to her doctor or therapist.

Attorney Thomas Lavin told the NY Times “The whole thing is just symptomatic of technology running ahead of the people who are using it,” he said. “It’s kind of like the early years of flight when planes are crashing all over the place. Society has not come to terms with how to manage social networking.”

If you are injured in a motor vehicle accident and decide to submit a claim to your insurer, be prepared for a total invasion of privacy.  An insurer can and, more than likely will use any information available to them to deny a claim or use against the insured during a trial.  Even if your photos, status updates, or blogs are marked as private a judge can still demand that the information be produced.

It’s clear that, while this sort of public information can be helpful in preventing insurance fraud, it can also be abused, misused, or used against an injured party just as easily.  Anyone with an online presence needs to familiarize themselves with a service’s privacy functions and monitor not only what is publicly posted, but also who can access it.


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