Too Social for Their Own Good?

Using Internet surveillance to catch workers’ compensation cheaters

Not since the first time someone picked up a video camera to document malingering by a workers’ compensation claimant has technology given us such a powerful tool to combat fraud as social networking. Video surveillance—along with traditional investigative techniques—are still effective in catching cheats, but social networking adds a new tool to the investigator's arsenal that can effectively and efficiently detect fraud and reduce claims costs.

Workers’ compensation investigators are increasingly scouring networking sites to help insurers and employers resist paying bogus claims. And it is just not Facebook, Twitter and YouTube anymore, but a bevy of new sites that include photo-sharing and new entrants such as Google-plus. The technology continues to evolve and expand, in many ways making it easier for investigators to positively identify claimants and determine whether their online lives jive with the claims they have filed. The number of claims files closed thanks to online detective work continue to pile up. Consider:

  • A Los Angeles-area warehouse worker who claimed his back was too injured to work bragged about bowling a 300 game on his Facebook page
  • A judo instructor filed for total and permanent injury, then posted the dates he was available for class instruction.
  • A bronco-riding champion filed a claim and soon after invited his online buddies to attend his upcoming competition.

If you play in a rock band—and still have to keep a day job—it is probably not a good idea to file a bogus claim because bands need to aggressively advertise their venues to build their fan base. Spreading the word online is the mother's milk of music promotion. All an investigator needs to do is show up at the bar or concert, take some video of the performance and, for good measure, stick around after the show and record the claimant hauling out band gear. The claim likely will have a shelf life shorter than some one-hit wonder.

Tracking Down the Dollars

While bogus injury claims are the chief targets of investigations that employ social networking, they are not the only ones. Claimants who profess to have no other source of income while cashing their workers’ compensation checks can also get tripped up if they have side employment. Talking about their side jobs or freelance activities online can quickly lead to termination of benefits. Social networking sites especially make investigations easier when claimants are being paid under the table and no official record of employment exists.

That is what happened to an injured worker in Florida who signed statements that he had no outside income. A quick check of his social media sites by Global Options investigators found numerous postings about his successful side business at local flea markets selling his homemade beef jerky.

In additional to claims investigations, social media investigations can also be used to catch employers who commit premium fraud by falsely reporting their payroll or size of their workforce. Last year a promotional video on YouTube from a contractor caught the attention of an astute investigator at Liberty Mutual. The video showed seven men installing a new roof. The investigator thought that odd since the company—a Liberty insured—described its business as "general carpentry" in its insurance application.

Verifying photos and video also has become easier thanks to new "geo-tagging" technology. No longer can a claimant claim that a photo or video of them frolicking on the beach was shot pre-injury. Date and location data are embedded into almost all online media, so it is tough to lie about those vacation photos posted on Facebook and the growing number of photo-sharing sites.

Social networking investigations have given insurers an edge over dishonest claimants—and that's making personal injury attorneys a bit edgy. More and more lawyers are requiring that their clients take down potentially incriminating postings on their sites immediately upon filing claims and refrain from future posts. Attorneys are tired of putting time and effort into getting settlements for their clients only to see their cases dissolve as online evidence melts away the credence of such claims.

No Place to Hide

Americans are addicted to social media. Facebook has more members than most nations have people. Half of users log on every day and the average user creates more than 90 pieces of content a month. And there seems to be no let up either in the number of users or the number of sites.

Technology also is making it easier to locate people—whether claimants or witnesses—and quickly find out what they are up to. New data and text-mining tools are being employed by insurers to dive deeper and quicker into cyberspace and develop information on claimants that previously was either expensive or nearly impossible to obtain. Technology vendors are building custom "deep web portals" for insurers who want to stay on the cutting edge.

Not all insurers and employers are using these new tools to reduce their losses to fraud. But those that do—and do it well—are finding that the cost of investigations and overall claims cost are reduced. That is because bogus claims can be identified earlier and the payment stream cut off faster.

There are still some insurers and employers that block their investigators from accessing YouTube and other social media, thinking that such sites are time-wasters and decrease productivity. They soon will find themselves left behind and at a competitive disadvantage.

Claims and risk managers need to get up to speed quickly on the evolving nature of social media—and the legal aspects that go with it—to be able to manage and assess the continued promise of reducing workers’ compensation fraud.

Dennis Jay is executive director of the Coalition Against Insurance Fraud. He will be part of a panel discussion entitled “Fraud, Meet Facebook: Social Media and Internet Surveillance” during the Workers’ Compensation Educational Conference in Orlando on Monday, Aug. 22. 

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