Filed Under:Claims, Investigative & Forensics

Opinion: How Millennials Are Learning Fraud Techniques Online

The uprising of young people in movements such as Occupy or the promotion of antisocial behavior by online groups such as Anonymous may be contributing to a culture that some Millennials call a “new paradigm.” Acts of civil disobedience against the financial industry and corporations are part of the agenda, and insurance companies are not exempt from these actions.

The term "Millennials" was coined by William Strause and Neil Howe, authors of the book “Millennials Rising: The Next Great Generation.” Young people are no more corrupt than baby boomers, but the younger generation has far more advanced technical skills than the greying population and some are using those talents to commit criminal acts.

Hacker Lingo

One need only check out black hat hacker sites or news reports to see that a considerable number of those committing cybercrimes are actually teenagers who, among other things, are instigating data breaches from their parents’ basements. In the hacker community, black hat hackers is a term for those who illegally hack into sites, whereas white hat hackers are computer security experts. These hackers often walk a fine line between the two, as you will discover if you ever attend a hacker conference such as Def Con

Millennials cut their teeth on the Internet. They know how to use the technology to get what they want, which can be a great thing. Of course, in order to hide assets, some will put their money in Bitcoin and other digital currency.

What about those who want to work under the table while collecting benefits for a fraudulent claim? There are all kinds of jobs available online for tech-savvy types who can get paid through PayPal. After receiving payment, they can move that money around anyway that they see fit.

Do you suspect that a claimant is involved in fraudulent activities? He or she may be doing all of it online through the underground markets. The most famous one, known as the “Silk Road” was shut down in early October by law enforcement. At the time, $28 million worth of Bitcions were confiscated from the owner, Ross William Ulbricht aka "Dread Pirate Roberts."

A person can purchase virtually anything, from illegal drugs and weapons to enlisting a hit man on the digital black market. Of course, you have to know how to get there and most of us don’t have a clue. Do you know what the Tor Network is? Exactly. A number of copycat sites are already in operation, but the feds are already making busts and pushing the illegal activity even further underground.

There is nothing illegal about Bitcoins. However, they are unregulated currency, which is attractive to people who want to hide money.

If you are investigating a suspicious claim or a fraudulent personal injury claim, then you must keep up-to-date about the latest technology and also what the younger generation is doing. We all know that social media is a great way to find out information about a claimant, but social media encompasses much more than Facebook and Twitter.

Anyone looking to commit fraud can easily find pointers online. “How can you commit insurance fraud?” is not an uncommon question on online forums. There are also sites that show young people how to fake an injury to get out of going to school or work.

People are also learning to cover their tracks online. They use Tor or anonymizer sites to hide their identities. The generation that fell in love with social media is also willing to stay off those sites if they have something to hide, or use fake profiles where only their close friends know who they really are.

Does that mean it is impossible to obtain information on these people? Everybody slips up sometime. Sure, a fraudster may not be using his or her real name on social media, but the friends are. While it is almost impossible to obtain information from encrypted communications, there are other ways to gather evidence of fraud in an insurance investigation. The digital generation may communicate through online and mobile methods, but they have often forgotten that old-fashioned investigative work is not conducted solely online.

While the Internet is a great source of information for investigations, the amount of data that can be obtained is also subject to legal restrictions. Professional investigators know what information can legally be obtained and used in litigation. Yes, some of the methods used to commit crimes, such as anonymous surfing, can also be used to uncover these activities.

An experienced private investigator understands that while you can conduct image searches on sites like Google Image or Tin Eye, or you can retrieve exif data from photographs, most of our daily activities aren’t in cyberspace; they are in the real world. That makes surveillance an exceptionally important tool in the war against insurance fraud, especially in the workers' comp realm and era of rampant PIP fraud. The only people (other than law enforcement) who can undertake surveillance are licensed private investigators. 

The best approach is a comprehensive one, encompassing both digital and physical investigations. As you know, one road always leads to another.  

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