According to the Insurance Information Institute, property and casualty insurance fraud now cost insurers an estimated $30 billion annually. Of this, workers' compensation fraud accounts for approximately 25 percent or $7.2 billion a year, according to the National Insurance Crime Bureau (NICB). The problem is only getting worse. The NICB recently called workers' compensation fraud the "fastest growing segment of insurance fraud" in the nation. The Insurance Research Council attributes the current fraud trend increases to:

? Sustained and growing economic pressures

? Weakening of society values

? Highly litigious environment

? High unemployment and job loss

? Lack of enforcement

? Limited deterrents

? Inadequate staffing within the insurance community

Adding to the problem is the fact that proving workers' compensation claimant fraud in civil and criminal arenas is one of the toughest challenges within the claims community. This task cannot be undertaken lightly; there are legal and ethical potholes that must be avoided to ensure a positive outcome.

To identify and build the proper foundation of any fraud case, there must be a methodical system of fraud detection routinely and systematically employed throughout the life of the claim. Defense attorneys and claim professionals can utilize a variety of tools to best assist in the identification and documentation of suspicious claim activities. One of the most widely available and universally accepted fraud detection tactics is surveillance.

Surveillance, as used within the claims community, is defined as the unbiased and ethical documentation of an individual's activities. Given the fluid nature of any investigation and surveillance, it is crucial that investigators clearly understand the laws that govern and impact their profession. To make certain that the surveillance evidence is accepted in legal proceedings, it is imperative that all ethical and legal requirements are met during the execution of surveillance efforts.

It is essential that the surveillance be conducted in a reasonable and unobtrusive manner. If the investigator is compromised, the surveillance should be terminated and re-scheduled for another time. To continue the surveillance after the investigator has been caught by the claimant will negatively impact the claim.

During a surveillance operation, claimants are extended the same legal protections as all other individuals. There is no loss of any legal privilege simply because the claimant is under a civil investigation due to a questionable work-related injury.

However, if a person is in a public place, there is no expectation of privacy. A claimant's activities may be videotaped under these circumstances. In addition, if a person's activities are being conducted in a private area but can be readily viewed from a public location, that individual's expectation of privacy is tremendously reduced, if not eliminated. Common scenarios range from a claimant working on private property that is readily viewed from a public street, park or similar location. Even though the claimant is located on private property, the activities can still be documented if the investigator is located on public property that provides a "ready" view of these activities.

Surveillance can be an extremely persuasive tool when coupled with good results. However, badly managed surveillance operations can result in a disastrous outcome, eclipsing the exposure of the very claim it is investigating. Possible negative outcomes range from the claimant discovering the presence of the surveillance to criminal charges or legal actions being filed against the investigator, including:

? Invasion of privacy

? Trespass

? Intentional infliction of emotional distress

? Negligence

? Stalking/Harassment

? Restraining orders

To protect both the claim and the employer, it is imperative to properly and thoroughly vet every provider to ensure that all current investigative and surveillance best practices are utilized.

Steve Cassell is the president and owner of RSight Investigations, which provides full-service fraud abatement services to the insurance community in Florida, Georgia, North Carolina, and South Carolina. www.rsight.com. Cassell will speak on this topic during the 64th Annual Workers' Compensation Educational Conference and 21st Annual Safety and Health Conference August 16-19 at the Orlando World Center Marriott.

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Exposing Fraud in Workers&#039; Compensation Claims

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