Worried About a Fraudulent Insurance Claim?
Here's How to Investigate

By Sean Flavin February 18th, 2021

Here’s a fact that can be tough to swallow: not everyone who submits an insurance claim is telling the truth. Sometimes, people fake and misrepresent injuries to access insurance benefits they wouldn’t otherwise be entitled to from their employer and the company’s insurance carrier. When someone does submit a fraudulent insurance claim, it's essential to conduct a thorough investigation to get all the facts. This is especially true for group captive members who play dual roles as both the insurance company owner and the insured.

So, how do companies go about identifying a fraudulent insurance claim? To answer that question, we invited Jason Caroluzzi – Executive Vice President at Ethos Risk Services — to join our Risk Control Webinar series. In his presentation, Caroluzzi provided some alternatives to traditional surveillance tactics to help companies find the truth and an inside look into what goes into a standard claim investigation. Here is a recap of his presentation.

Using the Internet to ID a Fraudulent Insurance Claim

According to Caroluzzi, deceitful claimants often leave a plethora of evidence about their nefarious claims in easy-to-find places. Thanks to the ubiquity of the internet and smartphones, the web is full of photos and updates on everyday activities — which, for insureds trying to sneak one by their employers, amounts to implicit evidence of their fraud. Here are a few ways that Caroluzzi suggested for employers and investigators to uncover that evidence.

Social Media

Caroluzzi shared some impressive stats on just how prevalent social media is in our world. For example, Facebook has roughly 2.6 billion global users who, on average, spend more than a year and a half of their lifetimes on the platform. That usage leads to a lot of data. According to Caroluzzi, every 60 seconds Facebook users generate:

  • 1 million likes
  • 317,000 status updates
  • 243,000 new photos

“There's a lot of information shared online that is a goldmine from a claims investigation standpoint," said Caroluzzi. "We love it as investigators."

Caroluzzi offered a few tips for finding evidence, like going through the subject’s photos to find out what they’ve been up to since their purported injury. If the individual hasn’t paid much attention to their privacy settings, it’s as easy as finding the right profile and scrolling through the posts and photos.

You’d think that someone who has filed a spurious insurance claim would avoid sharing incriminating information on social media but, according to Caroluzzi, it happens more than you’d think. Caroluzzi posits that social media has rewired our brains. For many users, the positive feelings elicited from a rash of likes and shares far outweigh the logical behavior of unplugging while committing insurance fraud.

“People just feel this urge to post,” said Caroluzzi. “Even if that post shows them performing activities that prove they’re not as hurt as they claimed.”

Search Engines

Along with social media platforms, search engines are another excellent tool for investigating potentially fraudulent claims. Caroluzzi singled out YouTube as an especially fruitful search engine for claims investigations. While you might not think of it as a search tool, YouTube is the second-largest search engine in the world (behind Google), with more than 3 billion searches per month.

According to Caroluzzi, users upload 400 hours of video to YouTube every minute, which adds up to about 64 years of video uploaded every day. Like Facebook, the sheer amount of user-generated data on YouTube makes the platform another fruitful source of evidence for investigators like Caroluzzi.

Of course, there’s also Google — the most popular search engine in the United States, with roughly 40,000 searches per second. Caroluzzi pointed to Google's image search as a beneficial tool for locating images of a target that aren’t accessible via social media.

Traditional Investigation Tactics

While internet research can help set the stage for identifying a fraudulent insurance claim, it’s no substitute for physical evidence and visual observation. Caroluzzi stresses the importance of traditional surveillance to determine for certain whether an insurance claim is legitimate.

Should the occasion ever arise where you need to investigate a potentially fraudulent insurance claim, here’s an overview from Caroluzzi on what traditional surveillance involves:

  • A physical investigator observes the individual for prolonged periods.
  • The investigator documents the individual’s activities and collects substantial amounts of data, facts, and evidence.
  • The investigator then puts together a report and objectively presents the findings.

According to Caroluzzi, effective investigators have different observation tactics for different types of people. For example, people in different age groups often have varying schedules, which makes it important to use investigation tactics that match the subject’s behavior.

"Cookie-cutter investigation tactics aren't as effective for certain groups of people," said Caroluzzi. "For example, a 6 a.m. start time for surveillance isn't as effective for someone under the age of 30 as it is for someone over the age of 60."

The Cutting Edge of Claims Investigation Surveillance

Towards the end of his presentation, Caroluzzi covered a few advanced technologies his company, Ethos Risk Services, employs when investigating claims. One of those cutting-edge techniques involves using hidden video cameras to record a subject.

According to Caroluzzi, Ethos sees a 97 percent video capture rate (the percentage of time the device captures video of the target) using its Smart-Cam technology. These cameras have motion detectors and powerful batteries, allowing investigators to capture high-quality video of a subject without requiring someone to follow the individual physically.

“We can hide these cameras for up to 21 days, said Caroluzzi. “The footage we get is amazing because the target's guard is down, and you get to see their natural actions."

If you’d like to learn more about using surveillance to investigate a potentially fraudulent insurance claim, check out Ethos Risk Services' website.

About the Webinar

This presentation was part of CRI’s Risk Control Webinar Series — weekly installments of webinars to educate the group captive members we work with on topics like workplace safety, organizational leadership, and company performance. The thoughts and opinions expressed in these webinars are those of the presenters and do not necessarily reflect CRI’s positions on any of the above topics.

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