Insurers are hunting fraud with social media

G.L. had no idea that posting his holiday snaps on Facebook would land him in so much trouble, but the photographs showing him enjoying a break at the Italian Lakes played a critical role in helping an insurer prove that he had committed fraud, resulting in a nine month jail sentence.

G.L., a 54-year-old lorry driver, had sued elderly motorist E. N. for a six-figure sum for psychiatric and back injuries, plus a lost earnings claim of over £25,000 a year. But his Facebook page proved that his claim that his injuries had left him housebound was false. Acromas, which owns Saga and AA Insurance, was able to combine this with surveillance evidence to win a case in the High Court against Loveday in July.

The case highlights how useful social media – web and mobile-based communication tools like Facebook and Twitter – can be in identifying fraud, but bear in mind that it’s not a silver bullet.

Connecting with criminals
Social media is mainly being used at the claims stage to either investigate whether people know each other or, as in the Loveday case, to check locations or activities. Glenn Marr, director of the Insurance Fraud Bureau, says social media is now used routinely in investigations. “We find websites like Facebook very useful in linking people together and therefore helping proving conspiracy, especially in motor insurance,” he says.

Facebook played a crucial role in the lead case in this area, the High Court case of Locke v Stuart and AXA Corporate Solutions in February. Suspicions were aroused when nine personal injury claims were found to have common features, including cars hired briefly on Merseyside. AXA found the nine claimants were part of the same social circle on Facebook, which helped to prove a conspiracy to defraud.

Meanwhile, LV= recently discovered that a group of passengers claiming for injuries incurred when their bus crashed – at a very low speed – were Facebook friends with the driver. This helped to prove fraud, saving LV= £250,000.

Adding it up
Social media can also be useful at the policy stage. LV=’s head of financial crime operations Ursula Coulibay says the insurer uses it to check suspicious information: “If someone wants to insure a certain type of building in an area that doesn’t seem to match up, we can use Google Maps to look at the area and see whether the property looks as if it’s being used for the purpose stated.”

Google Maps can also be used to investigate a customer who claims to live in one area but has asked to receive mail at another address, says Coulibay. “The system can give us an idea of whether, say, a vehicle is being parked where it is supposed to be.”

from “Insurance times”