Using Social Media to Fight Fraud

Brian Wilson


March 1, 2017

fighting fraud social media

While scammers are increasingly taking advantage of the power of social media to conduct criminal activity, astute risk managers and their insurance companies are also finding ways to leverage social media information as a tool to combat insurance fraud.

For example, an injured worker was out of work on a workers compensation claim but could not resist playing a contact sport on a local semi-professional sports team. Through social media and internet searches, investigators discovered that the worker was listed on the team roster and was playing very well.

Social media investigations are a valuable addition to the techniques available for fighting fraud at a time when the threat appears to be rising. According to a November 2016 study published by the Coalition Against Insurance Fraud, 61% of companies surveyed said suspected fraud had increased, up from 51% in a similar study in 2014. With insurance fraud estimated to cost the industry $80 billion a year, significant progress in limiting its prevalence could meaningfully reduce premiums.

Tapping the potential of social media is not easy, however. One billion new social media posts appear every two days, and the massive amount of information available is both a blessing and a curse. Finding the relevant information to resolve questions raised regarding workers compensation, slip-and-fall, product liability or other types of claims requires special training and cutting-edge analytical tools.

While risk managers cannot be expected to be social media sleuths, they can play a critical role in the initial phase of an investigation by understanding what may matter to the case and the importance of collecting information up front in order to help set social media search objectives and ensure all available information is captured to aid the search.

Risk managers can be proactive by having a disciplined and thorough accident reporting process and format for both third-party and employee accidents. Reports should note details such as incident time and place, suspected cause, pictures of the claimants and witnesses, contact information details, emergency contact information, home address, employer and vehicles driven. Employees who might be in a position to respond first to an accident should be trained in how to collect and record information. Accident reports need to be reviewed for legibility and the report writer should be clearly identified.

For workers compensation claims, risk managers can similarly help by having thorough employee files available for the investigator’s reference. Job applications contain valuable information about the subject’s employment and residence history, while interviews with colleagues and even resumes can highlight known hobbies and interests that may provide useful clues to sharpening the focus of a social media search.

Information collected but not shared is worthless. Risk managers should make sure this information is communicated to the claims adjusters. It is often assumed that information has already been shared when it has not, potentially delaying or even depriving adjusters of certain details that can help shape the direction or prospects of social media searches.

This information will give social media investigators a head start in developing the parameters and avenues for their searches. They will be better able to decide what questions they want answered, what hypotheses they want to test and where they might develop additional leads. For example, investigators may be able to search for information posted at the time and place of an accident to see if a bystander posted relevant observations that would validate the reported facts.

Risk managers must not only proactively collect and share information, but also take steps to ensure that their insurance carrier and/or vendors are following procedures that comply with privacy laws and incorporate some of the latest techniques to mine the entire universe of online information. A few of the latest techniques include:

  • Predictive modeling to discover fraud in its earliest stages by searching for patterns indicating an increased possibility of fraud. The sooner fraud can be discovered, the less likely funds will be paid out.

  • Social network analysis to uncover relationships among people, places, locations, accounts or any other entity. To aid this effort, investigators employ link analysis software that reveals connections and the development of relationships over time. This can paint the whole picture and reduce the time needed to identify common factors among claims.

  • Cross-leveraging data sources such as social media, traditional websites, public record databases and vehicle telematics. Fraudsters claiming they were rear-ended by a company van, for example, may be confronted with traffic camera video footage showing the van was stationary at the time of the alleged impact.

Social media and online search is not necessarily a one-time exercise in the life of a claim. Periodic or event-based checks can catch changes in the subject’s profile that may help improve the efficacy of the search efforts. As a result, risk managers should actively monitor changes in a workers compensation claimant’s situation and pass them on to their insurance company to consider in the ongoing investigation and online search efforts.
Brian Wilson is vice president of special investigations at QBE North America.