Fact or Fiction: Only lousy investigators get burned (caught) by claimants.
The quarterback sneak is clearly football’s most basic play. Snap the ball. Plow forward. End of story. Right?
In reality, the sneak features a multi-layered plan of attack dependent on a flawless center-quarterback exchange, a significant line surge amidst a world of 350-pound behemoths, and the ball carrier’s ability to remain patient for that critical nanosecond before plunging ahead. If any one of these elements fails, it could mean the difference between winning and losing.
Along those lines, to the casual observer the surveillance business may seem blandly straightforward. Investigator sits in car with camera. Investigator films claimant with said camera. End of story. Right?
Just like the quarterback sneak, a successful surveillance depends on multiple factors, some of which are beyond the investigator’s control.
Having worked in the risk mitigation industry for over a decade for various companies, I’ve seen my share of investigative reports. In performing quality control that involves reviewing investigative reports, I can safely say that the quality of these reports can range from stellar to…….well, horrible.
Regardless of the type of investigation, the final report that your investigative vendor presents at the conclusion of an assignment is a direct reflection of the quality of the work they performed for you.
Was the report well written, with proper grammar and punctuation or did it contain numerous misspelled words and poor grammar? Did the report contain all necessary information or did you have to contact your investigative vendor with additional questions? Was the report accurate or was it riddled with factual errors?
If you can’t rely on an investigative firm to consistently provide you with professional reports, then there are likely other areas where they are also falling short. For example, if you receive a poorly written recorded statement report that reads like it was written by a third grader, you have to wonder how the investigator presented himself (or herself) when taking the statement on behalf of your company. Did he/she dress professionally or did they show up in a t-shirt and jeans? Did the investigator have a professional demeanor or did they poorly misrepresent themselves, and in turn their client? You may never know the answers to these questions, but a well-crafted report would likely go a long way toward easing such concerns.
Certainly, if your vendor is consistently getting great video for you on surveillance assignments, you may be inclined to overlook a typo or a grammatical error here and there. After all, you’re hiring an investigator, not a professional writer. However, the report is a very important element of an investigation and needs to hold up to possible scrutiny from opposing counsel. A report containing numerous mistakes or factual errors will certainly get picked apart and could possibly affect the outcome of a legal proceeding.
The bottom line is this: your vendors should be consistently providing you with high quality investigative reports that contain plenty of details and are free of factual errors. Of course, everyone makes mistakes from time to time; however, if you’re frequently seeing work products that are riddled with errors and missing key pieces of information, chances are that your vendor is lackadaisical in other ways as well. As such, you may wish the reexamine your relationship with them and consider finding a risk mitigation partner that can better meet (or exceed) your expectations.
One of our clients recently called me and asked if we offered drone surveillance. I laughed at first thinking the client was joking, but she was dead serious. She told me that a few surveillance vendors had recently sent her marketing emails touting their drone surveillance cameras. She thought it sounded really cool and was interested in trying one.
I explained to her that a drone is an unmanned aerial vehicle (UAV) typically used by military or law enforcement agencies. Most drones have cameras affixed to them to document the areas over which they’re flying. The military drones are very sophisticated and extremely expensive.
There are also drones for recreational users. These are made of plastic, utilize a handheld remote control, and can be bought at Toys R Us or hobby stores–something fun for a child’s birthday present perhaps, but not designed for surveillance purposes.
I was attending a conference last year where a private investigative company had one of these cheap, plastic drones equipped with a pinhole camera. A young man was demonstrating this drone to a crowd of enthusiastic onlookers when, about 2 minutes into flight, the drone careened into another vendor’s booth and plunged to the ground. Everyone got a good laugh with the exception of the investigative vendor. At the time, I thought this was merely a marketing gimmick gone awry. Surely the investigative industry would not be delving into drone surveillance anytime soon.
Apparently I was wrong. And so are those using these drones.
In application, utilizing “real” drones for non-military or law enforcement purposes is seriously flawed for many reasons. First, as demonstrated by the surveillance company at the aforementioned conference, recreational style drones are cheap and unreliable. Imagine a drone crash-landing onto a claimant’s front yard as he mows his lawn. Or even worse, what if it crashes into the claimant? How quickly can you say, “Invasion of privacy lawsuit?” More on that in a bit.
Second, let’s assume there is a reliable drone that never crashes. In order to be effective and obtain recognizable and useful video, the drone would have to fly relatively low, thereby thwarting any attempt at remaining covert. Seriously, picture walking out your door and seeing a weird plastic flying object hovering 30 feet above your head. Time to reach for your BB gun and shoot that sucker down.
Last, and most important, the adverse legal ramifications of using any type of flying surveillance drones are vast. For example, an individual has a reasonable expectation of privacy if they are on their own property surrounded by an 8-foot wooden privacy fence. Even if the claimant is allegedly bedridden but training for “American Ninja Warrior” in his backyard, the fact that he is enclosed by a wooden privacy fence provides him with a reasonable expectation of privacy. In this situation, an investigator cannot climb a tree and film into the backyard. Such a maneuver is considered an invasion of privacy. For the same reason, an investigator can’t fire up a drone, send it skyward, and start documenting the claimant’s Ninja routine. Again, this would be considered invasion of privacy and most likely result in a very expensive lawsuit against the investigative company and the insurance company.
For case law regarding invasion of privacy lawsuits pertaining to improper investigative activity, please shoot us an email at firstname.lastname@example.org
I don’t mean to drone on here (sorry, I couldn’t resist), but what were these firms thinking when touting their drone cameras? Inquiring minds wanted to know, and so did I. Therefore, I conducted some due diligence. I learned that some investigative companies are calling unmanned remote cameras “drones” even though they don’t fly. I suppose the word drone adds a little marketing sizzle, although it borders on false advertising in my book.
Unmanned cameras that run continuous video are, of course, perfectly legal in most instances and most investigative companies have them. Ethos offers a 24/7 camera that runs continuous video 24 hours a day to determine and document a subject’s pattern of activity. The key with these cameras is to ensure they are mounted discreetly either in a vehicle or somewhere outdoors that is not on private property. This camera is an excellent tool in an investigator’s arsenal; however, it should be noted that they are not conducive in every situation. Some areas may be too rural. Other areas may not offer a viable position for the camera to be set up without violating trespassing laws. With that in mind, be wary if you’re working with investigative companies that tell you these unmanned cameras are ideal for all of your cases.
Honestly, they’re not.
In conclusion, conducting investigations is a fundamental part of the fraud fighting process. It’s imperative that all parties involved understand the legal issues involved to avoid any unnecessary and expensive litigation. Also, consumers of investigative services need to separate marketing fluff from the truth.
Moreover, there is not one cookie cutter formula for conducting investigations. Each case is different and requires an individual game plan to maximize results.
That’s all for now. Something is hovering outside my window and I need to grab my BB gun.
I was recently sitting in the O’Hare airport in Chicago when a pre-recorded message came over the speaker system. What sounded like a kind woman stated, “Please remember to cover your mouth when coughing and when sneezing.” I immediately laughed and thought to myself, Are these things that people really need to be reminded of? Are there hordes of humanity strolling around the airport hacking and sneezing on unsuspecting bystanders?
The soothing lady continued, asking everyone “to please wash your hands after going to the bathroom to avoid spreading germs.” Are you kidding me? People actually need to be reminded to wash their hands after using the facilities? I have been to dozens of airports, but this was the first time I ever heard a recording recommending that people do what every kindergartner is taught from day one of school.
As I thought about this, it dawned on me that there must be a reason for these recordings. Then came the light bulb. People–grown adults–are not covering their mouths when coughing or sneezing and not washing their hands after going to the bathroom. I quickly busted out my anti-bacterial gel, washed my hands, and fled from the airport like I was in the movie “Contagion.”
Approximately 15 minutes later, I was taken aback again on my train ride into the city when another recorded voice came over the speaker system. This time it was a male voice, and he sounded much harsher. “Please be mindful of other passengers on the train when talking on your cellular phones.” In other words, “Hey moron, nobody is interested in your phone conversation so crank down the volume a few decibels and use your inside voice.” Well, that was my interpretation.
Folks, I wanted to stand up on the train and proclaim my love for Chicago. The Windy City’s leaders have apparently taken it upon themselves to be everyone’s mom, grandmother, or kindergarten teacher. And quite frankly, I love it.
Our society needs the Common Sense Police, and hey, I could be the chief. Inspired, I started compiling my own list of friendly reminders that could play from loud speakers across the world. I would include the previously mentioned Chicago reminders with an emphasis on not talking loudly on cell phones. Then I’d continue.
Please remember not to be a jerk. Treat other people kindly. Don’t be self-centered. No taking selfies. Remember to wear deodorant. Don’t text and drive. Do unto others as you would have them do unto you. Give back to those less fortunate. Don’t be a bigot or racist. Listen to other people when they are talking to you. Say please and thank you. Don’t use the word hashtag in your conversations.
The train came to an abrupt stop and I snapped back to reality. I realized my list would be way too long and would never fly with the general population. If people aren’t washing their hands after going to the bathroom, how could I expect them to follow my laundry list of reminders? My recording dream died that day on the blue line, but I was satisfied to know that the city of Chicago is doing its part to try and restore civility and basic health standards to our society.
So what does any of this have to do with a blog about fraud, investigation, and risk mitigation? In my opinion, from a very young age we all know the difference between right and wrong. It’s a conscious choice, and deep down inside, most people understand the distinction.
The best advice I ever gave my children is when faced with a difficult decision, just do the right thing. Such a simple concept in theory, but oftentimes very difficult in practice. Surely, we all know that we should cover our mouths when sneezing and hacking. We know we should wash our hands after using the restroom.
Similarly, everyone knows they are not supposed to rob people or steal from companies. Yet annually, insurance fraud still is still an approximately $100 billion industry. Identity theft and other fraud crimes continue to skyrocket. Fraudsters are making a conscious choice to do the wrong thing and most of them clearly understand that.
So fighting fraud becomes a more complex challenge than perhaps we ever thought. Combatting fraud and almost every other negative issue in our society requires fundamentally changing the way people think about doing the right thing.
Simple in concept; most likely impossible in practice.
If I had the answers to this dilemma, clearly I’d win a Noble Peace Prize. There would be no wars, no crime, and no selfies. Just kidding about the selfies. They’ll outlive the cockroaches.
Still, I’d like to try. So how about piping this message through recordings in all the airports and trains? Kindly remember not to steal or defraud. This includes your fellow citizens, corporations, and insurance companies. And please, for the love of God, stop screaming into your cell phones.
So the Little League World Series is in full swing. And once again, I’m hooked.
As someone who’s spent half his professional life as a sportswriter, I thoroughly enjoy this event. Truly, it brings back great memories.
During my days with a scorebook and reporter’s pad, I loved covering youth sports. For starters, Little League parents had not yet blossomed into self-appointed experts and therefore voiced less complaints—or at least voiced said complaints at lower decibel levels—than their high school peers.
More than that, though, seeing those light bulb moments unfold was magical. You cannot help but smile when a No. 9 hitter digs in, keeps his eye on the ball, and WHACK—delivers a single up the middle.
Those kids on ESPN are clearly more accomplished than most of the youngsters I wrote about. Their skill-sets are amazing, especially for this age. The big mind-boggler, though, is their ability to read, analyze, and react. Not only do they have a solid handle on traditional game situation decisions, their ability to improvise based on opposing personnel and organic developments is stellar.
That same quality is vital in fighting fraud.
My first job in this industry was in background verifications. During week one, they handed me a list of questions to ask a job candidate’s former employer. One question involved whether the employee left voluntarily or was fired. The next queried whether said employee would be rehired if his/her position was open.
On my first call, the employer told me our subject had been terminated. However, he noted that said subject would be rehired if there was a vacancy.
I asked why.
Apparently, the subject was released due to a departmental cutback, not poor job performance. I noted this and finished the interview. When the individual training me reviewed my sheet, he questioned why I went off script. Apparently, “why” was not a company norm.
I was floored, and I resigned within three months.
Folks, let’s face it. I did nothing revolutionary here. I ran into a scenario that was not covered in black and white and improvised. It was Journalism 101, and it’s everyday life in any risk mitigation firm worth its salt.
While investigators either in house or in the field should have a strategic game plan, it’s equally important to make educated adjustments to ride the ebb and flow of a given assignment.
Whether born from experience, instinct, or somewhere in between, it is imperative that decisions stream rather than stagnate and ultimately advance toward a concrete resolution.
When every physical and mental resource is focused, one’s power to solve a problem multiplies tremendously.”
– Norman Vincent Peale
In order to significantly impact fraud, it is essential to formulate a solid, comprehensive approach. After all, you don’t bring a knife to a gun fight. If you’re smart, you bring a bigger gun and maybe a hand grenade. When it comes to fighting fraud, we really need all the weapons we can gather.
I have an approach called the 360-Degree Fraud Program.
Personally, I think it makes sense to attack fraud in three segments:
1) Fraud Prevention – preventing fraud before it even happens.
2) Fraud Detection – identifying fraud in an efficient manner.
3) Fraud Defense – fighting fraud once you have the proper evidence.
These three components are critical to eliminating, or at the least, significantly reducing fraud. Quite frankly, without addressing all three of these areas you are limiting your ability to successfully combat fraud. All three facets of this approach need to be solid in order to come full circle—full circle as in 360 degrees.
As we have already learned, fraud costs the insurance industry billions of dollars each year and it is simply not good enough to combat fraud without taking this three-pronged approach. The adage that you are only as strong as your weakest link certainly applies in this fight. This is how the 360-Degree Fraud Program works:
Phase 1 – Fraud Prevention – Identifying potential fraud before it happens can save insurance companies millions of dollars. Dare I say, with a Dr. Evil voice, “Even billions of dollars.” Industry studies indicate that premium fraud is more prevalent than claimant fraud. Taking this into consideration, it makes sense to start with your underwriting department to ensure that you are writing reliable and cost- effective policies. From a workers compensation standpoint, you should be verifying insured locations, ensuring each insured is utilizing correct employee classification codes, and identifying any potential underreporting of payroll. A thorough due diligence investigation can accomplish all of these things and much more.
From an employer’s or insured’s perspective, conducting thorough pre-employment screenings can significantly reduce fraud, yet many companies including Fortune 500s either don’t conduct such screenings or perform a very cursory search that is not beneficial in weeding out candidates who will ultimately rip them off. For example, the majority of people who engage in fraudulent workers compensation claims are recidivists, people who repeatedly commit the same offenses. Most of these people blatantly lie on their job applications when asked if they have filed prior workers compensation claims. In many states, a workers compensation search can be conducted on an applicant after they have been offered a job. If an employer discovers that the applicant lied on their application, they can rescind the job offer. There is a pretty standard profile of individuals who cheat insurance companies. Employers that are proactive in their hiring practices keep these people out of their workplace, thereby mitigating future risk. It’s like keeping the fox out of the hen house. Everybody except the fox is happy.
Fraud Prevention is often overlooked because of a limited money-centric attitude. Many companies want more business, brokers want more commission, and shareholders want more revenue. Obviously, this is a short-sighted approach that will ultimately end with negative long-term ramifications. As Benjamin Franklin once said, “An ounce of prevention is worth a pound of cure.” Therefore, the best way to eliminate fraud is to avoid planting a corrupt seed. As stated, the first step in combating fraud is fraud prevention. Arguably, it’s the most important.
Phase 2 – Fraud Detection – Detecting fraud in your organization is paramount. And the earlier you detect it, the better. It takes effort and expertise to ferret out suspicious claims. The key is to have a good system in place to identify critical red flags or fraud indicators that typically point to fraudulent claim activity. Having a team of adjusters and claims managers thoroughly trained in fraud detection techniques will significantly improve fraud detection awareness. By identifying fraudulent claims early in the claims process, you save time, money, and aggravation.
Phase 3 – Fraud Defense – Now that you have caught the fraudster red-handed and collected evidence to support your case, it’s time to send a message. The third phase in this approach requires compiling solid evidence-based fraud referrals and submitting them to the respective state fraud reporting agencies. If submitted properly, you will see a dramatic increase in the amount of fraud prosecutions. It’s a great feeling when the system works and people violating said system are punished accordingly.
An added benefit of companies displaying diligence in their pursuit against fraud is that they develop a reputation of taking fraud seriously. They will use whatever measures necessary to combat fraud. Trust me, the unscrupulous claimants who make a living submitting fraudulent claims are well aware of companies that take such an aggressive stance. Conversely, they also know the companies that are timid in the fraud fighting arena. Which companies do you think they target?
Beyond the above-referenced three phrases, it is recommended that you have some mechanism in place alerting you to potential fraud. Many insurance companies utilize predictive modeling software that can assist in identifying suspicious claims. Additionally, a good investigative vendor should provide you with a fraud alert report that will assist in the fraud referral process. Staying on top of these files and communicating effectively with the respective state fraud division is important in receiving a positive outcome. It’s also important to understand what truly constitutes fraud to make sure that you have ample evidence for a legitimate fraud referral.
In closing, having a well-rounded approach when dealing with fraudulent activity is absolutely essential. By attacking fraud from all angles – fraud prevention, fraud detection, and fraud defense – your company will definitely be a force to be reckoned with when it comes to dealing with fraudsters. You will see your fraud referrals/convictions increase exponentially, and even though every case will not be a fraud conviction, you will still be able to utilize critical investigative evidence to settle and close out many suspicious files.