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In Depth: Social media investigations the first line of defence in fighting fraud

By 5th November 2017No Comments
Information gleaned from open public sources is admissible in court.
Amateur fotballer Gary Burnett, pictured, claimed for whiplash in his car, saying he was unable to play for his team Northwich Victoria because of his injuries.


​However, he was caught out after he posted a tweet just 24 hours later saying he had played in an away game.
He admitted contempt of court last month, was fined £11,000 and given a four month suspended sentence.
Burnett’s is the most recent fraudster to attract national newspaper headlines, but it is not unique.
Every year, companies like specialist online investigator Netwatch turn up thousands of similar cases using social media, and not all of them make it to court.
David Purcell, CEO of Netwatch, gives an example of where he was asked to investigate a large claim from a man who said he was unable to work.
They discovered that four weeks after making the original claim, he had hiked to the North Pole.

​“Just when you think you’ve seen everything,” said Purcell, “something will come along and show you that there’s some extra level of stupidity that someone will go to.”
Purcell said the company would use any and all information that a person posts publicly to investigate a claim: anything from Electoral Roll information and credit records, to public Facebook posts and tweets.
Even fitness tracking apps that share workout scores publicly can be used to assess a claimant’s ability to work, and, therefore, the credibility of a liability claim.
So common have online investigations become that the Financial Conduct Authority has launched a probe into big data – specifically, ‘how insurance firms are using data, and how this may evolve in the future’.
The investigation will look at how information from social media is being used in setting premiums, and in investigating claims. The results of it are expected to be published in the coming months.
Part of the reason it is so widely used is its efficacy. Veteran private investigator James Pinder, partner at DWF, who has been investigating insurance fraud for 25 years, said his job has become easier than ever.
“I love it, because it’s so quick,” he said. “It’s like people just can’t shut up. The emotional incontinence you see in society these days is great for investigating fraud. If they’ve done something wrong, these people just have to tell somebody.”
Speak to any fraud investigator and you’ll hear dozens of stories where claimants have been brazen.
Purcell highlighted one case where a claimant posted a picture of a car accident on Facebook. In the comments section, he admitted the statement he gave to police – where he claimed he was doing 35mph – was a lie. He said he was, in fact, doing 75mph and trying to perform a U-turn in the road.
Bogus ring claim
The company also scoured the Facebook friends list of several individuals involved in several claims, to establish connections between witnesses and claimants.
They helped expose what is allegedly a huge fraud ring: the case is still going through the courts.
Last year, there was a high-profile case involving businessman David Hammond, who tried to make a claim for £20,000 after his fiancée’s diamond ring went missing on holiday in Brazil. He was caught out when investigators spotted his wife wearing the ring in a recent Facebook photo.
He was given a six month suspended sentence last year and 200 hours of community service.
A survey by Consumer Intelligence in 2014 found that one-third of policyholders were unaware that insurers used social media to check on the validity of their claim. Just 29% of respondents thought it was fair.


​Pinder said that was a naïve view. “You shouldn’t put something on a site for someone to read and then say you shouldn’t be reading it,” he said. “Public is just that – public.”
“People treat it as if it’s between them and their friends and the rest of the world isn’t interested. 99 times out of 100 they are right. When the rest of the world is interested they are going to find out.
“Email, text and Facebook are the preferred methods of communication for the younger generation. It’s rarer for them to pick up a phone to call. The result of that is that you leave an evidence trail.”
However, Purcell said his company would never create a fake Facebook account, and make friends with someone to see their private posts.
“One of the dangers for insurers is that claims handlers will do a bit of this work themselves,” he said.
“It’s really easy to follow a red herring, go down a wrong path and follow the wrong person. One of the benefits of using us for insurers is that their claims handlers will focus on what they’re good at doing and not waste half a day on social media potentially looking at the wrong things.
“Or doing things they shouldn’t be, like making friends with someone, thinking that’s okay. When really it isn’t.”
Trained teams
Scott Clayton, claims fraud and investigations manager at Zurich, said the company preferred to do its investigations in-house with a specially trained team.
“The outsourced providers that we have seen provide you with an overall social footprint for somebody,” he said.

“We want to concentrate on the aspects of social media that are relevant to the claim. We don’t want the investigation to be in any way intrusive. If we’re investigating a claim for someone who has lost a Rolex watch, the facts of their marital status, children, relationships, is completely irrelevant to the investigation.”
​He added the insurer could be liable if the investigation breached any privacy laws. “We are very clear with who we contract with. That makes it very difficult for some companies to break into the industry because it’s under such close scrutiny.”
In 2014 it was announced that private investigators would need a license from the Security Industry Association to operate. The SIA has been offering licensing qualifications for PIs for the last year, despite the law making it a requirement having not yet been passed.
Some PIs have welcomed it as ensuring the industry is ‘squeaky clean’. Others take a more dim view. Another contractor, who declined to be named, said he had sent his staff for the qualification but wasn’t sure what use it served.
“It seemed like a box-ticking exercise, and being down for totally the wrong reasons,” the contractor said. “It seems to be viewed as more of a cash cow, rather than a means to hold someone to a certain standard of acting.”
The SIA was not available for comment as Post went to press.
Rules to follow
Purcell said there were certain rules that investigators had to follow. Information gleaned from a public source, like an open Facebook or Twitter page, is admissible in court. Information from a private Facebook page, which has been gained by creating a Facebook profile and adding the claimant as a friend, is not.
“Generally, investigators will follow guidelines on how they should be conducting investigations and then they know they’re on safe ground,” he said.
“If you do an online investigation it’s far less intrusive than surveillance. If you do a social media investigation and you come back with a red flag or fraud indicator, you can justify why you’ve spent a few more thousand pounds and why you thought surveillance was proportionate under privacy laws.”
He added: “We are trying to uncover evidence that can be taken to court. We’re happy to have our analysts stand up and be cross examined.”
However, Richard Davies, head of fraud for Axa UK, said it was doubtful how much hard evidence a social media investigation could reveal.
“If someone has got their privacy settings on their social media feeds sorted out, you’re not going to find anything,” he said.
“But it has been proven to be useful in certain scenarios, particularly in third-party liability and motor claims – for establishing links between multiple people involved in accidents. It’s not one of our top 10 techniques, but it is an ancillary.”
Axa uses an external contractor to handle its social media investigations, but Davies declined to say if it was Netwatch.
Mark Allen, manager for fraud and financial crime at the Association of British Insurers, said even if a social media investigation revealed potential wrongdoing, it wasn’t always followed up with legal action.
“You have to pick your fights very carefully,” he said.
He said proven cases of fraud were recorded in the Insurance Fraud Register, which was maintained by the Insurance Fraud Bureau and shared among insurers. He added a register of suspected frauds were kept by insurers themselves, and used as a resource when they encountered the same person again.
reported in March that the IFB was investigating producing an industry database for suspected fraud as well.
Clayton said there were many cases where evidence that undermines a claim was presented to a claimant, and they simply withdrew the claim.
“The very fact that an investigator is involved sometimes puts people off, when they’re asked questions about certain circumstances,” he said. They withdraw their claim or you never hear from them again.
“Those cases are quite frequent. Should we as an industry be doing more with those sorts of people? Arguably, yes. If they’ve committed fraud and they’ve run to the hills, ideally we should be keeping the pressure on. But then, you’re never guaranteed to find the evidence if you do that. Sometimes, it’s about focusing your resources as effectively as you can.”
However, he added: “If they withdraw the claim that is in itself suspicious. If we have any dealings with that person in the future, we would be able to flag up that they’ve previously been investigated.”
Cheaper investigations
The use of social media as a tool in investigations would cost around £150, and is significantly cheaper than traditional surveillance-based investigations, which can run to around £800 per day.
But, as it becomes more widely known as a tactic, fraudsters are more likely to be cautious about revealing too much online.
“In terms of the evidence produced, it’s not always dynamite,” said Clayton.
“It’s a tool, and a good one. But by no means is it a panacea.”

Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.

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