Insurance Companies Use Social Media to Look for Fraud

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From a certain perspective, the development of modern society has for the most part simply been the gradual extension of technologies for monitoring individuals through channels including civil bureaucracy, the courts, public education, credit histories, and actual electronic surveillance by security cameras and the like. But this Orwellian process will only be complete when individuals assume responsibility for spying on themselves -- and we may have finally reached that glorious day thanks to social media.

We've all heard about college admissions officers employers using social media to weed out undesirables. In the past I've also written about divorce lawyers looking for evidence of infidelity on social media, the Israeli military cracking down on shirkers using social media, and UK insurers using social media to catch people who put their homes at risk by announcing when they'll be away on vacation.

To this litany of self-surveillance exploiters we can now add health insurers, who are using social media to uncover evidence of insurance fraud -- evidence published by the fraudsters themselves. For example, The Los Angeles Times quotes Frank Scafidi, spokesman for the National Insurance Crime Bureau: "They look out for things that don't add up, like someone who claimed they hurt their back too badly to work and then bragged on Facebook about running a marathon." In fact the social media gambit is so widespread now that it is becoming standard; the LAT also cites Peter Foley, vice president of claims administration at American Insurance Assn., who says fraud investigators might be judged negligent if they don't take at least a cursory glance at social media "to check for contradictions."

There's no question insurance fraud is a huge problem, costing the U.S. as much as $80 billion per year, according to the LAT, and fraud raises insurance premiums for law-abiding folk, so the public should broadly be in favor of anti-fraud measures.

v But there is obviously a danger of fraud-hunters making mistakes, abusing their new technique for sniffing out ill-doing, or simply pushing their surveillance too far. For example, investigators might use evidence from social media to deny someone health insurance, or raise their rates because of previously undisclosed conditions, according to a report from insurance consulting firm Celent titled "Leveraging Social Networks: An In-Depth View for Insurers."

While investigators claim they never make a judgment based on social media alone, some types of information cited by the LAT should be off limits no matter what: in one example, health insurers might raise the rate for someone who "Likes" a cancer support group, but this evidence is ambiguous at best (they might just "Like" it because it helped their best friend).

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