Lifestyle information posted on social media can be used to determine what sort of risk you pose or whether your insurance claim is paid out, warns Georgina Crouth.
Johannesburg - It seems harmless enough: your leather jacket is stolen but you tack a pair of leather trousers to the claim. You suffer a burglary, lose some valuables, but you load an extra appliance.
It might not sound as serious as sending your car across the border or torching your struggling businesses, but inflating your insurance claim is fraud.
Insurers have heard it all.
And they have ways to check up on their clients and assess the risk they pose to their business. 1st for Women, built on the statistic that women are apparently better drivers, is a prime example.
The drama around the public protector’s report on state capture highlighted the fact that investigators use geolocation to access information.
So if, for instance, you’re frequenting the Saxonwold Shebeen and you crash your car, that same technology could be used by your insurer in its investigation.
Insurance specialist Maria Philippides from Norton Rose Fulbright attorneys says short-term and long-term insurers use increasingly turning to technology and social media in their investigations. They can access everything you post publicly on Twitter, Facebook or Instagram, look at your history, see who you are friends with, see your updates, the pages you liked or shared.
And you should be wary of what is put out in the public domain.
“I recently did a presentation for insurers and one of the questions that came up was: If a person claimed for disability from an accident but they’ve posted pictures on Facebook of them skiing or running a marathon, can we use that information and reject the claim? The answer is yes. If the information is on social media for everyone to see - it’s publicly available - then of course you may, provided it’s reliable, current and appropriate information.
“The reason they would want to use that information is to prevent fraudulent claims, which are rife.
“Insurers can’t go around trying to friend people on Facebook to get information - that’s entrapment - but if it’s information that’s publicly available, you can. It’s not an infringement of your privacy.”
One of the cases Philippides cited was that of a student who crashed his car while under the influence then boasted on Facebook about the fact that he had insurance, which “covers it anyway”.
After conducting their own investigation, the insurer placed him at a certain time near a drinking hole, spoke to witnesses… and looked at his Facebook page.
It’s not definitive proof, but a reasonable assumption that he was drunk late at night on a weekend.
FILTERS
What you make available on social media is critical. If you don’t have filters up on Facebook or Instagram, and allow strangers unfettered access to your account, your information can be used against you.
“There are three privacy settings: no information, except my friends. 'Friends of friends', which is only the friends of your friends. And then the default setting, which is anybody can look at your page. If it’s on a default setting or it’s gone friend to friend’ then the law has held that it’s disclosure, it’s not private, it’s in the public domain and anybody can use it,” Philippides says.
OWN INVESTIGATION
Former policemen are head-hunted by the industry to conduct thorough forensic investigations. She says insurers need to stop fraud so they often make examples if they catch their clients in a lie. Depending on the severity, there could be legal consequences and a prison term.
“Imagine if you’ve claimed for a lost engagement ring and you go to jail. You’ve lost your job, your income: there are devastating consequences for your family.”
If the insurer can prove you misled them into paying a claim, there’s nothing preventing them from recovering the money from you.
“There’s also a serious civil penalty. Your insurance can be cancelled, which makes it very difficult to obtain insurance and you can’t buy a car without insurance.”
If you own a business, over-inflating your profit and claiming for business interruption cover, you could get into trouble with Sars.
“When the insurer does its investigation and realises that person has reported a lower income to the receiver and is getting the benefit of a reduced tax rate, that’s tax fraud. If Sars gets wind of that, they will prosecute.”
CREATIVE ACCOUNTING
There are different types of fraud. One of the rifest is the manufactured claim: you’re trying to get a benefit, but you haven’t suffered a loss.
“There are instances where there has been a genuine loss but the claim has been exaggerated. Often the insured believes they will be paid out less than they actually lost,” she explains. “Some insured also create the loss, that is, they burn their premises down or arrange to take their vehicle across the border.”
REJECTION
Insurers can reject a claim on the basis of extreme negligence or recklessness or criminal action. So you’re on the highway and crash because you’re “tweeting and eating” - they can reject that.
Philippides warns: “We live in a little bubble - we think no one sees what we’re doing. Yet we display our whole lives on social media. There’s always a witness. We’ve become very vain in our society that we want people to see how well we’re doing. We post our achievements on social media, we boast and exaggerate. We need to be more careful about posting every minute detail.”
Just ask Kim Kardashian about her Parisian reality check.
* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected]
** Follow on Georgina Crouth on Twitter: @askgeorgie
The Star