Illustration: Colin Daniel
Illustration: Colin Daniel

Facebook postings expose you to theft

By Neesa Moodley-Isaacs Time of article published May 1, 2011

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Social networking has taken off in this country, with more than 3.2 million South Africans registered as users of Facebook.

But you need to be cautious of sharing too much information that can expose you to fraud and identity theft, or leave your home vulnerable to robbery.

Facebook allows you to share information with anyone you choose to befriend. But if your Facebook privacy settings are not as tight as possible, the information you post can be read by anyone who has access to Facebook.

You should be wary of posting sensitive information that can be used to defraud you, and you should keep all your contact details private. If someone wants to telephone you and they have to resort to Facebook to find your number, the chances are they are not a close friend.

Information such as your date of birth, your full name, your address and your telephone numbers can be used to commit fraud by, for example, opening an account in your name with a false salary slip and fake identity document.

A study in 2009 by British-based information technology security firm Sophos found that 46 percent of Facebook users accepted friend requests from strangers, 89 percent of users disclosed their full date of birth, and 30 to 40 percent of users revealed information about their family and friends.

A simple update that says you are enjoying your holiday at a coastal resort can alert everyone who can see your profile, making your home vulnerable to burglary. Depending on your profile settings, details may include not only your friends but also their network of friends – who may have a hidden agenda for browsing your profile.

You should exercise great care when using social media, Siobhan McCarthy, the head of group communications for Sanlam, says.

“The first simple rule of thumb would be to make sure you read, understand and apply the security settings provided by a social network such as Facebook.

“A second caution is that when you write on your ‘wall’, or publish anything on the web or a social network, you should ask yourself if you’re willing to share this information with the world – even if it is ‘secured’ by the social network provider,” McCarthy says.

It is not yet common practice in South Africa, but foreign insurers are increasingly using Facebook to investigate insurance claims and to confirm that their clients are telling them the truth.

Personal Finance spoke to eight local insurance companies and found that at least two of them use Facebook as a resource for forensic investigations.

Willem Smith, the chief executive of iWyze, told Personal Finance that his company turned down an insurance claim after an investigation on Facebook revealed that it was fraudulent

The client insured a new BMW sedan under her name, with herself listed as the driver. Not long after she had insured the car, it was written off in an accident.

Smith says: “One of our staff members decided to carry out a search on Facebook using the client’s surname, which was an unusual one.

“The search showed up her 21-year-old son’s profile, which was not locked and was accessible to anyone using Facebook.

“The boy had several posts on his profile – an older post with a photo of the new BMW his mother had bought for him and a more recent post with a photo of the BMW after he had written it off in an accident. His status updates further revealed that he had been driving under the influence of alcohol when the accident occurred.

“Needless to say, the insurance claim was declined on the basis that the client had not been truthful with iWyze by claiming she was the sole driver of the vehicle and that she had been driving it at the time of the accident.”

However, iWyze will not reject or terminate a claim based solely on information published on Facebook, and it will always conduct further investigations to corroborate such information, Smith says.

Parents often commit fraud by registering themselves as the drivers of cars bought for children under the age of 25 so that they pay lower premiums and have a lower initial excess on claims, he says.

“If your claim is declined due to fraud or misrepresentation of information on your part, your insurer can also cancel your insurance policy entirely. If your policy is cancelled, this makes it difficult for you to obtain insurance with another insurer and, even if you are successful in doing so, you are likely to pay much higher premiums,” he says.

You should always stick to the facts when you fill in an insurance application or claim form and be aware that insurance companies share information with each other, Smith says.

According to Budget Insurance, the South African Insurance Crime Bureau had nine active insurance fraud cases under investigation in November last year, had successfully prosecuted three cases and had recovered R380 000 for the short-term insurance industry from January to November last year.

Honesty is the best policy when it comes to insurance, Shehnaz Somers, the head of personal lines underwriting at Santam, says. Short-term insurance is based on the principle of good faith and on clients declaring material information that affects the nature of the risk being covered. It stands to reason that the same good faith should apply at claims stage, she says.

Martin Janse van Rensburg, the spokesperson for Budget Insurance, says insurance fraud refers to the act of submitting a false or exaggerated claim to an insurance company for payment.

“It is considered fraud if the person making the claim knows that the claim is false or exaggerated, and if the insurer would not opt to pay the claim if it was aware of the truth,” he says.

Peter Dempsey, the deputy chief executive of the Association for Savings & Investment SA, says that misrepresentation usually occurs when policyholders deliberately provide misleading information to a life assurer. They know that if the life assurer was made aware of the full risk, they would be required to pay a higher premium.

“For example, a pilot would be guilty of misrepresentation if he declares that he flies only 100 hours a year, when he really spends more than 400 hours a year in the air. A pilot who flies fewer hours represents a lower risk to the life assurance company and therefore qualifies for lower premiums,” Dempsey says.

Material non-disclosure refers to your deliberate failure to disclose information about a medical condition or a lifestyle that is material to the assessment of the risk to be insured. For example, you declare that you are a non-smoker but you smoke socially on weekends.

Dempsey says that life assurers reported that fraudulent and dishonest claims would have cost the life assurance industry R745.4 million in 2009 if they had gone undetected. Of this amount, claims totalling R352 million in the death and funeral insurance category were rejected as dishonest in 2009.


Two South African companies have told Personal Finance that they use Facebook as an investigative tool.

The one company is iWyze, a short-term insurer launched about a year ago. iWyze is owned by Old Mutual and is underwritten by Old Mutual’s subsidiary, Mutual & Federal.

The other company is Discovery Life, one of the largest short- and long-term insurers in South Africa. “We do make use of social media for investigations, but we are not in a position to divulge any details,” Marius Smit, the head of forensics at Discovery Life, says.

Other insurance companies say they use Facebook to interact with their clients but not to investigate them.

Jack Kruger, the head of digital platforms at Old Mutual, says the company uses social media to connect with clients around activities such as road running and music.

“We also use social media to facilitate involvement in community projects. Our online communities are open to everyone. However, we consider personal profiles [to be] as such, and it is not our practice to gather or solicit information without permission,” Kruger says.

Siobhan McCarthy, the head of group communications for Sanlam, says the company uses information that is in the public domain but does not use Facebook when investigating insurance claims.

“Although we do not use Facebook as an investigative tool, clients should always be aware that if the information they post on a social network site becomes public information, insurance and other companies have the right to use such information if it comes to their attention,” she says.

Danny Joffe, the legal director at Hollard, says his company does not use social media sites as an investigative tool.

“Speaking personally as a lawyer, I am not sure information acquired through social media would be admissible in a court of law as competent and reliable evidence.

“But it is very early days in the social media phenomenon, and we are bound to see changes in attitude and approach as its place in society grows and unfolds,” he says.

Shehnaz Somers, the head of personal lines underwriting at Santam, says it is not practical to search Facebook, Twitter, MXit or any other social platform every time an insurance claim is investigated.

“Fraudulent claims are serious for all insurers, because they can have an effect on increased premiums, which is something we work very hard to avoid. However, Santam considers social networking a private space where South Africans can interact with their friends and family,” she says.

Somers says there is potential for insurance companies to use social media platforms to connect with clients to offer information and advice and test the validity of new products.

Trevor Devitt, the communications manager at Outsurance, says that Outsurance uses social media for marketing and public relations purposes and to respond to clients’ queries and complaints.

Auto & General takes a similar approach. Angelo Haggiyannes, a director of the company, says: “Some of our brands – such as Dial Direct, First for Women, Auto & General, and Virgin Money Insurance – do have a presence on Twitter, but the company does not use Facebook or Twitter to investigate clients’ claims.”


* An Australian lawyer won the right in 2008 to serve a default judgment on a couple by posting the terms of the judgment on their Facebook “wall”, according to a paper published by Canadian attorney Pamela Pengelly on “recent trends in the use of social network websites for insurance litigation”.

The lawyer tried several times but failed to serve the couple with court documents via email and SMS.

The judge ruled that the lawyer could use Facebook to serve court notices.

Facebook management at the time issued a statement saying: “We’re pleased to see the Australian court validate Facebook as a reliable, secure and private medium for communication. The ruling is also an interesting indication of the increasing role that Facebook is playing in people’s lives.”

* A court case in Canada in October 2007 dealt with Facebook profiles that have limited access or high-privacy settings.

Jill Murphy was in a car accident and sued the other driver for a resulting chronic pain disorder that had a “detrimental impact on her enjoyment of life and inability to participate in social activities”.

However, just before the trial, the defendant’s lawyer came across a website called the “Jill Murphy Fan Club”, which contained photographs of Murphy at a party, after the accident. A link from the website took the lawyer to Murphy’s Facebook profile, where he was able to view her name and a list of her 366 Facebook friends, but her privacy settings did not allow him to view any other material on her profile.

The judge ordered that Murphy grant the court access to her Facebook profile, because it was reasonable to assume that there would be relevant photographs on the site. The judge ruled that Murphy could not have any serious expectation of privacy given that she had already granted 366 people access to her “private” site.

* In 2009, Canadian insurer Manulife stopped paying monthly sick-leave benefits to Nathalie Blanchard after spotting several pictures of Blanchard on her Facebook profile that showed her at a beach, at a Chippendales show and at her birthday party. Blanchard had been on leave from her job at IBM for 18 months after being diagnosed with major depression.

Blanchard has taken Manulife to court to have her benefits reinstated. The case will be heard early next year.

Tom Nunn, the assistant vice-president of human resources and communications at Manulife, told Personal Finance that the company would never deny or terminate a valid claim based solely on information published on websites such as Facebook, but he was unable to comment further.


As with most contracts or the terms and conditions of agreements, few consumers have taken the time to read and understand the fine print relevant to their using Facebook.

You may believe that you are posting photographs or statements that have nothing to do with your insurance, but insurers may be able to use that information against you, as the case of Nathalie Blanchard shows (see “Status of Facebook postings and insurance claims overseas”, above).

If a company such as an insurer goes to court to find out what you have posted on your Facebook profile, the social media group’s terms and conditions state that it will share such information in the interest of following the law and/or preventing fraud.

The fine print in Facebook’s terms and conditions says the following: “We may disclose information pursuant to subpoenas, court orders or other requests (including criminal and civil matters) if we have a good faith belief that the response is required by law. This may include respecting requests from jurisdictions outside of the United States where we have a good faith belief that the response is required by law under the local laws in that jurisdiction, apply to users in that jurisdiction and are consistent with generally accepted international standards. We may also share information when we have a good faith belief that it is necessary to prevent fraud or other illegal activity. This may include sharing information with other companies, lawyers, courts or other government entities.”

So, regardless of how “secure” your privacy settings are, if a company takes you to court and Facebook’s management believes that you may have committed fraud or that you are involved in illegal activity, Facebook will share your information with that company.


The “Applications and websites privacy setting” allows you to control who can find your information when they search Facebook or the internet with public search engines such as Google.

You can also choose privacy settings for every post you make – look for a lock icon on your screen before you upload a photograph or post a status update. Clicking on the lock icon will bring up a menu that enables you to choose who can see your post. If you do not use this option, the information you post will be shared by Facebook according to your “Posts by me” privacy setting.

Any information set to “Everyone” is accessible not just to people who use Facebook but to everyone who uses the internet. This information can be imported, exported, distributed and redistributed by Facebook and anyone else, without any privacy limitations.

For some information on Facebook, the default privacy setting is “Everyone”, but you can change this by using your privacy settings.

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