Private Investigation Services - LKA Group

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Ecommerce and Income Protection Claimants – A Risky Business

More than 10 years ago when the internet and general public access to it was nothing like it is today, I wrote an article in an industry journal about the perils of trying to manage an Income Protection claim where the Claimant was suspected of running their own internet based business from home.  It now seems an appropriate time to revisit the background to that claim and what lessons we can all learn in managing the claims we have today.

This is the war story.  Prior to lodging the claim, the Claimant was an executive in a go ahead business with interests across the world.  As a result, he was a frequent overseas traveller and it seems that eventually the constant stress and body clock adjustments this caused, resulted in him having a breakdown and being unable to continue in his normal employment. What caused initial concern however, was that here was an apparently highly motivated, qualified and very intelligent individual, who was simply not getting any better or making any attempt at seeking alternative employment or for that matter, to do anything.  Instead over a period of several years, he was just putting his hand out for more and more (significant) Income Protection payments and at the same time being strongly supported by his local GP.

The Client placed the Claimant under surveillance but with nil result.  All they found was that he was spending a lot of time at home – something not unusual for an allegedly incapacitated Claimant.  Equally, independent medical exams found very little to report and no one could say for certain that he was not unfit for work, so payments continued. The ‘non demonstrable’ nature of his condition was certainly a contributing factor here, but the ‘standard’ investigation methods failed to show anything useful.

It all started to unravel when the Client received an anonymous call to say that in fact the Claimant was running an internet based business from home.  A range of searches and related inquiries then confirmed that he had registered a new business name and was acting as an authorised reseller for a particular brand of off road equipment.  This was being achieved through his own comprehensive web site, which also had direct bank deposit details for purchases made.

The Client subsequently sent an investigator to the address to make a purchase after contacting the Claimant by email through the web site.  The investigator also filmed the transaction.  The Claimant was presented with this material and the claim ended, but it had taken several years.  The difficulty with repeating this today is that it is now illegal to engage and/or film a Claimant in these circumstances; that adds yet another layer of complexity to what is already a difficult claim management issue.

The main problem in this particular case was that from a surveillance perspective, nothing was happening at the home and the Claimant was certainly not seen doing anything contrary such as driving to work.  The simple explanation of course was that it was basically all happening behind the front fence, indoors, via the internet and in the post. The insurer knew nothing about this of course, until it got the tip off.

You could say that the Client was very lucky to have received the anonymous call on this claim, but equally if the Client had arranged some appropriate background inquiries and searches as part of its normal claim management process, more than likely fraud indicators would have been picked up early on and so alerted the Client to the fact that all was not well.  Experience shows that these types of lateral inquiries are often overlooked and that despite the high cost, a lot of money is often first invested in non-targeted surveillance and independent medical examinations in the hope that ‘something’ might come up. 

The main point I want to make is that the scope for people to do this is now greater than ever.  With EBay and other on line trading services easily accessible, most ISP’s offering free web hosting, ready availability of low cost professional web site designs and the ability to purchase electronic commerce software off the shelf, all you really need is a decent computer, broadband connection, access to electronic banking facilities and a simple courier service.  With this, basically anybody can set up an on line business from anywhere they like.  If that person happens to be an Income Protection claimant, insurers may find themselves unwittingly funding the establishment of that new enterprise, while simultaneously being unable to achieve anything from routine surveillance and independent medical examination.

Obviously each case is different and the challenges of investigating cases like the one outlined are themselves more complex today than they were in years gone by, so it’s critical that expert advice is sought from someone who has the necessary depth of expertise to do the job properly.

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