Your Social Networking Postings Can Get You in Trouble

Imagine that you went on medical leave from your job and received disability benefits for more than one year after which the benefits stopped. You have no idea why. You contact the insurance representative for your employer and find out that your insurance company saw photos on your Facebook showing you frolicking at a beach and hanging out at a pub. The company concluded you were depression-free and able to work. That is what happened to one employee. The company just assumed from the pictures that she was a fraud without investigating further before terminating her benefits.

Now there's another reason to be careful about what you post on Facebook: Your insurance company may be watching.

Social-networking websites such as Facebook and MySpace have become the go-to places where employers, college admissions officers and divorce lawyers can do background checks. Armed with the information, police have caught fugitives, lawyers have discredited witnesses and companies have discovered perfect-on-paper applicants engaged in illegal or simply embarrassing behavior. And now insurance companies are exploiting the free, easily accessible websites.

Detecting Insurance Fraud

Such sites have become the latest tools in detecting fraud, which the insurance industry says costs the U.S. as much as $80 billion a year and accounts for 3% to 10% of total annual healthcare spending. The Coalition Against Insurance Fraud reports that 36% of companies say they do use social media as part of their investigations.

Questionable insurance claims have increased 27% during the past few years, according to the National Insurance Crime Bureau, a nonprofit that investigates suspect claims for insurance partners such as Allstate and State Farm. As fraud has grown, insurers have new data sources to try and fight it. From traditional but now digitized industry watch lists to geographic information systems mapping of hot spots, data sources are growing rapidly.

Investigators who once followed people with cameras now sit behind desks "mining databases and searching Facebook," said Frank Scafidi, spokesman for the National Insurance Crime Bureau. "They look out for things that don't add up," he said, "like someone who claimed they hurt their back too badly to work and then bragged on Facebook about running a marathon."

Protect Yourself: Privacy Settings

Mike Fitzgerald, a Celent senior analyst, said life insurance companies could find social media especially valuable for comparing what people will admit about lifestyle choices and medical histories in applications, and what they reveal online.

Lawyer John Beals of Piering Law Firm in Sacramento requires all his clients to either shut down or tighten privacy settings on their social media profiles as a precaution, he said.

Insurance companies will "bring up anything — photos of you drinking to prove that you have bad character," he said. "Even if it's unrelated, just the impression that you are doing something wrong can sink a case."

Lawyers and industry experts said that one of the dangers for consumers is people's desire to present themselves in the best light, even if it hurts an insurance claim.

"The whole thing is just symptomatic of technology running ahead of the people who are using it," he said. "It's kind of like the early years of flight when planes are crashing all over the place. Society has not come to terms with how to manage social networking."

Ethics, Social Media Postings, and Insurance Fraud

I find that all too many people post photos or go on Twitter and make comments that can come back to haunt them at a later date. We tend to act first and then think about whether our actions were proper afterwards. Protect yourself by asking the following questions: Could my postings have negative effects for me down the road? Might someone with access to my social media postings misinterpret what they see? Are my postings critical of others who may influence my life down the road?

Finally, ask yourself the following questions:

How would I feel if my posting made the front pages of the newspaper? Would I be proud to explain it co-workers, friends and family? Would I be proud of what I said or did in the posting?

Ethics is all about how our actions affect others. Ethical people think of the potential consequences of their actions before making a decision to act one way or the other. Once the action has been taken or spoken words uttered, it’s oftentimes too late to undo the damage.

Blog posted by Steven Mintz on April 21, 2016. Dr. Mintz is a professor in the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at www.ethicssage.com.