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Concerns Persist on Insurance Company Social Media "Spying"

Some people out there understand insurers' actions, but carriers need to do a better job of communicating the impact of fraud to the general public and honest policyholders in particular.

In October we wrote in this space about insurance fraud fighters being accused of "snooping" on Facebook accounts, and I&T's Nathan Golia recently authored a popular piece this month about insurers pushing the boundaries of social media. Yesterday I came across another couple of items showing increasing public concern about insurers social media practices.

A Baltimore Courts Examiner story warns about insurance companies' use of social media sites to "spy" on "injured workers" with the purpose of denying them benefits -- as opposed to, say, detecting fraud. This is the kind of even-handed reporting on the insurance industry that we've come to expect from the mass media, regrettably, but the topic if not the predictable slant ought to be of interest to insurance carriers.

It's clear that the average person doesn't fully appreciate the exposure created by use of social media, which means that they will consider insurers anti-fraud use of this channel as an intrusion, and potentially a more sinister one than merely tapping social media for marketing purposes. The message insurers need to get is that they continue to fail to communicate the magnitude of the problem of fraud generally and its cost to the general public and policyholders in particular. The need to get that message across becomes more urgent as insurers use new channels of public information to detect fraud --'fraud detection has always been a delicate matter, but it is especially delicate if new methods are perceived as violations of privacy.

The Examiner story was commented on by blogger Instalawyer, who offered five "worthwhile tips" for social media users. Encouragingly, the comments demonstrated that there are at least some people out there in the general audience who appreciate the reason behind insurers' tactics. In fact, the very first commenter had this to say:

Also, don't commit insurance fraud. It makes the other five warnings somewhat less important.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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