We’ve talked before about how insurers often hire private investigators to follow and investigate claimants. While the purported goal is to find claimants who are “scamming the system” and faking a disability, investigators often employ invasive tactics in their attempts to gather videos and other information requested by insurers.
Unfortunately, all too often investigators go too far and claimants feel threatened or endangered by these investigators’ actions. The question then arises–at what point do insurance companies become legally liable for the actions of investigators that they hired? Can you sue your insurance company for invasion of privacy?
At least one court thinks so. In Dishman v. Unum Life Insurance Company of America, 269 F.3d 974 (9th Cir. 2001), the Court agreed with Dishman that he could sue Unum for tortious invasion of privacy committed by investigative firms hired by Unum. In this case, the investigative firms in question aggressively attempted to find out employment information on Dishman by (1) falsely claiming to be a bank loan officer; (2) telling neighbors and acquaintances that Dishman had volunteered to coach a basketball team and using that as a pretext to request background information about Dishman; (3) successfully obtaining personal credit card information and travel itineraries by impersonating Dishman; (4) falsely identifying themselves when they were caught photographing Dishman’s residence; and (5) repeatedly calling Dishman’s house and either hanging up or harassing the person who answered for information about Dishman.
Because the underlying Unum disability insurance policy was an ERISA policy, the Court assessed whether Dishman’s invasion of privacy claim (which was based on California law) was precluded by statutory language which states that ERISA “shall supersede any and all state laws insofar as they . . . relate to any employee benefit plan.” 29 U.S.C. Sec. 1144 (a). The Court, in its decision, went on to discuss a lack of consensus on this issue, but ultimately ruled that, in this particular instance, “[t]hough there is clearly some relationship between the conduct alleged and the administration of the plan, it is not enough of a relationship to warrant preemption” of state tort law, because Dishman’s “damages for invasion of privacy remain whether or not Unum ultimately pays his claim.” In other words, the Court explained, ERISA law does not provide Unum with blanket immunity for “garden variety tort[s] which only peripherally impact plan administration.”
It should be noted the Court in Dishman cautioned that there is no consensus regarding how far ERISA reaches, and not every disability is governed by ERISA, so not every court will necessarily reach the same conclusion as the Dishman court. This is a complicated area of the law, and whether or not you can sue your insurer for invasion of privacy will largely depend on the facts of the case, the type of policy you have, whether your jurisdiction recognizes an “invasion of privacy” cause of action, and the existing case law in your jurisdiction.
Information offered purely for general informational purposes and not intended to create an attorney-client relationship. Anyone reading this post should not act on any information contained herein without seeking professional counsel from an attorney.
In Part 1 of this post, we discussed “stingrays”—a relatively new technology that is becoming more and more common. In Part 2, we will be discussing another new technology that is becoming increasingly prevalent as a surveillance tool—drones.
What is a “Drone”?
The term “drone” is a broad term that refers to aircrafts that are not manned by a human pilot. Some drones are controlled by an operator on the ground using remote control. Other drones are controlled by on-board computers and do not require a human operator. Drones were initially developed primarily for military use. Recently, drones have also been utilized for a wide range of non-military uses, such as aerial surveying, filmmaking, law enforcement, search and rescue, commercial surveillance, scientific research, surveying, disaster relief, archaeology, and hobby and recreational use.
How Does Drone Surveillance Work?
Typically, drones are connected to some type of control system using a data link and a wireless connection. Drones can be outfitted with a wide variety of surveillance tools, including live video, infrared, and heat-sensing cameras. Drones can also contain Wi-Fi sensors or cell tower simulators (aka “stingrays”) that can be used to track locations of cell phones. Drones can even contain wireless devices capable of delivering spyware to a phone or computers.
Over the past few years, several new methods of surveillance have been developed. These new technologies create a high risk of abuse, and as they become more and more commonplace and affordable, that risk will only increase. Unfortunately, in the area of surveillance, the law has not always been able to keep up with the pace of technology. In many respects, the rules regarding the use of new surveillance technologies remain unclear. Consequently, the most effective way to guard against intrusions of privacy is to be aware of the expanding abilities of existing technology, because you never know when someone could be conducting surveillance.
ACLU Website: https://theyarewatching.org/technology/drones.
In previous posts, we have discussed how insurance companies will hire private investigators to conduct surveillance on disability claimants. In the next two posts, we will be discussing some modern surveillance technologies that most people are not very familiar with – “stingrays” and drones.
What is a “Stingray”?
A “stingray” is a cell site simulator that can be used to track the location of wireless phones, tablets, and computers—basically anything that uses a cell phone network.
How Does Stingray Surveillance Work?
A “stingray” imitates cell towers and picks up on unique signals sent out by individuals attempting to use the cell phone network. The unique signal sent out is sometimes referred to as an International Mobile Subscriber Identity (IMSI) and it consists of a 12 to 15 digit number.
Once the “stingray” connects to a device’s signal, it can collect information stored on the device. Usually the information collected is locational data, which is then used to track the movement of individual carrying the device.
Additionally, some “stingray” devices can intercept and extract usage information, such as call records, text messages, and Internet search history, from devices it connects to. Some “stingrays” are even able to intercept phone call conversations and deliver malicious software to personal devices.
Stay tuned for Part 2, where we will discuss drone surveillance.
ACLU Website: https://theyarewatching.org/technology/stingray.
At some point after you’ve filed a disability insurance claim, your carrier may contact you to arrange a field interview. Also called a “field visit,” a field interview is when a disability insurer hires a representative to come meet with you face-to-face to talk about your benefit claim. Most times, the company will ask that you meet the field representative at your own home or office.
Your claims analyst will probably tell you that the field interview is just a way to get to know you better, or to help the company gain a better understanding of your claim. What the claims analyst won’t tell you are the real reasons why insurance companies put so much time and effort into planning in-person field interviews, such as:
- To take your picture so that a private investigator will recognize you during surveillance.
- To find out what your house and/or office looks like to further aid in surveillance.
- To look inside your house and see if you’ve been doing a lot of housework, paperwork, cooking for yourself, etc., all of which (according to the insurance company) can mean you’re able to work in your own occupation.
- To see if you look like you’re in pain, if you can sit down for a long period of time, or if you can walk without any gait abnormalities.
- To see if you look like you might have current monthly income from sources other than your occupation (i.e., if you have a nice car, a big house, a boat, etc.).
- To drop in and try to interview your spouse, former business partners, office manager, or neighbors.
- To try and get you to relax and open up, or to catch you off guard so that you give information the company can use against you.
In our next post, we’ll discuss what you can expect during the field interview itself.
A recent disability insurance case from the Southern District of California, Barbour v. Unum Life Insurance Company of America, 803 F. Supp. 2d 1135 (S.D. Cal. 2011), illustrates yet another way in which insurers sometimes improperly use surveillance to deny or terminate policyholders’ claims. In this instance, Unum (parent company of Paul Revere, Provident, and UnumProvident) actually based its decision to deny a claimant benefits on surveillance footage of the wrong person.
Patricia Barbour was insured under a group disability insurance plan through her job as a school principal. Ms. Barbour filed a claim under her policy due to “severe right quadrant abdominal pain—inflammation small intestines,” for which she had undergone two hernia surgeries, with serious complications. She and her physician explained to Unum that her condition restricted her from driving, walking or standing, and sitting for extended periods of time, and that she was totally disabled from performing hers or any other occupation. Ms. Barbour also reported that she used a cane, and that she needed her mother’s help for her daily activities.
As typically occurs, Ms. Barbour’s claims consultant at Unum retained a private investigator to perform three days of surveillance on Ms. Barbour.
Private investigators hired by disability insurance companies pretext to acquire your personal information from others. They do this by pretending to be someone else (often you), contacting people you know, and then probing them for your sensitive information. Pretexting is not only deceptive and unprincipled, but it may also be illegal. Private investigators engage in this conduct to produce evidence that will enable insurance companies to deny your disability insurance claim.
The Gramm-Leach-Bliley Act specifically addresses pretexting as it pertains to obtaining personal information from financial institutions. Many private investigators believe the scope of the Act is limited to pretexting with financial institutions only, therefore, they assume other pretexts—those not involving contacts with your financial institution—are legal. This is a misconception, however, according to Joel Winston, the Associate Director of the FTC, Division of Financial Practices. In an interview with PI Magazine, Winston clarifies the scope of the Act:
First, we should dispel the misimpression, if there is one, that the pretexting provisions of [the Gramm-Leach-Bliley Act] only apply if the pretexter is getting “financial information.” Actually, what the statute says is if you are getting any personal, non-public information from a financial institution or the consumer, that is covered by the statute.
(emphasis added). Winston also answers other questions about pretexting as they relate to private investigators. Although the Q-A session is mainly designed to illuminate private investigators of legal fences surrounding the practice of pretexting, it is also an excellent source of information for those who fear they might become victims of unlawful pretexts, or for people who want to learn more about the illegality of pretexting.
To view the article click here.
Insurance companies often will hire a private investigator to aid in terminating disability insurance claims. Ostensibly, the purpose of a private investigator is to expose dishonest individuals of fraudulent disability insurance claims. A private investigator may even advertise as a “Disability Insurance Fraud Specialist.” All too often, however, insurance companies and their investigators are not seeking to expose fraud, but to manufacture it. They produce “evidence” only to aid in denying disability insurance claims—even wholly legitimate ones. They do so because there is a strong financial incentive to deny disability insurance claims.
At Comitz | Beethe, we have dealt with these insurance companies and their private investigators time and again. We know how they operate and how to prepare our clients. We have developed a short list of basic information about private investigators so you can know what to expect:
- When are they watching? In a previous post, we noted the five most popular times for disability surveillance: (1) holidays, (2) birthdays, (3) weekends, (4) activities claimant listed in insurance company’s activity log; and (5) near the end of fiscal quarters.
- Who are they? Typically, private investigators are just as the name indicates – private people from private companies. Disability insurance companies contract with these private companies to conduct surveillance on disability claimants.
- What are their surveillance methods? Particular tactics will vary depending upon the private investigator, the disability insurance company and the disability claimant. However, many methods are common across the board. Basically, the private investigator will inconspicuously follow a disabled claimant with a video-capturing device as the disabled claimant undergoes day-to-day activities. If the private investigator has difficulty locating the disabled claimant, the investigator may use different tactics, such as pretexting, stake-outs or tracking devices, to locate and track the claimant. Our last blog post describes these other tactics in detail.
The private investigation industry has a reputation for its shady practices. At Comitz | Beethe, we uncover and expose private investigators’ objectionable “tracking” methods to protect our clients. We hold insurance companies and their private investigators accountable under the law.
Private investigators use a variety of tactics to produce evidence that may be used to deny your disability insurance claim. Below is a list of different private investigator surveillance methods and terms.
Disability Surveillance – refers to the monitoring, recording and documenting of activities or behavior of another. In the disability context, this surveillance is called sub rosa surveillance. Sub rosa, a Latin phrase which translated means “under the rose,” denotes the secretive and clandestine nature of private investigator actions.
Disability Stake outs – according to Shannon Detective Service, Inc.—a private investigation company whose client list includes Arizona Counties Insurance Pool, CNA Commercial Insurance, Danielson Insurance, Farmers Insurance, Federated Mutual Insurance Company, Hartford Insurance, Insurance Company of the West, Liberty Mutual Insurance, Nationwide Insurance, Progressive Insurance, Seabright Insurance Company, Sedgwick Claims Service, Travelers Insurance and Westfield Insurance—this is a stationary surveillance method by which a private investigator documents and records a claimant’s activities. The hallmark feature of a stake out is that the private investigator does not move or follow the disabled claimant. In a typical stake out operation the private investigator may station in front of your home or office and record you as you come and go. The goal of the stake out is to produce evidence that will enable the insurance company to deny your disability insurance claim. An ABC News story shows how an insurance company successfully denied a doctor’s disability claim with evidence produced during a stake out.
Disability Pretexting – the Federal Trade Commission (FTC) defines pretexting as “the practice of getting your personal information under false pretenses.” Private investigators are engaging in illegal conduct when they use pretexting to obtain your personal information from a financial institution. See 15 U.S.C. § 6801, et seq.
Here’s an example of how this works: someone pretends to be you and calls your bank. The person claims to have forgotten your checkbook, account number, social security number or other sensitive information. He then tries to get this information from the bank. Such conduct constitutes pretexting and violates federal law. Id.
Although private investigators claim to use only “appropriate” pretexting methods, methods which are not illegal per se, these are the same techniques which are used to facilitate identity theft and consumer fraud. Check out the FTC website for more information about pretexting and how you can protect yourself.
Disability Tracking Devices and GPS – this area of the law is still evolving. In a recent Supreme Court case, United States v. Jones, the Court held that attaching a GPS device to a vehicle constitutes a “search” under the Fourth Amendment; therefore, law enforcement officials need a warrant before installing the device. 132 S. Ct. 945, 949 (2012). Although the Court did not address the attachment of GPS devices in the private investigation context, its decision largely turned on the physical trespass involved in attaching a GPS device to another person’s vehicle. Id. The Court stated:
It is important to be clear about what occurred in this case: The Government physically occupied private property for the purpose of obtaining information. We have no doubt that such a physical intrusion would have been considered a “search” within the meaning of the Fourth Amendment when it was adopted.
Id. Therefore, this ruling may be used to argue against private investigator installations of GPS devices since such installation would also constitute a physical trespass. Private investigation companies, such as Shannon Detective Services, Inc. (SDS), are now looking how to bypass the physical trespass issue altogether through implementation of other technologies that do not require physical attachment. Here are two examples of other technologies cited from the SDS website:
- Disability stingrays (a device that can triangulate a cell phone signal to locate a user) will become popular in the future as a way to skirt around the new GPS laws for law enforcement.
- Disability ping of cell phones (by accessing a user’s cell phone GPS chip) will also fill the gap created by GPS legislation since the FCC has mandated GPS chips to be installed in all new cell phones by 2018.
As we have discussed in the past, surveillance is a tool commonly used by disability insurance companies to analyze – and often deny – legitimate disability claims. When surveillance is taken out of context or misconstrued, it can lead to unfair disability denials.
All too often, disability insurance companies expect people with disabilities to stay at home, in bed. What they fail to realize is that most doctors actually encourage disabled claimants to try some activities of daily living, light physical therapy, or social interaction. Just because a disabled person can eat chips at a restaurant with family doesn’t mean he can perform all of the duties of his former occupation. Nevertheless, disability insurers often try to get any physical activity on camera and use it as proof that the claimant is not disabled.
Many people filing for private disability wonder when private investigators are watching them. After years of dealing with disability insurance detectives, we have recognized the five most popular times for surveillance of policyholders:
- During holidays. This is when policyholders are likely to be out of the house enjoying time with family and friends.
- On the claimant’s birthday. Just as on holidays, a disabled claimant is likely to push themselves to get out and enjoy the day.
- Over weekends. During weekends, insureds or more likely to attempt minor errands or go outside with family.
- Any time they have a chance of catching a claimant engaged in physical activity, based on information provided by the claimant on activity logs and in interviews. For example, if the claimant wrote on an activity log that he takes his dogs out in the morning, the private investigator will be there with a camera to document the insured walking in the yard.
- Near the end of fiscal quarters, when the insurance company is under pressure to save money by denying or terminating claims.