Misuse of Surveillance in Investigation of Disability Insurance Claims

Whenever a disability insurance company receives a claim, it invariably hires a private investigator to conduct surveillance on the claimant. Ostensibly, the purpose is to expose fraudulent claims. With pressures to save money in today's economy, though, disability insurers are increasingly using investigations not to expose fraud, but to manufacture it. This practice can be especially profitable for the insurer when it comes to high-dollar claims filed by doctors or dentists.

In response to insurers' high demand for surveillance "evidence" to use against claimants, a cottage industry of boutique disability investigative firms has sprung up nationwide. While in the past, an insurance company investigator might simply stop by your house and take a few photographs, today's investigators have become increasingly aggressive. Further, advances in technology have made it possible for even a local one-man operation to perform intensive, sophisticated surveillance operations without a claimant ever knowing.

These developments can be disconcerting, but understanding and anticipating surveillance tactics can help disabled doctors safeguard themselves from unfair treatment.

Manufacturing "Evidence"

The primary problem with today's advanced surveillance techniques is that they provide insurance companies with a comprehensive system for manufacturing "evidence" that the companies can misuse to argue that a claimant is lying about his or her condition. Disability insurance companies use different tactics depending on various factors, i.e., the alleged disability, the claimant, the insurance company, the type of investigation and the budget. Even so, many surveillance methods, such as stakeout operations, tailing, pretexting, and GPS and cellphone tracking, are common across the board.

Disability insurance companies are notorious for using photographs and video footage of people engaging in the most mundane, common, everyday activities as a basis for denying or terminating disability benefits. This is what happened to Evan Werner.[1] A few years ago, The Hartford insurance company (Hartford) made headlines when it wrongfully terminated Werner's disability benefits based on footage produced during a surveillance operation. Werner became disabled after suffering a severe back injury in a car accident. The injury was so bad that he could barely walk, could no longer work and had to file for disability benefits.

Nine different doctors concluded that Werner was totally disabled and could not return to work.[2] Nevertheless, Hartford was apparently determined not to honor his disability claim. It hired an investigator to monitor Werner's daily activities. The investigator stationed outside Werner's doctor's office, followed him home, and videotaped him as he went on an errand.

A few months after the surveillance was conducted, Werner received a letter from Hartford informing him that it was terminating his disability benefits. According to Hartford, the surveillance produced "convincing evidence" that Werner was capable of performing full-time sedentary work. It reached this conclusion based on the private investigator's footage of Werner. According to Hartford, this so-called "convincing evidence" was enough for it to reject nine different doctor opinions and terminate Werner's benefits. What Hartford failed to disclose, however, was that it also had conducted five previous surveillance operations on Werner, and none of these provided any basis for terminating his benefits.[3]

Claim Forms as a Set-Up

Investigators normally plan their surveillance based on the information that a claimant provided to the insurance company in claim forms. Every claim form asks the person applying for benefits to specify activities that, as a result of disability, he or she can no longer perform. Whenever an insurance company hires a investigator, it will tell the investigator what activities the policyholder says he or she can't do. Then, the investigator will tailor surveillance to try and catch the claimant engaging in these proscribed activities.

Insurers also frequently require claimants to complete an "Activity Log." An Activity Log is a questionnaire wherein the disability insurer asks claimants to disclose, hour by hour, their typical daily activities. The logs are then passed on to the investigator, who now knows exactly where the claimant will likely be on a given day and time.

Stakeout Operations and Tailing

Surveillance can be conducted by way of a stationary stakeout operation, tailing or both. A stakeout operation is a surveillance method whereby the investigator stations in front of your home, hoping to document your activities as you come and go. The hallmark feature of a stakeout is that the investigator stays in one place, normally for hours on end. Tailing, on the other hand, occurs when the investigator is no longer stationary, but follows and records the disabled doctor either by foot or vehicle. Generally, an investigator will combine these techniques when monitoring a disability claimant by, for example, capturing footage of the claimant pulling the trashcan outside his home and then having another person drive behind him as he goes to the grocery store or to a doctor appointment.

How can you tell if you are the subject of a stakeout? Normally, an investigator conducting a stakeout will sit in a vehicle, often a van or SUV, on the street outside your home. If you see someone sitting in a vehicle for long periods of time, especially if he or she is using sun screens on the windshield or windows, you may currently be the subject of surveillance. If you think you are the subject of a stakeout, the best course of action is to stay completely inside your house with the shades drawn, and cancel any appointments or errands you had planned for the day. This way, there is no chance of the investigator filming you doing something that could be misconstrued as "evidence" that you aren't disabled.

Because this stakeout behavior has become so well-known, investigators have started to use new tactics meant to conceal their behavior. For example, many PI firms will use female investigators for stakeouts rather than males, based on the assumption that subjects are less suspicious of solitary women than men. Another new tactic PI firms use is to send one "decoy" PI, whether on foot or in a conspicuous vehicle, to purposefully make himself known to the subject. The subject, understandably uncomfortable with being watched, will get in her car and leave, assuming she is getting herself out of the investigator's sight. Then, as the subject drives away, a second, carefully concealed investigator will start tailing and filming her.

Today's investigators will do more than simply sit back and watch; they will proactively lay traps to catch you engaging in activities that you reported you can't do. For example, if you have reported to your insurer that you can't bend forward, a private investigator may leave some change next to your car in the parking lot as bait to lure you into bending forward and picking it up. An insurance company may then use this footage as "evidence" to try and claim that you are not disabled.

So long as the investigator has received a state license to conduct surveillance, staking out and tailing is not illegal per se. Even so, a license to conduct surveillance does not authorize an investigator to harass, stalk or intimidate you. If an investigator hired by an insurance company acts unlawfully, both the investigator and the insurer can face legal consequences. For example, in Arizona, both the insurer and the private investigator are fully liable for any misconduct by the investigator that harms a claimant.[4]

With these surveillance tactics in mind, you must stay vigilant after filing for disability benefits. Be aware of your surroundings. Remember that even if an investigator is authorized to conduct surveillance, he may not set foot on your property, and he may not threaten, stalk or harass you. Contact the police and an attorney if an investigator trespasses onto your property or otherwise makes you feel uncomfortable.

Pretexting

PI firms also often use pretexting to acquire a claimant's personal information from others. The Federal Trade Commission (FTC) defines pretexting as "the practice of getting your personal information under false pretenses."[5] An investigator pretexts when he pretends to be someone else (typically a friend of the claimant), contacts people the claimant knows, and then deceives them into sharing the claimant's personal information. This practice is not only deceptive and unprincipled, but in some circumstances it may also be illegal.

The Gramm-Leach-Bliley Act, for instance, explicitly prohibits anyone from pretexting to obtain "customer information of a financial institution."[6] Despite this federal law, however, many PI firms continue pretexting to obtain sensitive, albeit "non-financial" data, such as information about family or a social security number. They do so because they assume the prohibition in the Act is limited to wrongfully procuring financial information from a financial institution. 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 that the Act is not limited to obtaining financial information from a financial institution:

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.[7]

In other words, Winston says that PI firms are prohibited from pretexting with individuals or financial institutions to obtain any sensitive, non-public information. Those who do so risk a five year prison sentence and a large fine.[8] Unfortunately, this is not enough to deter many PI firms from pretexting. When you file for disability insurance benefits, your chances of becoming a victim of pretexting increase substantially. Therefore, in order to protect yourself, you need to do more than simply rely on law enforcement.

The FTC provides some helpful prevention strategies that are worth mentioning.[9] First, after filing for disability benefits, inform your family members and alert them of the dangers of pretexting. Tell them that only you are authorized to provide your personal information to others. Ask them to notify you in the event they receive a suspicious phone call. Second, do not give out your personal information over the phone or Internet to another unless you know to whom you are giving it; avoid providing sensitive information via text and email, where it can be stored and transferred. Third, be informed. Ask your financial institutions about their policies for sharing your personal information; and find out who has access to your personal information at work. Make sure this information is secure. Finally, know where you leave your personal information in your home, especially if you are living with other people; shred any sensitive documents before you discard them.

Although investigators may claim they only use "appropriate" pretexting methods, those which are not illegal on their own, these same techniques are commonly linked to both identity theft and consumer fraud.[10]

GPS Devices and Cellphone Tracking

PI firms today may also use GPS and other tracking devices while conducting surveillance. Tracking technology is becoming more sophisticated and less expensive. For PI firms, this is a dream come true. Now, instead of waiting hours and hours outside claimants' homes or doctors' offices hoping to find them coming and going, an investigator may simply attach a small tracking device (no bigger than a deck of cards) underneath a policyholder's vehicle and monitor every move from a laptop. GPS tracking can be an extremely effective tool for investigators-it maximizes surveillance efficiency by making subjects much easier to track.

But is GPS attachment legal? Unfortunately, in many jurisdictions this is still an open question. However, a recent U.S. Supreme Court case provides some guidance. In United States v. Jones, the Supreme Court held that attaching a GPS device to a vehicle constitutes a "search" under the Fourth Amendment; therefore, state law enforcement officials are required to obtain a search warrant before secretly installing a GPS device to your vehicle.[11]

Although the issue decided in Jones was a narrow one, limited to the powers of state law enforcement officials under the Fourth Amendment, the Court's decision largely turned on a much broader concept-the physical trespass involved in attaching GPS to another person's vehicle.[12] 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.[13]

In other words, law enforcement officials violated the Fourth Amendment because physically attaching a GPS tracking device to another person's vehicle without that person's knowledge and consent constitutes trespass. This ruling may therefore be used to argue that if an investigator installs a GPS device on your car, he has violated your legal rights. Because of the Jones ruling, many PI firms are now looking into how they can bypass the physical trespass issue altogether by using other technologies in lieu of GPS tracking devices that do not require physical attachment.[14]

One of these new technologies is a stingray.[15] A stingray is a cellphone tracking device that operates as a miniature cellphone tower from inside a investigator's vehicle. The device enables an investigator to connect to a claimant's cellphone-even when it is not being used to make a call-and, after taking measurements of the cellphone's signal strength, to triangulate the phone's location. Since most people tend to always carry their cellphones, the device has proven to be an effective locator.

Like GPS tracking, the law surrounding a PI firm's use of stingray equipment is unsettled. Because stingrays are so effective, investigators will, in all likelihood, continue taking advantage of this gray area in the law by using the equipment until a court or a statute explicitly says otherwise. And, unfortunately at this time, outside of scrupulously checking for small electronic objects under your vehicle every day or leaving your cellphone turned off, there is not a whole lot you can do to protect yourself from GPS and cellphone tracking. Nevertheless, although the law is still evolving in these areas, GPS and cellphone tracking are often considered shady surveillance methods that are not well-received by many judges.

Conclusion

Fueled by demand from the disability insurance industry, private investigators are constantly coming up with new techniques to surreptitiously monitor claimants and catch them off guard. Individuals with legitimate claims often find themselves targeted by improper surveillance or denied benefits based on misconstrued "evidence." The best way to avoid being a victim of surveillance misuse is to stay vigilant and stay informed.

 

[1] Chris Cuomo & Gerry Wagschal, The Insurer Who Spied on Me: Disabled Man Sues Claiming The Hartford Unfairly Cut Off Benefits, ABC News (Apr. 7, 2010), http://abcnews.go.com/GMA/TheLaw/claims-disabled-people-hartford-stopped-insurance-benefits-surveillance/story?id=10301625#.T-dN1r9nMq4.

[2] Id.

[3] Attorneys' Multi-Case Battle with Hartford Insurance Over Use of Surveillance Video and Intimidation Tactics To Deny Disability Claims Featured on Good Morning America, Mass Media Distribution, LLC (last visited June 24, 2012), http://www.mmdnewswire.com/disability-insurance-law-group-7847.html.

[4] Walter v. Simmons, 169 Ariz. 229, 238 (Ct. App. 1991) (holding that "although an insurer may delegate the performance of its duty of good faith to a non-servant, it remains liable for the actions taken by this delegate because the duty of good faith itself is non-delegable").

[5] Pretexting: Your Personal Information Revealed, Federal Trade Commission (last modified Apr. 24, 2009), http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre10.shtm.

[6] 15 U.S.C.A. sec. 6821(a).

[7] Jimmie Mesis, The FTC on Pretexting: The PI Magazine Interview with Joel Winston, PI Magazine, Jan./Feb. 2005, at 43, available at http://www.pimagazine.com/ftc_article.htm (emphasis added).

[8] See 15 U.S.C.A. sec. 6823.

[9] See Pretexting: Your Personal Information Revealedsupra note 5.

[10] Id.

[11] United States v. Jones, 132 S. Ct. 945, 949 (2012).

[12] Id.

[13] Id.

[14] Things to Look for When Hiring a Private Detective Agency, Shannon Detective Services, Inc. (last visited June 24, 2012), http://www.shannondetectiveservice.com/contactus.nxg.

[15] Eric Lichtblau, Police Are Using Phone Tracking as a Routine Tool, N.Y. Times, Mar. 31 2012, http://www.nytimes.com/2012/04/01/us/police-tracking-of-cellphones-raises-privacy-fears.html?_r=2&pagewanted=all.

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