Posted on Jul 15, 2011 by Sergio Ulloa
In what could be the first fraud conviction of its kind in the UK, a Welsh man who made a false insurance claim has been found guilty of contempt and jailed for nine months after photos of him holidaying around Europe with his wife were found on social media website Facebook.
Graham Loveday, a former truck driver, claimed to be seriously disabled after being injured in an automobile accident in 2006. He sued for a six-figure sum in damages plus lost earnings of over £25,000 (US$40,000) a year from senior motorist Edward Nield, who was insured by Acromas (known as Saga at the time). Mr. Loveday claimed to be wheelchair dependent, unable to drive and phobic about travel and other activities.
The UK auto insurance industry is particularly sensitive towards egregious bodily injury claims. Acromas was given permission to pursue a legal case last year, and followed through with surveillance over the subject. While the insurer believed Loveday's damage claims were exaggerated beyond his housebound statement, it did not contemplate the full scale of the deception. After the initial evidence was obtained last year, Acromas agreed to pay out over £3,000 (US$4,800), which would be offset against upcoming legal fees.
Upon discovery of Mr. Loveday's Facebook profile and accompanying pictures, Acromas determined that the couple had been caravanning across Italy from May to July 2009, just a few weeks before the claimant had signed an insurance document claiming that he continued to be tormented by a 'crippling' fear of travel. The thorough evidence readily available on Mr. Loveday's Facebook page documented him driving all the way from his home in Port Talbot, Wales, to the Italian lakes and back; a 2,000-mile road trip. The Lovedays had been the subject of a parallel investigation by the UK Department for Work and Pensions, who first uncovered the holiday photos.
After viewing the overwhelming evidence and sentencing the insurance fraudsters, High Court Judge Sir Anthony May, commented that the Loveday's deceitful claim was a "public wrong, not just a private matter between you and an insurance company," adding that " telling deliberate lies in court proceedings undermines the fabric of justice which itself is part of the fabric of society." It is hoped that this conviction will send out a strong deterrent against others who may act in bad faith.
Marcus Grant, legal counsel for Acromas, acknowledged that Loveday had suffered damages from his 2006 accident but was very far from the level of housebound disability he claimed for. His dishonest actions and statements since then have made matters worse and neither the insurance industry nor the UK judiciary will tolerate such behavior. Furthermore, Acromas' counsel explained that if a user has an open profile on Facebook, and there exists reasonable grounds to suspect fraud, under current law there is nothing wrong with using your online material in relation to data privacy.
Indeed, your friends and coworkers are not the only ones who are now interested in what you are sharing on social media sites like Facebook and Twitter. Insurance companies are looking to these online social networks to learn about and engage with their clients. These online resources have proven particularly valuable to insurers looking for potential evidence that certain claims are illegitimate
While insurers don't have the capacity to check everyone's individual Facebook page, investigating suspicious and expensive claims on social media sites is becoming a common industry practice. This was evidenced in 2009 when Canadian insurance giant Manulife allegedly cut a depressed woman's disability benefits after viewing photos on her Facebook profile page showing her as 'happy.'
Technology companies have taken note and are developing tools that will enable insurers to better monitor social media data to improve marketing attempts and perhaps even adjudicate risk and pricing strategies. Insurers are demanding a more automated process for searching social media to improve their marketing and communication efforts. Drawing a large online audience and building a solid subscriber base on sites like Facebook, Twitter and LinkedIn has important value to many insurers
. When a social media user 'likes' or 'follows' a brand's content, it can further develop and build traffic among that user's interconnected social group. These companies remain very interested in what consumers are saying about them online and want to use the same social networking tools to rapidly engage with them, address any grievances and hold onto their customers.
The rise of social media is an astounding modern phenomenon. In some developed nations, upwards of eighty percent of computer users are member of at least one online social media network and they are connected to these networks for nearly a quarter of their time online. This rise in inter-connectivity presents new opportunities for insurance companies to engage with and expand their customer base as well as enhance their ability to sniff out fraud and police their market more effectively.
Insurance Company Mentioned
Acromas Holdings, through its subsidiaries, sells a variety of protection products in the United Kingdom and Ireland, including roadside assistance, motor insurance, home insurance, health insurance and travel insurance policies. The company was founded in 2007 and is based in Folkestone, the United Kingdom.