Ross Compton woke up one morning to find his house on fire. The Ohio man tossed a large load of possessions outside, then
climbed out of his bedroom window as
the flames engulfed his home.
Or so he said.
Creative investigators subpoenaed data
from his pacemaker. Someone in Compton’s condition couldn’t possibly have
clambered around the way he claimed,
the downloaded data allegedly shows.
Prosecutors say he torched the house for
the insurance money.
Compton’s pacemaker case is churning national headlines. His unusual case
rings privacy bells that could deeply affect the fraud fight, for better or worse.
America is a giant black box, morphed
by the emergent Internet of Things (Io T)
and big data. Growing motherlodes of
personal consumer data are being gen-
erated by a digitally hyper-connected
society. Endless zettabytes of granular
information are being stockpiled about
our activities, thoughts and intentions
throughout each day.
Some 50 billion IoT devices will silently connect, sift and store information
about people’s daily lives by 2020.
Fraud investigators are gaining new
superpowers from these data gushers.
Courts widely find much of this personal
data is discoverable for insurance-fraud
cases. Judges regularly overrule the defense’s privacy objections if investigators
follow proper procedures for legally obtaining data. Still, vigorous privacy debates are at work in America and privacy
is far from dead.
Law enforcement can routinely invoke
subpoenas to obtain personal data in
criminal cases. Insurer subpoena access
is derived solely from policy conditions
generally triggered by an insured’s bad-faith civil action after the insurer denies
a claim for suspected fraud. Much is at
stake in these costly suits.
Yet most insurance policy contracts
and privacy notices are outdated. They
were written decades ago during a time
of typewriters and manila folders. The archaic wording doesn’t reflect today’s ever-expanding data and advancing technology. Nor does it clearly outline anti-fraud
obligations in a digital era. Increasingly,
insurers risk having data searches in civil
fraud actions and investigations declared
undiscoverable as privacy violations.
Insurers have the opportunity to mod-
ernize their privacy best practices, and
policy contract and privacy language.
The language should clearly address in-
surance fraud in the permitted scope of
private information and data collection.
It’s a careful balance to preserve insurer
rights to root out costly fraud schemes
while protecting people’s legitimate privacy
rights. Insurers can become more widely
viewed as responsible corporate citizens
who are helping to shape the privacy dis-
cussions for the benefit of all concerned.
THE DEATH OF
How big data is opening
up a world of discoverable
By Dennis Jay