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Steven Lee

Are you ‘prepped’ to find out how good your Investigative/Surveillance vendor truly is?

By | Professional Investigators | No Comments
  • are they preparing properly to complete the assignment the first time:


There will inevitably be many in my industry not very happy with this article. And I have to tell you that I am okay with that.  I have been in the Private Investigation business specializing in Insurance Claims/Fraud Investigations for 26 years.  I have had more investigations move through my hands than any other P.I. in the State of NJ, and possibly the Tri-State area.  I have always been known for my ability to investigate by computer, even prior to the internet.  This is what separated me from others in this industry, especially in the 90’s.  I have a knack for data, for reading between the lines, knowing how the data is obtained, and most importantly how to stack search.  As a P.I., I discovered that my data talent helped me investigatively.  As a business owner I have discovered that my data talent has hurt me financially; but I am okay with that.  I take more pride in doing a great job and more importantly exceeding my client’s expectations.  It was important to me that all of my employees were trained on understanding data and how to apply that data to their investigation.  No matter the assignment that comes into our office we fully prep each case so that the field investigator is armed with all available pertinent data.  We do not charge for prepping as it is built in to our hourly or flat rate fees.  The purpose for this file prep is to make the field investigator more efficient, and I have found it absolutely does.

The issue at hand is that many investigation companies do not prep every case; and if they do prep, it is only on surveillance cases. Most likely they will charge for the prepping, and then there is the question of whether it was prepped properly.  Now, this article is not about how great we are and how bad everyone else is at prepping a file.  You might learn after reading this that your vendor is doing their part.  The intent of this article is to educate the Claims Manager/Adjuster, SIU rep and Defense Attorney on how to determine if your investigation vendor is prepared when they work your case, OR are they instead on a scavenger hunt at your expense, working 1hour/1 mile/1 toll at a time.

I have to imagine you now understand why an investigation company might not want to prep every assignment. First and foremost is the cost to prepping a file.  For even the simplest assignment, such as a statement of a witness, we invest on average $38 in data fees and in-house prep time.  From that data prepping we look to confirm the subject’s residency or identify a new address, obtain a cell and residential number, identify a motor vehicle, and possibly an employer.  While doing this we will also obtain the names, addresses and phone numbers for relatives of the subject.  The alternative is the vendor does not prep the case and simply assigns it to the field investigator.  That field investigator will then go to the address provided by you the client (possibly during work hours) and if the subject is not home or does not live there, that investigator has no alternative information to complete the assignment.  That same investigator might even visit the same address 2 or 3 times only to tell you that no one was home and/or no one there knows the subject.  You then receive an invoice for 2 to 3 visits at 2 to 3hrs per visit, accompanied with mileage, and possibly tolls and parking fees.  I would estimate each visit to cost around $225 (being conservative) and you now have an invoice for $600 to $750 while the statement was never obtained.  The report will probably recommend a Locate Investigation.  If you agree, you might receive another $200 invoice and then another round of field visits.  In this example, a witness statement case could cost you over $1,000 and you might not still have the statement.

This same investigation, when prepped properly in advance would enable the Field Investigator to contact the witness by cell phone, or at his/her employer, or via a relative to schedule an appointment ahead of time. One field visit and the assignment is completed.  Now of course not every assignment works out that way, but most should.

So what can you do to determine if your vendor(s) management/ownership is not preparing their investigators, which in turn allows them to bill you more? Look for the following:

  1. Do they start their report with the prepping data they obtained? And if so, how extensive is it? If you see terms like ‘Internet Search’ you should be concerned. This is an archaic term that means they did a free Google search to ID a residential phone number. Your child could do better for you.
  2. Does the report reflect phone contact attempts made prior to visiting the address? And if so how many? There should be at least 3 phone attempts made to more than one number.
  3. Did they only call the number you provided with no success and then go straight to a cold call visit?
  4. Is the first step in the investigation a cold call visit to the provided address? If so, how many times?
    1. Do they list the days and times they visited the address?
  5. Did they attempt other ways to contact the subject like Facebook/LinkedIn/Relatives/Employer, or is the effort the same in each report.
  6. Does the report end with ‘we suggest’ or ‘we will now conduct’ a Locate Investigation?

If you see some of the above on a few of the reports you receive it is most likely that your vendor is not prepping the assignment thoroughly, or at all. To be efficient is to accomplish more and bill less.  Since most investigators are paid by the hour they would also want the re-visits.  And since the company makes more money, they don’t make issue with it.  Please understand that rush cases and even cases that are properly prepped could result in a few visits with no success.  But I feel this should be a rarity and not the norm.

 In the following two examples, the investigation vendors were tasked with obtaining signed Answers to Interrogatories from an insured. They were provided with only a name and address. The following results are real, taken from real reports submitted by the vendors.

 In Example 1, the vendor first conducts database prepping on the insured and confirms the current address.  The vendor also identifies a mobile phone number listed to the insured.

The Investigator’s first action is to call the mobile phone and leave a detailed message for the insured, explaining the investigation and requesting a return call. The insured returns that phone call later the same evening, and they discuss the interrogatories.  The insured advises that due to a hectic schedule he would prefer to meet on the weekend, but requests a call back over the weekend to secure a date and time.  The Investigator, unable to reach the insured again on the phone on Saturday or Sunday opts not to travel to the residence; based on their previous conversation the Investigator instead leaves additional voice messages and also sends text messages to the mobile phone.  When the Investigator eventually receives a return call the following week, the insured apologizes and explains a busy work schedule.  They then agree to meet the following Saturday.  The Investigator meets with the insured on a Saturday afternoon and the Interrogatories are completed in one visit.

Invoice Total $328.25

In Example 2, the vendor conducts no database prepping on the insured and the Investigator’s first action is to cold call the provided address on a Thursday afternoon.  Finding no one home, additional cold call visits are made to the provided address on a Sunday morning and then on a Monday evening.  The final report indicates that efforts to locate the insured and complete the Interrogatories were unsuccessful.

Total Invoice $586.90

In the above examples, the investigation which was not prepped in advance cost the client approximately $260 more, and the end result was an unsuccessful, an incomplete assignment. This type of handling adds up over time, assignment after assignment.

Effective Surveillance is a Team Effort

By | Surveillance | No Comments

Surveillance is widely used in the insurance claims and risk management business.  Large and small claims have been mitigated or denied using this age-old but highly effective tool.  The decision to use surveillance can be based on a wide variety of factors, right down to an experienced claims professional’s ‘hunch.’  However, typically the reasons to use surveillance include one or more of the following:  the level of exposure of the claim, suspicious accident details, contradicting medical evidence, and leads regarding the subject’s activity level or work status.

When used properly, surveillance can be a powerful risk management tool for employers and claims administrators.  It is employed to document a subject’s activities and capture anything found inconsistent with alleged injuries for use in claims evaluation, settlement, or in a trial setting. Certainly, surveillance video contradicting a claimant’s allegations can carry significant weight in the midst of any negotiation, hearing or trial.

Making the case and making it stick

When it comes to employing surveillance on any particular claim, obtaining a favorable settlement or verdict is really a ‘team’ effort.  Choosing the right surveillance vendor is vital, but the whole process begins with the claims professional and the file selection process.  Surveillance cannot and should not be used on every claim, so identifying those claims with the most potential is crucial.  Once the vendor has been selected, authorizing the appropriate budget for the case should be carefully considered, as each scenario is different.  You only get out of surveillance what you put into it!

Next is communicating all known information before and during the investigation and assigning the right defense attorney to present any video evidence.  No matter how much damaging video is obtained, if the defense attorney does not have experience with video evidence then it could all be for nothing.  This doesn’t only mean having knowledge of the discovery rules, but also the ability to be able to bargain with and/or use video evidence at trial with confidence.

If your surveillance vendor is consistently not returning useful information or video, first examine the whole process from claim selection to communication amongst each party involved to identify any breakdown. If no clear breakdown exists, it is time to more closely evaluate your vendor.  Discuss the vendor choices of colleagues and their experiences with results.  Obtain the opinion of your defense counsel.  Lastly, express your concerns with your vendor, listen to their perspective and discuss what can be done to improve results.

If things don’t improve, it’s time to move on.  Be sure to rate your perspective surveillance vendors and know what percentage of video your vendor obtains on a whole and on your referrals.

We all know how one bad loss can affect the bottom line; a solid, consistently performing team can be your greatest asset in claims defense and mitigation.

Sizing-up the National vs. Regional Investigation Service Options

By | Professional Investigators | No Comments

From 30,000 feet it is hard to draw distinctions between the insurance investigation services of one well-known provider and the next. For the most part, we all do pretty much the same thing, fraud investigations and surveillance. In addition, some may have a digital investigation platform of varying value, and others may have a unique additional specialty for which they are best known.

For years, however, we have seen that optimization has spoiled some of the biggest names. After years of consolidation, many of the small and mid-size players that were acquired along the way now have to deal with a national structure and rigid corporate guidelines. These operating requirements demand certain profit and streamlining efforts. There is no doubt a strict corporate atmosphere smothers investigator intuition, when, in fact, it is a key ingredient to the recipe for building a long-lasting and respected reputation as an effective vendor.

Investigating the Investigators

While all industries must evolve, they cannot indefinitely absorb predatory cost cutting practices without further eroding confidence in the product. An informal review of operating profiles comparing the ”paper nationwide” companies with the regional providers evidences a number of distinctions that truly favors the regionals.

Our industry’s experience with consolidation is a classic one, in that those that sell out get out. While the professionals who respect the efficiencies of scale either joined forces or built a bigger footprint, but in most instances stayed in the game and continue to contribute to the higher standards imperative in our industry. Like smaller Ritz Crackers and Tuna cans, the post-acquisition big players burdened with debt service seemed to have lowered their bar by offering provocative pricing at the cost of investigative reliability.

The very nature of optimization suggests that buyers accept some of the responsibility for the current challenges. Cost cutting means using workers that are willing to accept lesser compensation or that may not be full-time or properly trained or certified. The guidelines applied to reporting, security and safety get compromised and the actual reports exhibit real and extraneous errors.

The client industries we serve have seen the bottom line and understand the tradeoffs. The products offered from all levels of the industry truly speak for themselves. Small players may be the least worthy of consideration in insurance investigations. Big players fill a need where almost any quality of investigation will do. The more professionally-driven regional investigators seem to be the best resource when investigative integrity is most important. The regional outfits combine the nimble, investigator-emphasized, client-focused structure of the small shops with the expanded resources and streamlined organization of the largest corporations, without losing the quality and results the client requires.