Effective Interviewing and Interrogation in the Insurance Claims Process: Adjuster addresses the effective interview process in handling insurance claims.
John Czuba: Welcome to “Best’s Insurance Law Podcast,” the broadcast about timely and important legal issues affecting the insurance industry. I’m John Czuba, Managing Editor of Best’s Insurance Professional Resources.
We’re pleased to have with us today James Barbieri, from independent adjusting and investigation company, Claims Advantage, Inc., in Georgia. Jim is the president and CEO of Claims Advantage. He’s a former police officer and has a BS degree in criminal justice.
Mr. Barbieri is a certified insurance fraud investigator adjuster and has been conducting SIU investigations for over 30 years. Jim, thank you very much for joining us again this morning.
John: Today’s discussion is the importance of effective interviewing and interrogation in the insurance claims process. For our first question today, Jim, what is the purpose of an interview versus an interrogation when handling a potentially fraudulent insurance claim?
Jim: John, the interview is basically an informal conversation, with the main purpose of gathering information. As I mentioned in other AM Best podcasts, it’s imperative that the investigator prepare for the interview and conduct an extensive background investigation of the subject. You need to do your homework before any interview is conducted.
During the interview stage, you have to let the subject talk, and don’t interrupt. Let them get the story out, and ask general questions, like, “Tell me what happened in the accident.” Whatever, slip and fall, automobile accident. Obtaining information is the essential goal of any investigation.
Interviews are the most important stage of an investigation, because it is when you establish a rapport with the subject and gather information about the claim. For example, if I’m taking your statement, John. Small talk, I say, “Hey, John, I like your tie. Where did you get it?”
If you’re from, say, Princeton, New Jersey, as an example, I talk about the beautiful farmlands in that area. Do you really think I care about John’s tie or the beautiful farmland in Princeton, New Jersey? No. I’m just trying to establish some common interests with the interviewee, which helps them to relax and establish a feeling of trust.
The interview is generally non-confrontational. As you establish a rapport with the subject, he or she will likely be more cooperative in providing information that is essential in the investigation of the case.
You all heard the expression that you get more with sugar and water than with vinegar and baking soda. If you approach the interviewee aggressively and evade his or her personal space, the subject will become closed off and defensive, and it will be very difficult to gather the pertinent information.
Once the interview is completed, and you uncover inconsistencies, then the investigator can transition into an interrogation if the investigator suspects that the interviewee perpetrated a fraud. The main purpose of an interrogation is to get a confession.
While maintaining a professional demeanor, the interrogation becomes more confrontational and direct questions are asked. In past interviews and interrogations that I have conducted on fraudulent insurance claims, I have always focused on the minute details of the incident.
For example in a staged collision, the fraud participants will rehearse the most basic details of the collision. The investigator needs to ask detailed questions about seating positions in the vehicle. In several cases, the alleged passengers gave different stories of where people were sitting in the vehicle. John may say, “I was sitting in the right front passenger seat,” while Frank said that John was sitting in the left rear seat.
Also, the investigators should ask questions about the accident scene, as many of the jump in passengers, which as you know from previous podcasts, a jump in is a person that was not in the vehicle. They were never on the scene, and they’ll give different descriptions of the area.
I always ask, “Was the vehicle moved to the side of the road after the accident? Did they stand in the street while they were exchanging information, or were they standing behind a certain vehicle?” 9 times out of 10, they will provide different answers.
John: Jim, what type of preparation goes into an initial interview?
Jim: John, as I previously said, the investigator needs to do his or her homework and get background material on the interviewee. Knowledge of the subject’s past claims or criminal history can be used to assess his or her credibility during the interview.
Once your homework is done, then you need to choose a place to conduct the interview that is convenient. Could be a quiet coffee shop, a local Dunkin’ Donuts, a Starbucks near the subject’s home that is not threatening to the interviewee.
Again, your goal is to make the individual as comfortable as possible so that the subject will talk freely without interruption. The investigator needs to be receptive and not take any notes initially. During the interview phase, listen intently to show that you are interested in what the subject has to say.
I violated one of these rules a couple weeks ago. I was taking a statement on an auto theft claim from the insured. I was asking too many rapid fired questions, and the insured says, “Hey, let me answer the question.” It’s important to let them talk freely.
The investigator needs to be friendly. Do not cross your arms, which suggests that you are guarded or uninterested in what he or she has to say. The investigator needs to show the interviewee what he has to say is very important to get the pertinent information to reach a conclusion to the case.
John: Jim, at what point do you move into the interrogation?
Jim: After you let the interviewee finish telling the story and you lock them into a story, then the investigator can transition into direct questions. Direct questions are necessary to focus on the inconsistencies or to clarify the information that the subject provided.
The interrogation should be conducted like an interview, as the subject should be allowed to speak freely. Direct questions, we use to clarify inconsistent statements. However, during the interrogation, the interviewer is more aggressive and intense. That’s the difference between an interview and an interrogation.
Interview is more friendly. It’s more conversational, whereas an interrogation is more intense and aggressive. The investigator may ask the same question several different ways to see if the subject provides different answers.
Again, the investigator is more adversarial and he or she may bluff the subject to elicit a confession. In a previous podcast, I mentioned the case in Massachusetts, where I obtained a confession from our insured at a district court.
The insured was involved in a staged collision with a major fraud ringleader, and the insured was at the district court for a hearing regarding a stolen vehicle. I went to the district court and I was able to secure a conference room in the probation department.
During the interrogation, I placed several mugshots on the table. One of them was the fraud ringleader. As he’s looking at the mugshot you can see he’s getting nervous. I was reading his body language there. I told the insured that the police had the ringleader in custody, which they did, and he’s starting to sing, which means talk.
He is basically saying that the interviewee set up the accident. I told him I’m not trying to jam him up, that I know that the ringleader is lying, and it’ll be in his best interest to tell me exactly what happened in this staged accident. He eventually became nervous and he confessed.
Some investigators may use other techniques as getting physically close to the subject or making them uncomfortable during an interrogation. I even heard of some situations where you do an interrogation, where they turn up the heat if it’s a warm day.
It’s important to do the interrogation in a quiet area, like a conference room or an office as compared to a donut shop in an interview. Some investigators may change the tone of their voice when asking hard hitting questions.
John: Jim, what’s the best method to record a confession?
Jim: The best method, John, is obviously to use a digital recorder. As a supplement, I always wear a body camera, because it protects the investigator, where he can prove the confession is made voluntarily and of their own free will.
Of course, the investigator needs to know the state laws regarding obtaining a video as to whether the state is a one party consent, where only one party, who is the investigator, needs to consent. Or, if it’s a two party consent, where both parties need to consent to the recording.
Of course, when we use a digital recorder in a statement, we always ask permission to record the interview. I like the fact that video shows the body movements or facial expressions that can be an indication of deception. Videotape statements are more difficult to challenge as compared to signed or audio recorded statements.
The main reason why I wear a body camera always is to protect myself against allegations of coercion to provide a confession. Also, there are times when it’s necessary to pause the audio recording. If somebody needs to use the bathroom or some unexpected event occurs, but the video continues to run. If the claimant, insured, or witness makes a false allegation while the recorder is off, we have the video as protection against such allegations.
John: Jim, one final question today. How do you know when the interviewee is not being truthful or they’re being deceptive?
Jim: Again, you have to read the body language. I just did a statement on an auto theft in the Atlanta area. When I started asking the tough questions, the insured, when he would answer, he wouldn’t look at me. He would look away. He was squirming in his seat when I asked certain questions. These are signs of deception.
There’s other behaviors like nervous laughter when you ask a question that isn’t funny, and then all of a sudden, they start laughing. There’s nervous tics. Again, as I mentioned about when I’m doing a statement, I don’t cross my arms, which shows that you’re being closed off.
That’s also an indicator of deception when the interviewee does that. Is the subject’s behavior appropriate for the situation? You know when you hit a nerve, so to speak, when an interviewee gets defensive. A lot of people ask when I take statements, “Why do you need that information?” Especially, when I’m asking a pertinent question.
I usually ask financial questions to see if the interviewee is experiencing any financial problems, which would be a motive to stage an insurance claim. Usually, when they get defensive, that means they’re hiding something. They also tend to turn questions into questions.
Again, getting back to that auto theft case in Atlanta, when I got the claim, the police got a hit on the Flock. I don’t know if you would know what that means. It’s F L O C K. It’s a camera system that law enforcement has access to, and it’s a license plate reader.
When a vehicle goes by, the Flock camera takes a picture of the license plate, and then it searches the plate to see if it’s stolen or if it’s wanted for a kidnapping, murder, all hosts of crimes. In this particular case, two Flock cameras got a hit on the stolen vehicle’s license plate after the theft. It was only a couple of hours later.
The Flock system also showed that this insured travels the same route every day, and this is significant, because this route is 25 minutes away from the insured’s house. When I asked him how to get to a specific address, the insured turned that question into a question and asked me, “What is the shortest distance between two points?”
He was basically dodging the question. Another tell-tale sign is rapid eye movement, fidgeting in the chair. If it’s a female or male, playing with their hair. Those are all signs of deception. You also look for speech patterns. One telltale sign that someone may not be telling the whole truth is irregular speech. That is why when I do the non-confrontational interview, I determine the person’s normal speech patterns, and how he speaks, and how he answers simple questions, like, “What vehicle do you drive daily? What is your name, your date of birth?”
When interviewee’s mannerisms in speech, tone, or patterns change when interrogated, they usually suggest deception. Other signs of deception would be when the interviewee provides a very basic description of the accident. “We got rear ended at the stop sign, and that’s about it.”
Again, as I mentioned previously, they rehearse the most basic details of the incident. On the flip side, you may get a claimant or an insured who may be trying to be convincing, or maybe they’re trying to convince their self about the story and provide too many details about an accident that normally would not be provided by an insured or claimant when you’re doing an interview.
I had one insured tell me that he left 37 feet of skid mark prior to rear ending the claimant. It’s like, “What, did you get out of your vehicle and go measure the skid marks?” Sometimes, they provide too much information.
John, finally, the takeaway in this podcast when you’re doing interviews is to first establish a rapport. That’s the most important thing, to get the interviewee to trust you. Then, as I said, let them talk freely without interruption during the interview to get as much information as possible. Then, if appropriate, transition into an interrogation if you suspect fraud, and focus on the inconsistencies.
John: Jim, thank you very much for joining us again this morning.
Jim: John, thank you for having me.
John: You’ve just listened to Jim Barbieri from independent adjusting and investigation company, Claims Advantage, Inc., in Georgia. Special thanks to today’s producer, Frank Vowinkel. Thank you all for joining us for “Best’s Insurance Law Podcast.”
To subscribe to this audio program, go to our web page, www.ambest.com/claimsresource. If you have any suggestions for a future topic regarding an insurance law case or issue, please email us at firstname.lastname@example.org.
James Barbieri from independent adjusting and investigation company Claims Advantage discusses the importance of conducting a thorough background check prior to obtaining a recorded statement.
Special thanks to our sponsor, AM Best Company, Best’s Insurance Professional Resources, including Qualified Member attorneys, adjusters and expert service providers.
AM Best Webinar-The Importance of Conducting Field Investigations in Commercial General Liability Claims
You're Invited to AM Best's Complimentary Webinar:
"The Importance of Field Investigations in Commercial General Liability Claims"
Wednesday, February 9, 2022, at 2:00 p.m. ET
Hosted by Best's Insurance Professional Resources
Legal and claims experts will review best practices for handling commercial general liability claims investigations, including the vital—but sometimes insufficient—onsite investigation work conducted by experienced and knowledgeable claims professionals. This complimentary AM Best Webinar is cohosted by Best's Insurance Professional Resources and is sponsored by Three Griffins, Inc.
Registrants from North America & Non-GDPR Jurisdictions - Register here
Registrants from GDPR Jurisdictions - Register here
Catching and detecting fraud has really transformed over the past three decades, especially now during the COVID-19 pandemic. In this week’s Fraud Leadership video, Andrew Vogeny sits down with James Barbieri, CIFI CEO of Claims Advantage, Inc. to discuss virtual interactions and the advantages and challenges that they may face when trying to detect fraudulent people.
Click here to launch video on LinkedIn.
Best Insurance Law Podcast
How the COVID-19 Crisis Creates an Environment for Fraudulent Insurance Claims
Intro: This is the Insurance Law Podcast, brought to you by Best’s Recommended Insurance Attorneys.
John Czuba: Welcome to Best’s Insurance Law Podcast, the broadcast about timely and important legal issues affecting the insurance industry.
I am John Czuba, Managing Editor of Best’s Insurance Professional Resources.
We’re pleased to have with us today, James Barbieri, from independent adjusting company, Claims Advantage in Georgia. James is the President and CEO of Claims Advantage. He’s a former Police Officer and has a BS degree in Criminal Justice.
Mr. Barbieri is a certified insurance fraud investigator, adjuster and has been conducting SIU investigations for over 30 years.
Jim, thank you so much for joining us today.
James Barbieri: Thanks for having me.
John Czuba: Today’s podcast discussion is “How the COVID-19 Crisis Creates an Environment for Fraudulent Insurance Claims”. Jim, for our first question, how can the COVID-19 pandemic impact insurance fraud?
James Barbieri: Insurance fraud is a significant problem in the United States, and by some estimates, about 10% of property and casualty claims are fraudulent, which represents a cost of approximately $120 billion across all lines of insurance, and with this pandemic, insurance fraud will most certainly increase.
With the COVID-19 pandemic, and now with the recent civil unrest, which we’ve been seeing lately, people are losing their businesses and livelihood. Their life savings are being rapidly depleted, which could cause some people and corporations to engage in insurance fraud scams, that could be a lifeline in a recession as we are seeing now.
More Americans may tolerate insurance fraud in these tough economic times, and this type of crime is generally considered low risk as compared to more high risk crimes such as drug dealing, burglary or armed robbery.
Insurance fraud is an economic crime that usually does not result in heavy jail sentences, especially now with higher risk prisoners being released from prisons due to the COVID-19 situation.
There are many district attorneys in several states who do not place insurance fraud high on their list of prosecutions. Therefore, the benefit of insurance fraud to get quick money for some struggling people will outweigh the risk of getting caught.
John Czuba: Jim, what are you seeing in terms of automobile related claims?
James Barbieri: John, we have seen these fraud schemes over the years, but some of the common fraud schemes that we are seeing more now are vehicle give ups and vehicle arson. As many Americans are working from home and not driving to work, they may not have a need for that second automobile and the monthly payments that go along with it.
The insured may simply get rid of their vehicles by driving them into a lake, a pond, a wooded area and then claim the vehicle was stolen to collect the insurance money and get out from under the loan. The obvious motivating factor is the poor economic conditions, job losses, and financial hardships as a result of this pandemic.
Insureds who are desperate for money may have the vehicle stolen and burned to ensure that the vehicle is a total loss. In some cases, they may also strip the vehicle and sell the parts to make extra money.
This type of fraud is also common with motorcycles or recreational vehicles where the insured can no longer justify the monthly payments. Even if the vehicle owner gets caught and fraud is detected, the lien holder is considered an innocent party and will still get paid by the insurance company. Of course, the insured will not get paid.
We’re also seeing an increase in staged automobile accidents. Organized groups of fraud rings who need fast cash create an accident scenario that involves phony injuries. Some dishonest personal injury attorneys, doctors, and body shops may have runners who recruit the fraud ring participants, and they usually claim soft tissue injuries.
Some of the time, these alleged passengers, commonly referred to as jump-ins, were not even in the vehicle at the time of the fraudulent accident. And of course, a jump in is a common term used in SIU. It refers to a person that was not in the vehicle, but they claim they were in the vehicle and they file a bodily injury claim.
The jump-in will then treat at a medical clinic and get expensive diagnostic tests and epidural injections. In some cases, these tests and medical procedures were not even performed. It is important for the investigator to do a clinic inspection to confirm that these claimants are getting the treatment and that they are signing in the log in sheet.
What we are seeing now are clinics performing these treatments even though they were shut down due to the COVID-19 pandemic. In many staged accidents, as we have seen over the years, immigrants are involved.
Especially now with the pandemic, undocumented immigrants are more likely to get involved in this fraud ring activity as they have no source of income due to the virus. They are not eligible to receive the government stimulus check if they’re undocumented immigrants.
In some staged accidents, innocent motorists are the victims. A fraudster may slam on the brakes in order to get rear-ended, and in that scenario, it is common to have jump in passengers claiming injuries.
Now, John, also along with staged collisions, we are seeing more body shop scams. Now that there are less vehicles on the road, there will be a decline in accidents. Many dishonest shops will work with the professional fraud rings by enhancing damages or causing more damages to render a vehicle a total loss.
I have investigated several fraud rings where the body shop would tow the damaged vehicle to a staged accident scene and another vehicle would arrive with fake passengers.
I recently handled a claim in Mattapan, Massachusetts involving a rental truck company where I obtained a confession from the renter of the truck. And what he told me was that the claimant had the damaged vehicle towed to a location in Mattapan, Massachusetts, the tow truck dropped down the damaged vehicle, they sprinkled all the debris on the ground, and then another vehicle arrived with five passengers, they got into the damaged vehicle and called the police.
Other body shop scams involve shops that will perform repairs using old parts in order to inflate the bill. This is commonly seen in airbag fraud where the shop will replace a deployed airbag with a bag full of paper, rags, cardboard, and other items, which poses a public safety risk.
In some cases, the shop will remove an undeployed airbag and replace it with a deployed unit, and then after the claim is paid, they will put back the original airbag.
John Czuba: Jim, what is the impact of COVID-19 on workers’ compensation claims?
James Barbieri: The COVID-19 pandemic creates a problem for insurance carriers and many employees that are working from home. And John, as you know, workers’ compensation claims, in order to be compensable, the injury must arise out of and in the course of the employee’s employment.
The challenge for carriers is to determine if the injuries sustained while working at home is legitimate. Most of these at home, alleged, work related claims will be unwitnessed. And unlike factories, and as you see in commercial businesses, there are security cameras. In this case, there will not be any security camera footage to corroborate the injured worker’s story.
John Czuba: Jim, are there any other areas that claims managers need to be concerned about?
James Barbieri: We are seeing more business interruption claims. Struggling businesses who are shut down due to the pandemic and cannot afford to pay the mortgage may burn the building to collect money, not only for the structural damage but also for business interruption.
An example would be a restaurant that is forced to close because of the virus and they lose meat and produce as well as other product.
Normally, they would not be covered under a business interruption policy if there’s a virus exclusion. And also, the policy requires that you show physical damage, and now the loss of product will be the result of arson.
John Czuba: Jim, what are some of the investigative challenges out there?
James Barbieri: Most potential fraud claim investigations require in-person interviews. We are finding that fraud participants are using the pandemic as an excuse not to meet with the investigator in person.
This situation hinders a detailed investigation where the investigator needs to inspect the insured’s residence or to confirm the identification of the insured by viewing his or her driver’s license.
These investigators will be forced to conduct telephone recorded statements where one cannot read the body language of the interviewee to determine possible deception.
An alternative solution, which I have been using lately, is to conduct a virtual interview using a platform such as Zoom or Google Meets.
However, the insured or claimant may allege that they do not have a computer or webcam.
In some instances, they will claim not to have a cell phone to do the interview, or they will have a cheap phone such as a burner that does not have a camera. In that case, it is extremely difficult to go over scene photographs, maps, and other documents on the phone and impossible to have the insureds mark or sign relevant documents.
The challenge for the investigator is obviously to verify any submitted documents. The investigator will have to adapt to this post COVID world. I had an automobile theft claim in March, here in Georgia, where there were several red flags or fraud indicators in the claim and an in-person statement was needed.
I instructed the insured to set up a folding table in the backyard, with two chairs spaced apart, and we both wore face masks during the interview. John, this is a different world, post COVID, where claims adjusters, attorneys, and investigators need to adapt when conducting a claims investigation.
John Czuba: Jim, what are your final thoughts for our audience?
James Barbieri: I did not mention that we are seeing more homeowners claims for mysterious jewelry losses, and that’s a way to get quick cash at low risk. There is no need to engage in risky behavior to stage a phony loss because simple carelessness can be the basis of a mysterious disappearance claim.
One other thing I want to point out, John, is that you are seeing opportunistic fraud, people that are ordinarily good American citizens, honest people that wouldn’t commit fraud, but they’re in dire straits.
These people are unlikely to have a substantial or relevant claims history in ISO and are more likely to be long standing customers of a carrier. A typical claims history or policy history red flags are seldom found.
Just one other thing I want to touch on is the telephone recorded statement or the virtual recorded statement using the computer. It is impossible to counter possible coaching of insureds who communicate virtually.
Somebody could be in the background while you are doing the statement and you cannot see them and they’re coaching the insured or the claimant. On that same thought, it is also impossible to conduct separate interviews or EUOs for the attorneys involved of the insureds when the policy provides that they must give statements separately.
An example would be a married couple with a homeowners claim, as most homeowner policies require that insureds give separate statements or EUOs. One final thought. Ironically, the strategic advantage of claiming fear of COVID-19 only goes one way and it advantages only the insureds.
No insurance company could ever delay an investigation or refuse to appraise a vehicle, citing fear of an employee’s or investigator’s personal safety without the risk of sanction or a bad faith violation.
John Czuba: Jim, thank you so much for joining us today.
James Barbieri: Thank you, John.
John Czuba: That was James Barbieri, President, and CEO of Claims Advantage in Georgia. Special thanks to today’s Producer, Frank Vowinkel. Thank you all for joining us for Best’s Insurance Law Podcast. To subscribe to this audio program, go to our web page, www.ambest.com/claimsresource.
If you have any suggestions for a future topic regarding an insurance law case or issue, please email us at email@example.com.
I am John Czuba, and now this message.
Outro: Best’s Insurance Professional Resources features valuable insurance industry content, including searchable profiles of client-recommended insurance attorneys, adjusters and expert service providers, brought to you by AM Best, known worldwide as a respected source of insurance industry news and information. Visit ambest.com/claimsresource.
Mr. Barbieri is a Certified Insurance Fraud Investigator (CIFI) and Insurance Adjuster. He is member of the International Association of Special Investigation Units, a renowned insurance fraud association.