“Internet of Things” reveals new sources for detecting fraud

A court in Ohio this week gave the OK for prosecutors to use data from a fraud suspect’s pacemaker as evidence in his upcoming arson trial.

This is an interesting case, likely a first of its kind. Investigators obtained a subpoena to compel Ross Compton to sit so they could download the data from the device that keeps his heart beating. The data allegedly conflicts with Compton’s statements to investigators on how he escaped a fire in his home. He’s accused of burning down his home for insurance money.

Coalition members at the recent midyear meeting were briefed on this case by the prosecutor who brought the charges. He correctly predicted the court would allow the data to be used at trial.

This case is a reminder that fraud evidence increasingly will come from highly unusual sources as the “Internet of Things” picks up steam.

During another presentation at the June meeting, attendees heard about a case in Arkansas where investigators obtained audio recordings from an Amazon “Echo” device. Amazon fought the search warrant to turn over the evidence, but a court again sided with law enforcement.

These two cases  remind us that fraud investigators should creatively think beyond the typical sources to detect and investigate insurance crimes.

At the same time, fraud fighters need to follow legal and ethical lines to protect privacy and public trust. Consumer and privacy groups are rightfully concerned about how “Big Data” is used by government and business.

As expectations of privacy continue to fall, the landscape will be filled with court challenges and even attempts to legislate restrictions. Balance between proper use of data and privacy will be key.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.