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(The following article is reprinted from FRAUD FOCUS, the publication of the Coalition Against Insurance Fraud)
A privacy bill introduced by Senator Dianne Feinstein (DCA) and its companion bill in the House of Representatives would pose a threat to insurance fraud investigations, experts say.
The bill, S.600 (cosponsored by Senator Charles Grassley of Iowa), would prohibit insurers and others from accessing credit header information in credit bureau reports, or any other commercial acquisitions or distribution. It also would prohibit the use of Social Security numbers as personal identification numbers without the permission of the individual.
“My staff retrieved [my Social Security number] in less than three minutes [from the Internet],” Feinstein said when she introduced the Personal Information Privacy Act of 1997.
“[While] some of the larger and more visible companies have now discontinued the practice of displaying Social Security numbers directly on the computer screens of Internet users,” she continued, “other enterprises have failed to modify their practices.
“One problem thwarting efforts to protect our citizens’ privacy is that there are thousands of information providers on the Internet and elsewhere in the electronic arena it’s impossible to get a comprehensive picture of who is doing what, and where. But one fact is clear: Distributing social security numbers on the Internet is only the tip of the iceberg.”
While the bill’s supporters cite the need for privacy to prevent crimes such as identity theft, or to deny personal information to potential stalkers, opponents say the bill could cripple antifraud efforts.
“There should be some type of exemption for the insurance industry,” said Paul Conway, product manager in Fireman’s Fund’s special investigation unit (SIU), “especially for the fraud investigation community. Every claim we get is checked for Social Security information.”
“Social Security records are confidential,” explained Jay Williams, SIU vice president with CNA. Williams said they depend on credit headers, which are not the confidential credit records that investigators cannot access, as a reliable source of Social Security information. “At least it tells you it’s the [number] the claimant’s using on his credit record. [If not], it’s an indicator, and only an indicator, but it’s a very helpful one. If they’re using a fictitious identity,” Williams added, “you normally don’t find credit headers.”
Typical scam artists will alter their real number by one or two digits, which can also be uncovered by checking credit header information. In addition, Conway said, headers contain addresses, past residences, spouses’ names, middle initials, alternate spellings, maiden names and other information helpful to investigators trying to verify a claim.
“It would be a tremendous loss for us if we no longer had access to this information,” Conway said.
The American Insurance Association opposes the bill, according to Janet Bachman, vice president for claims and a coalition co chair.
“We believe its enactment would cripple insurer antifraud efforts with no consumer benefit in return,” she said. “To the best of our knowledge, there is no evidence of property/casualty insurers using credit header information inappropriately, though we can understand the sensitivity of the information and the potential abuse if the information were accessed by people without a legitimate reason, or if it were not kept in confidence.”
As one might expect on an issue that’s Internet related, some of the debate is being carried out in cyberspace, and a Web site, www.visi.com/juan/congress/ has been set up to facilitate opposition to the bill.
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