An insurance company is criticised for using a lie-detector test before paying claims, reports Faizel Cook
`IS today Monday?” “Yes” “Are you planning to lie to me during this test?””No”
“Did you submit a fraudulent claim to your insurance company?”
“No!”
And if you’re telling the truth, that should be the end of what is usually a very laborious and frustrating procedure – submitting a claim to your insurance company. If you pass the test, they pay your claim immediately. If you don’t, you kiss your claim goodbye. And if you fail you were lying anyway, according to the insurance company.
For this test, you have several gadgets attached to your body. It’s the Nineties version of the polygraph test, known as a lie-detector test. A Johannesburg insurance company, Multi Fund Insurance Brokers (MFI), has implemented a policy binding all its new clients to the outcome of such a test.
Clients sign a contract saying they will undergo the test on submitting a claim. Since implementing the policy last October, Multi Fund has saved R500 000. It has also paid R100 000 worth of claims that it normally would not have paid because the assessors recommended it should not.
MFI decided to go the polygraph route after realising it was losing too much money to fraudulent claims. According to Corrie van Heerden, managing director of MFI, 30% of claims submitted to short-term insurance companies are either fraudulent or loaded. “This is the fairest way to find out if a client is guilty of fraud. There’s no drawn-out legal problem; within two hours we can categorically state whether a client is lying or not.
“Most insurance companies will go the polygraph route because of the high rate of fraud. In Israel, all insurance claims have to undergo the polygraph test,” says Van Heerden, but Bruce Cameron, general manager of Mutual and Federal, does not agree. “I don’t think we’ll use the polygraph test; we’d much rather go through conventional methods like using an assessor.” He says it’s unlikely that the industry will follow MFI’s lead. The biggest problem is that using a polygraph is a breach of the trust between insurer and client, and is an invasion of privacy.
His views are shared by industry analyst Clive Cook. “It’s not something I’d recommend. It’s like resorting to desperation tactics because you can’t control your risks properly, and I don’t think the industry as a whole will go that route. There must be a chance that the machine can make a mistake, and what chance do you have against the company if the test is wrong and you’ve signed the contract?”
Leon Fleiser feels the machine made a mistake on his claim, and he now has no chance of being paid. Shot in the spine six years ago, he lost the use of his legs and has been confined to a wheelchair ever since.
He signed a contract with MFI in which he insured his two wheelchairs, one of which is specially designed for playing basketball. When his first wheelchair was stolen it was replaced by MFI. On another occasion he went out with some friends, and left a wheelchair in the car. The car was broken into and his wheelchair and a laptop computer were stolen. On submitting the claim MFI said it would pay out if he passed the test. He failed.
He underwent a second test which he also failed. He says he will now have to save for about a year to replace the wheelchair, which cost R12000. “If the test was 100% foolproof, it would be fantastic, but it’s not – which is why not everyone uses it.”
According to Hendrik van Rooyen from The Polygraph Institute, which conducts the tests, the success rate is upwards of 98%. “It’s based on people’s response to the fear of being detected. As soon as you ask the question the person is afraid of, the body releases adrenaline which speeds up your heart, your blood pumps faster, your breathing rate increases, and that’s what the machine picks up.”
While the machine is foolproof, a margin for error comes from the operator. If he asks the wrong questions, he could get the wrong result and make a wrong analysis. But, says Van Rooyen, the chance that the test results are wrong in both tests are very slim.
The practice of using a lie-detector test will not become an industry standard in South Africa. MFI has been heavily criticised for using it. It has been said the practice is unconstitutional. But, as MFI says, honest people have nothing to fear from the polygraph, it is only the crooks who have a problem with taking the test.
— Faizel Cook is a reporter for SABC TV