FRAUD DETECTION
Insurance fraud is a $90 trillion a year industry - larger than the net profits from organic farming, pornography, and ebusiness combined.
Don't believe it. It's an exaggeration, the kind insurance companies hate. The National Insurance Crime Bureau estimates that fraud - everything from make-believe contents of snatched purses to "stolen" vehicles - account for 10 percent of American insurance claims. That's $30 billion a year. Honest.
But how to separate the bad apples from the veritable bunch? Risk Technologies suggests its Advanced Digital Voice Analysis software. It's a real-time, PC-based lie detector, and by spring some of Britain's largest insurers will be using it. The app is surprisingly simple: Say you call in a claim about a stolen car. After a 15-second chat, the insurance representative asks you to tell the tale about the missing '87 Tercel. As you speak, your voice stress is digitally dissected along nine psychological variables and displayed graphically, like an equalizer. As you wax on about how the Tercel's trunk was loaded with gold bullion and Gucci shoes, words like "unsure" and "false statement" flash across the rep's screen.
Investigators flag each detail that elicits a spike from the ADVA. "In this case," explains Albert de Vries of Risk Technologies, "they might want to see some Gucci receipts."
The question now is whether ADVA will cross the pond. Thomas Short, president of the International Association of Special Investigation Units (the FBI of the insurance industry), says it's unlikely. His enthusiasm for new insurance investigation technology is tempered by 25 years of experience. "Americans have perceived mass lie-detector screening as akin to being treated like a criminal," he says. "But things have changed since September 11."
Nowhere is this more true than in US airports, where preflight interviews are the first line of defense. De Vries says he's negotiating with the FAA to incorporate ADVA into the Q&As. In his proposal, anyone who flunks the ADVA interview would be red-flagged on the passenger manifest for baggage searches or the hairy eyeball from onboard marshals.
It's tough to say whether subjecting customers to voice-based stress profiling would be effective, much less legal in the US. And since the country's airline and insurance industries won't comment on the concept, even ADVA's foothold on American soil is impossible to confirm. Just like that missing Tercel.
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