For many years our firm represented insurance companies and their “Special Investigation Units” (called “SIU”s). Some states have mandated that insurance companies have SIU units, others do not. Some companies hire and employee their own SIU investigators, some depend on independent investigators to do this type work for them. And, of course, the type and quality of work varies greatly regardless of the type of SIU program that a company uses. This is no different than what you will find with any and every trade or profession.

The vast majority of the SIU professionals are well-meaning and (in my experience) conduct themselves in a professional and courteous manner at all times (even when faced with irate claimants or witnesses). Unfortunately, there are those who “cross the line”. When this happens, it often amounts to “bad faith” and can get an insurance company in serious trouble.

Eavesdropping (illegally intercepting telephone calls and other communications) is one example of “crossing the line” and “bad faith”. While not a common occurrence, I have had more than one experience with this unsavory tactic.

The first time that I heard about this was when a professional SIU examiner whose company was short on staff and used outside, private “investigators” was asked to interview some of these firms to see whether they should receive work. He asked my opinion about several of the “candidates”. One of them really stuck out because they candidly BOASTED that they would sit outside the homes of claimants and intercept their wireless telephone communications to determine where these people were going, what they were doing, etc. They then BOASTED that nobody would ever find out because their reports would say that any information they received from this illegal electronic eavesdropping would be attributed to unidentified “reliable sources”. This firm was NOT hired.

Another instance of this was when we accidentally discovered an insurance company’s internal notes, showing that one of its employed investigators had used a similar device (purchased at Radio Shack) to intercept calls of our client (a lawyer) while sitting in a car outside the client’s home. This SIU investigator never expected that his notes would have to be produced in discovery. The result was a BIG EMBARRASSMENT to his employer. Our client decided to accept a confidential settlement that was paid over two years, but this incident reinforced the point that activities of this type are (unfortunately) more common than we would all like to believe.

One recommendation to help thwart the possibility of this type activity is to purchase and use a digital spread spectrum telephone if you use a wireless phone at home. Another is to get a competent, bulldog attorney if your plans are described and attributed to a “confidential informant” in a report of the type we are discussing today. There are other measures that can be taken, but these would expand this into a very lengthy article. We would rather hear your thoughts (directly as most people do or in response to this blog). Good luck and may your calls remain private.