Investigators – independent or guns for hire Investigators – independent or guns for hire? IAATI Training Seminar 2016 19 April 2016 John Price, Lead Ombudsman Insurance, Financial Ombudsman Service Australia

Financial Ombudsman Service Australia Investigators, Loss Adjusters, Forensic Experts, are they truly independent especially if in-house, or are they guns for hire, tasked with achieving a desired outcome for their “boss”? This session examines the issue of independence through the eyes of the Decision Maker, what they look for in investigation reports – the good, the bad, the ugly.

Financial Ombudsman Service Australia FOS is not a court It’s an alternative not a substitute Inquisitorial not adversarial

Terms of Reference clause 8.2 What is fair in all the circumstances Legal principles Applicable industry codes Good industry practice Previous relevant decisions (not binding)

Fraud A matter of Intent The mental element required to establish fraud is an intention to deceive, that is an intention to create a false belief in the person deceived for the purpose of obtaining money or some other benefit Buchannan JA To v AAMI (2001) 3 VR 279

Fraud Our perceptions, our understanding is shaped by the position from which we start People are fundamentally honest The Power of the Paradigm “A model, theory, perception, a frame of reference” The way we see things....perception, understanding, interpreting

Fraud Mr Justice Young, ALJ 1997 Usual v Unusual Witness consistency Do not rely on observations of demeanour Observational evidence needs to be tested Do not be misled Cultural Characteristics Just because a person is shown to be a liar does not establish something is so (e.g. claim to be somewhere but proven not to be does not establish fraud)

Fraud - Evidence Character – history Credibility – inconsistencies Opportunity – timing Motive – financial, revenge, opportunistic, organised Experts

Questions we regularly have What happened to transcripts? Why no interviews with employee/employees? Where are the financials – especially if an account is involved? Where are the contemporaneous notes? What canvas occurred? Why no police report / statements? What CCTV / video footage is available? We don’t want your opinion – we want the facts

What we look at Statements – how, when, how long, interpreter? Record Statements Police, Fire Dept. records – address these – relevant to time, opportunity etc. Insurance & Criminal histories – are they accurate? Observations of demeanour – of little relevance Has consumer had a chance to clarify? – goes to co-operation Forensics – proper instruction – what instructions given? – address concerns Finance is important – Bank Records – should provide – fact that a person has limited income does not mean fraud Phone Records - provide Policy documents including PDS, Schedule, Certificate of Insurance – are there issues regarding misrepresentation/non-disclosure?

Contact details FOS Australia GPO Box 3 Melbourne VIC 3001 (Australia) www.fos.org.au Members contact: 1300 56 55 62 Consumers contact: 1800 367 287 (1800 FOS AUS) or 1300 78 08 08

Questions?