Insurers warned over underhand Facebook ‘snooping’
The Financial Conduct Authority (FCA) has warned insurers against trawling prospective customers’ Facebook and LinkedIn profiles amidst concern that firms are gathering information sourced from the internet to raise people’s premiums.
This follows completion of an FCA study into how insurance companies make use of data gathered from alternative sources; such as supermarket loyalty schemes to investigate people’s diets and lifestyle and ‘smart home’ devices which indicate how often someone is away from their property, potentially leading to the introduction of tougher rules later this year.
Insurers are increasingly turning to social media as a means to investigate fraudulent claims, most recently unmasking a former Miss England contestant who falsely claimed whiplash injuries despite being pictured riding a mechanical rodeo bull weeks after her accident.
Such measures have raised privacy concerns however in addition to fears that the significant cost incurred in building such data gathering operations may deter new insurance businesses from entering the market.
The Association of British Insurers has dismissed such concerns however, insisting that it handles data ‘sensitively and securely’ whilst enthusiastically embraced ‘Big Data’ approaches as a tool for improving its business.