Fraud investigators determine whether a deceptive act has been committed for financial gain. The specialized nature of this work allows investigators to focus on one particular area, such as insurance fraud, accounting fraud or bank fraud. Most investigators work in insurance fraud because of the sheer number of cases that come up every year. Regardless of their specialty, fraud investigators typically focus on analyzing data and interviewing witnesses to determine if evidence exists for pursuing a criminal case. They might work for insurance companies, government agencies, law enforcement agencies or in private practice.
A high school diploma is the minimum requirement for entering this field. However, employers often favor candidates with a bachelor's degree, vocational training or related work experience, according to the U.S. Bureau of Labor Statistics. The BLS also says that most insurance companies prefer to hire people trained as law enforcement officers, private investigators, claims adjusters or examiners because these workers have good interviewing and interrogation skills. Examiners handling workman's compensation claims, for example, would be expected to have a legal background. Strong communication and verbal skills are also important, especially for interviewing or interrogating suspects.
The BLS reports that insurance investigators handle claims in which the company suspects fraudulent or criminal activity such as arson, staged accidents or unnecessary medical treatments. The severity of insurance fraud cases varies. In some cases, a single claimant might overstate vehicle damage. In others, a large group of people might be involved in complicated fraud rings. Investigators use a number of techniques, including surveillance work. In the case of a fraudulent workers’ compensation claim, for example, an investigator might covertly watch the claimant to see if she takes part in activities that would be ruled out by injuries stated in the claim. If fraudulent activity is suspected, an investigator might need to obtain additional information from doctors or lawyers, or confer with legal counsel.
Investigators must be proficient at recognizing and interpreting unusual patterns of activity. Examples include large numbers of suspect medical billings or prescription drug requests, says Gary Auer, an Anthem Blue Cross investigator interviewed on the Vegas Inc. website. Many investigations start with a computer analysis, informants' tips, or as a follow-up to a written report. Depending on the situation, Auer will assign an investigator to the case or refer it for further action by local law enforcement.
To determine if fraud has occurred, an investigator must often interview witnesses and judge their credibility. For example, an investigator may look more keenly at a witness who answers in vague, noncommittal terms, or describes past events as if they're happening in the present, according to "Fraud" magazine. For this reason, employers might lean toward hiring former police officers and private investigators, who already have the interrogation and interviewing skills the job requires.