Employers’ Guide to Workers’ Comp Subrosa or The Seven Sins Of Surveillance

There could be several reasons why it takes too long to get the case worked. The agency could be short staffed, they may have more work than they can handle because they do a good job, or they may have an aggressive marketing team that’s bringing in more work than they can handle. 

A phone call to the owner or manager should be able to resolve this. If not, find another agency. If it’s a one man agency he’s probably doing a good job and is starting to get more work than he can handle on his own and is getting behind in his assignments. If they can’t/won’t hire an employee(s) they should be honest enough with their client to tell them.

Another issue that I’ve seen over the last few years is PI firms that want an ‘exclusive contract’. I’m sure that you know who pays for this, literally and figuratively.  I don’t understand why if the work a contract firm provides isn’t up to the customer’s needs and/or expectations, why wouldn’t they be able to seek a firm whose work product meets the company’s requirements. I know of several TPA’s that got into that position, even their managers were unable to use other outside vendors.

We’ve had employers come to us and ask us to perform investigations and send the results to the adjuster. We’d just as soon work with everyone involved but sometimes, for whatever reason, that isn’t possible. That may be why more employers are inquiring about the Employers Bill of Rights.

There are numerous TPA’s that have in-house investigation departments. They usually hire an ex-law enforcement officer who has a PI license and he rents it out to them to supplement his retirement and they can legally offer investigations in that state. I attended one conference in 2002 and over the course of three days spoke with the manager of one such ‘agency’ for a TPA. He mentioned numerous times that he would rather be working auto theft cases, that was his ‘first love’. I mentioned that we had asked to be removed from an insurance company’s panel of investigators’ because they had gone to a flat rate of $50 per hour and we didn’t feel we could continue to give them the kind of service we had been, and still be able to pay our overhead, train investigators, offer competitive wages and benefits at that amount. We could have done it if we used trainees at or just above the minimum wage, but we won’t do that. He stated that his company had also asked to be taken off of the same insurance company’s panel, and they themselves had approximately 450 PI firms across the nation on their panel. Over the course of the three days I learned that their TPA charged their clients $68 per hour and paid the PI agency $50 per hour, that’s why they’d asked to be taken off of the panel. So, they made $18 per hour on every hour billed just to refer the file out to the agency that would actually be doing the work. And if the employer complains about the shoddy work, they just refer it out to a different agency on their panel, and still keep making their $18 per hour.

It takes too long to get the report. Same reasons as above, no excuses! It’s a lack of management skills. Back in the ‘70's when I was starting out we’d work 12-14 hours per day, and then have to go in and TYPE our reports. We were on salary and didn’t get overtime. I swore I’d never make my employees do that, and to this day I don’t. If I can read their handwriting, they can write their report while in the field and fax it or type it and email, that’s fine. As long as, it’s done the same day. We can post them on our website for our clients, email them or put it in the regular mail, the same or next day. If you’re not getting your reports in a timely manner, talk to the agency, preferably the owner, not some ‘manager’ ‘case manager’ or ‘supervisor’ and tell them what you expect. Deal with the person that has the authority to make a decision and enforce it. Most of my clients and the attorneys I work with have my home phone number and cell phone number, and I have theirs. And I use them. You should have a good working relationship with your investigator. Try and have lunch with them so you can put a face with a name and tell them how you would like your files to be handled. Of course, you shouldn’t have to bring it up, they should ask.

Let’s start with burned cases. If an investigator tells you that they never lose people on surveillance or never get burned, they’re either a liar or have never worked out in the field. If you don’t like aggressive investigations you probably won’t see many burned cases. If your investigator is burning more than one case a month or so, it’s time to take a closer look. 

One common mistake made by beginners and those that transition in from a peripheral field is to sit too close to the claimant’s residence. I remember many years ago going out to check on a new hire. I got to the assignment thirty minutes before the scheduled start time and positioned myself to be able to see him when he arrived in the neighborhood. Twenty minutes later he arrived and he parked about three houses down from the claimant’s residence. I went and got him and had him follow me out of the neighborhood.   During the initial interview he had told me that he had extensive surveillance experience. When I asked him why he was sitting so close he replied “this is the way we used to do it on the PD.” Needless to say he didn’t last long.

The days of just going out and starting a surveillance ‘cold’ are long gone. Years ago we could do that, not anymore. There has been way too much media attention on the nightly news, attorneys are telling their clients to watch out for surveillance and what time it’s usually conducted, even unions are telling their employees how it’s done. We see a lot more claimant’s using a Post Office Box or their parent’s address as a mail drop. Several times a year we’ll go into a neighborhood and place a claimant under surveillance and find the neighbors extremely suspicious. In the last year, on three of these cases further pre-text investigations revealed that there had been surveillance in the neighborhood recently that had made all of the neighbors suspicious.  On two other occasions, the claimant we were working had been worked and burned by other agencies and the adjuster hadn’t told us when they assigned the file.

Rural surveillance are a breed of their own and take careful pre-planning. One mistake I see when I review other investigative reports is using one investigator when two should be used. Sometimes, the agency may not want to approach a new client and suggest using two investigators due to the extra expense. I’m guilty of this myself on occasion, trying to save the client money and the case gets burned or isn’t as productive as it might have been.

I’ve never been a proponent of two or three man surveillance, but over the last ten years or so I have seen the need for it increase dramatically. This increases the odds of obtaining film, but also doubles the cost of the investigation.

If you see reports that state something to the effect of ‘the surveillance was discontinued to preserve the security of the case’, that means that they got ‘picked’. They should be honest enough with you to be able to tell you what transpired during the course of the investigation. You shouldn’t have to read between the lines. I called an adjuster back after reading the previous investigator’s report and told her that we would need to use two investigators on the case because it had been burned. She asked how I knew that. I pointed out that on page two of the investigative report the investigator noted that “the claimant used her mirrors extensively, was extremely aware of her surroundings and had on two occasions made U turns and driven back the way she had just come from. The surveillance was then terminated to preserve the security of the case”.  The adjuster had just read the first page that contained the film paragraph and noted that no film had been obtained.

Back when I started in the business we were advised not to use surveillance vehicles that were red, black, yellow or white, because they were too noticeable.  Muted colors like beige, silver or light blue were thought to be the best colors because they blend in and don’t stand out. This still holds true today, with perhaps white being the exception. There are numerous white vehicles on the road nowadays. In the past I wouldn’t consider hiring an investigator with a vehicle one of those colors, but depending on their experience I might now hire one with a white vehicle. 

I was at an investigator training seminar not long ago and was amazed at the number of black vehicles there, that are used for surveillance. (If you really want a chuckle read some of their personalized license plates, “ISPY4U” or some such silliness. Aside from being hot in sunny weather, what’s the first thing you think of when you’re watching TV or a movie and a black vehicle with tinted windows comes rolling down the street? I’m waiting for the window to roll down and guns to come out blazing. What do you think the neighbors do when they see a black vehicle with tinted windows parked on the street? Watch it, and probably call the police department. Claimant’s and their neighbors watch the same movies and TV shows.

I had an investigator that did a really good job on surveillance and was driving a silver Camry. After a year or so with me he started getting ‘picked’ once or twice a month. I started checking up on him while I was out in the field and came to find out that he was letting his wife use the Camry to go to work sometimes and was using his black truck with tinted windows. As soon as he quit doing that he quit getting picked so often.

Aside from using the wrong vehicle for surveillance, poor or nor-productive assignments may be due to in-experienced personnel. Ask your investigator what kind of training he provides for his staff. Is it continuous? Even if it’s a small agency and they can’t afford to send all of their staff to seminars, they can send one person and he or she can do a presentation when they get back.

Lack of supervision is another problem area. Surveillance investigators usually work alone or in pairs. I know a lot of firms advertise that their investigators  ‘are college graduates’. They must mean their AOE-COE investigators. Let’s face it, surveillance is a blue collar job. Ten to twelve hours a day sitting in a car or squirreled away in the back of a van either baking or freezing, depending on the weather. How many college graduates aspire to that? None that I’ve met. That’s one reason why field surveillance personnel need continuous supervision. Another reason is that it’s too easy to say they were on site, when they weren’t. That’s why I still work in the field with my investigators, and have been known to show up at an assignment before they do, and to stop by during the day. A few years ago we started using GPS enabled chips in our two way radios. We can track the radio on a street map in almost real time (it updates every two minutes). It shows position within  three  yards, direction when moving, and their speed.

Lack of preparation prior to commencing a surveillance is another downfall of in-experienced or lazy investigators. A well performed Pre-Surveillance Check and/or an ICU Covert Camera Stationary Surveillance System used for a day or two before a surveillance can bring a wealth of information and save the client money and the investigator time. 

If you’re seeing a lot of reports with ‘no activity’ or ‘nothing to report’ did they even know if the claimant was home? When we receive an assignment we ask if it’s been worked before. If it has, we ask for a copy of the investigative report. I’m amazed at the number of times an ‘investigator’ will sit on a house for two or three days and not know if the claimant is home. I recall one report where they knew he wasn’t home and sat there anyway, waiting for him to come home. Our company policy is to confirm a claimant is home in the morning or discontinue. We don’t sit on empty houses unless specifically told to. That doesn’t happen very often.  

Two of the biggest wastes of a client’s money, in my opinion, is either a ‘four hour activity check’ or an ‘eight hour surveillance day’. 

The only reason that I can think of for an eight hour surveillance day is because the agency is not charging enough to pay their field investigator time and a half. Period. I’d never even heard of an eight hour surveillance day until after SIU departments became mandatory.

When we were developing our ICU system back in the ‘90's we reviewed thousands of hours of video. I was surprised at how many claimant’s came outside after 4:00pm and would look up and down the street, then play with their kids, mow their yards, take their trash out and do other chores. I would attribute this directly to plaintiff attorney’s that tell their clients that most investigators work from 6:00am to 2:00pm or 8:00am to 4:00pm. All of the TV shows like ‘Caught on Tape’ heighten awareness to the investigative process. And shows claimants’ what to look out for. 

The next time you go to a conference or trade show where investigators are exhibiting their companies, look on their booth and/or handout materials. See how many of them have their license number visible on their booth and/or their printed materials. How about their website, is it easy to find or do you have to hunt for it? This is on the State test to be a PI. If they forget about that, what else are they forgetting? The Business & Professions Code section is 7534 and reads;

7534. Every advertisement by a licensee soliciting or advertising business shall contain his or her business name, business address or telephone number, and license number as they appear in the records of the bureau. For the purposes of this section, "advertisement" shall include any business card, stationery, brochure, flyer, circular, newsletter, fax form, printed or published paid advertisement in any media form, or telephone book listing. Every advertisement by a licensee soliciting or advertising their business shall contain his or her business name, business address or telephone number, and license number, as they appear in the records of the bureau.

Four hour activity checks. Something else I never heard of prior to SIU regulations. Any competent agency should be able to find out enough pertinent information on a Pre-Surveillance Check (some companies do call them Activity Checks) to be able to determine if a surveillance would be productive. These usually take about an hour to an hour and a half, including drive time. That’s why they’re usually done on a flat rate of between $75 to $125, depending on if they include DMV and/or a SSN Header Trace. I’ve had Activity Checks assigned for anywhere from one to five full days, and was told if there was any activity then surveillance would be authorized. No matter what we’re doing, we have a camera with us. There have been numerous times when we’ve gone out to do an activity check and found the claimant active. We began filming and this immediately rolled over into a surveillance. Could you imagine going to court and telling the judge that you went out to check on someone, saw them in the driveway working out with weights, and didn’t have a camera with you? The only reason I can see for a four hour Activity Check is so they can tell the employer  “We tried, but didn’t get anything”.  They didn’t try too hard. Let’s say they do go out and work 8:00am to 12:00pm and get the claimant going grocery shopping. You know when they get to court the first thing the applicant attorney is going to tell the judge is that the claimant tried to do some ‘normal activity’ in the morning but had to stay in bed the rest of the day, or vice versa.   If it’s worth doing it’s worth doing right.

What type of equipment does your investigator use? Are they using analog or digital video? Do they carry a mini cam for inside stores? If a claimant goes camping, to the lake, hunting, out riding motorcycles, snow or water skiing do they have the equipment and/or an investigator with the expertise to work the case? You should know the experience level and equipment of the firm before you need it on a rush basis.

 Another indication of an amateur, in-experienced investigator. There is no excuse. If you have more than a few seconds of shaky film once he starts filming, you need to re-evaluate your vendor panel. If the film looks like it was shot through an aquarium they probably shot through the windshield. 

The more angle to the windshield the more distortion. If you can see spots on the windshield they were too lazy to carry a roll of paper towels and window cleaner, and use them. That would indicate laziness, lack of training or poor supervision and film review. Or all of those reasons.

If you’re watching film and a car goes by and the picture goes in and out of focus, they’re using a camera with auto focus. As the car comes into view the camera focuses on it, then when it leaves the viewfinder the camera refocuses where it’s aimed. That’s why they make cameras with manual focus AND auto focus. It’s up to the investigator to be experienced enough to know when to use which mode.

If you hear background noises such a car radio or the investigator talking on his radio or to himself urging the claimant to pick something heavy up, he didn’t turn the sound on his camera off. Another amateur mistake. On newer cameras you can turn the sound off manually. On older cameras you can go to Radio Shack and for about a dollar buy a plug to put into the microphone jack which turns off the internal microphone. Cheaper cameras don’t have a way to turn off the sound. If your investigator is using one of these cameras you need to give your investigator a raise or find one who buys professional equipment.

There are insurance companies and SIU’s who want their investigators to shoot a few seconds of video every fifteen to thirty minutes at the claimant’s residence to prove the investigator was there. It sounds to me like they should hire a firm that they can trust, that will supervise their own employees. I’ve never had to go to court with film like that. If I was a judge and the defense investigator had to shoot extra film to prove he was there, I don’t know if I’d believe anything that investigator had to say.

And speaking of film content, if you see film with addresses or the front of buildings or neighborhood houses in it, you’re dealing with amateurs. The only thing the judge wants to see is the right claimant (I’ll get to that next) and their level of activity. The judge doesn’t want to see film of the claimant carrying in one of ten bags of groceries, and then five minutes of the door to the house while the claimant answers the phone or uses the bathroom. When the claimant walks out of view, for whatever reason, the camera should be shut off and not turned back on until the claimant comes back into view. Seems like a simple context but some people just don’t get it. If yours doesn’t, find one that does.     

Some years ago I had a surveillance applicant bring some film that he’d shot to his job interview. After viewing the film, I was impressed. The film showed a young woman walking out her front door, bending over to pick up a cat and put it on the porch, opening the door of her van, getting in, looking over her shoulder to back out the driveway, and driving away. I commented that while it didn’t show a lot of activity for a neck injury, it did show no restrictions, he’d caught her coming out of the house and all of her activity up until she left. The film was steady, in focus and had the date and time on it. He thanked me for the compliment and said that he wished it had been the claimant. I asked what he meant. He said it was the claimant’s roommate. I asked him when he found that out. He said at the trial. The applicant and her attorney got quite a laugh out of the film. I asked why he hadn’t confirmed the claimant’s identity and he said that his boss was ex-law enforcement and didn’t want any contact made on claimants. I commented that I could think of four or five ways to determine who the claimant was without ever contacting her directly. He said he’d never been trained that way, they just shot whoever was at the residence. No, he didn’t get the job.

 Bottom line, there is no excuse for filming the wrong person.

Ok, here’s where I get into trouble. Let me preface this with if I was doing security or criminal defense investigations (I don’t, I’ve got the wrong mentality for that) I would hire an ex-cop. If I did complex traffic investigations I would hire an ex-CHP MAIT (Major Accident Investigation Team) for those assignments. If I was doing high dollar white collar crime, I would hire someone from the Federal level. It’s not that I don’t think ex-law enforcement can’t do surveillance, but it’s been my experience in the work comp arena that they don’t have a clue. Here’s why;

At almost every industry trade show or conference where we exhibit or attend to up-date our training we hear numerous horror stories of ‘investigations gone bad’.

Here’s an example of a conversation I’ll have three to five times a day, at least, each time I’m at a trade show.

Them: “I don’t have much luck with subrosa.”

Me: “Quit using ex-cops”. (This is not a slam on ex-cops. One of my best friends is a Sergeant, my sister worked narcotics doing “buy-busts”, my brother-in-law is a Lieutenant, my neighbor is a Federal Probation Officer and I have numerous friends in law enforcement. Most of whom agree with my philosophy on ex-cops doing work comp surveillance).

Them: “Why? You’d think they’d know what they’re doing.”

Me. “Most ex-cops’ only exposure to the work comp system was when they used it to get off of the force, a lot of them go for a medical retirement so half of their pension is tax free”. They then use the fact that they’re ex-law enforcement to get work. Most law enforcement surveillance is conducted, this is a direct quote that I’ve never forgotten, “using six people, three vehicles, an aircraft, and preferably twice that.” I’ve been doing surveillance for twenty six years and I’ve only seen that kind of budget two or three times. Most of the time it’s me in the air in my plane and one or two of my guys on the ground hoping that I’m paying attention.

The Sacramento Bee has run some interesting articles on just this subject lately, check out;

CHP Medical Pension Probe Pledged

CHP Boss Trying To Get a Disability Retirement

'Chief's Disease' Rife At CHP

As long as I’m shooting myself in the foot, they also just did one on Work Comp Judge’s;

Workers' Comp Judges Cash In

I’ve seen numerous investigators’ obtain their license because they were (or are) in law enforcement

or they were in journalism(“a wide range of investigative experience”) or another peripheral profession.    In one case I know of a store shoplift security guard who used those hours to obtain his PI license. (Which isn’t supposed to happen, those hours should have gone towards a PPO, Private Patrol Operators license.) I met him when he called and said that he’d work for me for ten dollars an hour if I’d teach him how to do something that he could use his license for.  I don’t think so.

When I run an ad at least half of the replies will be from someone in law enforcement. I’ll ask if they have any surveillance experience and they’ll say something like “I was a cop for 15 years”. I ask if they did any surveillance and usually get a reply something like; “All the time. We’d get a report of a burglar and go sit outside the liquor store in our squad car and wait for the burglar to come out”. I usually tell them that I’ve been doing PI work a long time and am getting tired of the 12-18 hour days and am thinking of retiring and taking an eight hour job with a police department. How much do they think my starting pay will be, and will I start as a Captain or Chief with all of my experience? Their usual reply is that I won’t get hired, I don’t have any experience in police work. My reply is that they expect me to hire them at their former pay level and they don’t have any experience in my line of work. I get hung up on fairly often.

Back in the early 1990's when the carriers were required to have an SIU division a lot of ex-law enforcement went into those positions. I think that was great. SIU departments basically provide the fraud training to adjusters and are the liaison with DOI and/or DA investigators, who are both sworn law enforcement. SIU personnel review the film and reports of the field investigators and fill out the paperwork for the DOI. I know many PI agencies that can and do fulfill this function, but I understand how the ex-law enforcement background could be helpful when dealing with current law enforcement. But only when you have a competent, professional, probative investigation to begin with. I was at an employer’s conference recently and the DA from the County was there. He showed three different clips of film to the audience and said that they had gotten three fraud convictions with the film. The film was shaky, out of focus in places and cut off different parts of the claimant’s body at different times. I remember commenting to the client that if any of my people shot film like that, after training, I would terminate them.

I tried to describe this to a friend that I fish with and came up with: “It takes one skill to know how to cook a fish, it takes an entirely different set of skills to know how to catch it.”

As an employer, I love the idea of using a sub-contractor. I don’t have to supply equipment, I don’t have to withhold (or match) taxes, I don’t have to pay work comp or other benefits, train them, and I don’t have to fire someone if they don’t work out, just quit using them. 

I’ve never had much luck using sub-contractors. I expect them to have at least three years of experience in surveillance (to obtain a PI license requires three years, which is 6,000 hours of experience. But there are exceptions such as for prior law enforcement or educational allowances). I expect them to have the right type and color of vehicle for the area, the right camera equipment, and E & O insurance.    

Unfortunately, just because they’re licensed doesn’t mean they have any experience doing surveillance. And, a sub-contractor is going to expect to charge the agency hiring them at least half of what the agency is charging. If the agency is paying a sub-contractor half of what they’re charging, if they have to go back out and re-work the case one time, for any reason, they broke even (assuming that the case wasn’t burned so bad as to lose the client). If they have to re-work the case more than one time they go into the hole, very quickly.   

Do you know if your vendor is using sub-contractors? If they are, does the sub-contractor have employees/contractors? I know of one firm that sub-contracts at $25 per hour, and has several employees (?). Sub-contractors have also been known to not be where they were supposed to be, when they were supposed to be there, and I heard of one case where the sub-contractor told the hiring agency after the first day of a two day case that he couldn’t work the next day because he’d gotten in a case of his own!

This isn’t meant to mean that there are no good sub-contractors out there. I had an investigator that I trained back in the 1980's that got his own license some years later. He prefers to sub-contract because he doesn’t want to deal with the overhead of an office, the burden of employees or having to go market his business. He’s a great investigator, stays busy all the time and is happy doing business the way he’s doing it. He turns down work if he can’t get to it in a timely manner. A lot of sub-contractors won’t turn it down, they’ll take the assignment and hope they can get to it, or sub it out!  

 Employees are expensive. First you have the cost of advertising, reviewing resumes, personal interviews, conducting backgrounds, checking references, drug testing, training and finally putting them out into the field. Then, there’s the expense of their equipment, continuing training, benefits, supervision, overtime, double time, days off and vacation. Do you see why an agency is going to have a hard time charging $50 per hour and keeping good employees.  What about two years down the road and the employee has left the company to find a decent wage and they can’t find the person who shot the film. That’ll be a fun day in court, when the case gets thrown out. One of the ‘nationwide providers’ advertises that they don’t use sub-contractors, most of their employees have their own PI license. Employees work under the owner’s PI license (there are two exceptions in California for insurance adjusters and employees of law firms). Why would someone who had put in the years of work and training to get their own license work as an employee for another company? Either that person doesn’t have the skill to run their own business and keep clients, or the ‘nationwide provider’ isn’t licensed in that state and needs someone with a license so they can market there. Some companies are better at marketing than they are at investigating.

Even though they’re a lot more expensive and time consuming I prefer employees over sub-contractors.  I know how they were trained, what equipment they’re using and how their training is progressing.

PI lists on the Internet started out as a way to keep updated on changing case law, keep in contact with one another and sub out work. I’m all for keeping updated, have a few knowledgeable people I like to communicate with and am very wary of the sub-contract issue for several reasons. There are some really educated and experienced people on the list serve specializing in various areas, such as computer forensics, data retrieval, TSCM (Technical Surveillance Counter Measures, or bug sweeping) and other esoteric specialties. Most, if not all, were trained by a military or governmental agency at great expense. If I had a client in need of that type of service I would refer them to a person or persons in that specialty. But due to the large difference in training and budget between law enforcement and the private sector, I have some concerns.

Every time I run an ad for a surveillance investigator I get one or two applicants that when I ask why they want to leave their current employer tell me that work is ‘slow’. I can understand that, work flow goes up and down. Then, I ask how much they’re making, and I hear between twenty and thirty dollars an hour. And they usually have between four months to one year of experience.

What I’ve seen happen is someone goes out and gets their license then gets a few cases in, for whatever reason, and decides to hire an employee. They lowball the investigative rate at $50 or so, and think that if they pay half of that to an employee they’re doing well. Then, the employee loses the claimant or burns the case, or can’t find the claimant. And the agency has to go out and re-work the assignment. If they re-work it once they break even, if they had to go out more than once they start going in the hole. Then the agency finds out the harsh reality of having to pay time and a half and double time, matching taxes, work comp, benefits, marketing and all of the rest of the fiscal realities of running a business. Pretty soon, when that investigator starts calling in for an assignment he’s told that ‘they don’t have any work, they’re ‘slow’. And they well may be, if the client got tired of non-productive work and moved on to another firm.

Then, you still have an investigator out there looking for work that was making twenty to twenty five dollars an hour at his last job, why shouldn’t he be paid that much, or more, at his next?

There are also those agencies that pay their employees as sub-contractors, not caring that it’s illegal and unethical. 

Think of that the next time an agency bids a low price. You may actually get, what you pay for!