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Like Venmo and CashApp creates the risk of award inflation through combining non-work and work payments into a larger benefit award

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By Marci De Vries

Apps like Venmo or CashApp are now mainstream ways to easily move money between individuals and are often used as a way to quickly pay a gig-sized vendor. But these apps can cause confusion in a workers' comp claim scenario because the recipient of Venmo payments may not be very good at bookkeeping, blending together personal and business payments into a single stream of income used to inflate their WC award.

The best way to describe the risk is through an example. Let's talk about our injured worker "Todd" who works for a retail store and does auto mechanic work on the side. He uses cyber currency app Venmo as his payment method for all his mechanic work.  Venmo records transactions but does not necessarily tie payments to an invoice or tax id number. (see this helpful article about Venmo payments being considered "cash" transactions by the IRS)

Further complicating the matter, let’s assume last month was Todd's birthday, and his favorite aunt sent a $500 Venmo payment for his birthday, then his parents send an unrelated rent payment of $3000 in the same month, also using (you guessed it) Venmo. In this scenario, Todd has a Venmo account with a lot of transactions but no clear labels for the transactions, or ties to invoices for the transactions, because Todd does not have experience with business accounting and performs most of his work on a 'handshake contract'.

In an injury claim, Todd could submit gross revenue for his business of $4500/month based on the activity log on Venmo.  What should an adjuster accept as basis for your wage benefit calculation or, more importantly, how does his employer dispute any of it?  Return to work becomes even more problematic especially when the claimant has the agenda of staying off work to continue working on his rapidly growing, successful business.

These new apps and subsequent work activity are sometimes captured in social media when “Todd” begins promoting his mechanic work in order to secure additional customers. Social media is to advertising what cyber currency is to banking – an easy, low barrier to entry medium for securing new business.

A good social media surveillance report should be able to shed some light into these activities, and will also include posts about birthdays, celebrations, and fundraisers that workers may have participated in our launched. It’s one of the few tools that can crack into this digital-only space where business takes place only in the cloud.

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Marci is the CEO of Fraud Sniffr, Inc., a software company that locates, downloads & distributes social media content about WC/liability claimants to their adjusters. Her online technical and linguistic algorithm skills predate Google, which has allowed her to launch and sell two search technology companies prior to starting Fraud Sniffr. She was also an adjunct professor of Marketing & Social Media for six years at The Johns Hopkins University Whiting Engineering School. Fraud Sniffr has been one of the 50 fastest growing companies in Maryland for the past three years. 

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