Following her son's death from diabetes, Violet* shifted his belongings to the back shed to help her move on. One night, a thief broke in and fled with $20,000 worth of items.
But the theft wasn't what exacerbated Violet's grief. It was the way she was treated by her insurance company's fraud investigator after she lodged a home contents claim.
The third-party investigator told her that he believed she stole the items and was a liar. He also asked a string of irrelevant questions, including about her plans for the weekend and the death of her son.
The most outrageous comment was: "No wonder you don't have a husband".
Violet's story is one of many that triggered the general insurance industry's independent monitor, the Code Governance Committee, to examine the industry's use of external investigators to detect and avoid paying out fraudulent claims.
While there is a need to stamp out fraud, which insurers say costs them $2 billion a year and lifts premiums for honest policyholders, consumer advocates say the lack of rules for investigators has seen them bully, threaten and intimidate claimants.
In a new report, the committee said when insurers outsourced claims-related functions to "service suppliers" such as investigators, compliance with the Code of Practice was "unpredictable" and the degree of oversight they exercised in some cases was "inadequate".
"As well, there is not enough guidance provided to external Investigators when interviewing consumers," said committee chair Lynelle Briggs.
"We also found that some respondents have authorised [investigators] to handle complaints when [insurance companies] are required to perform this function [and] some respondents' contracts with [investigators] do not align with the code's requirements."
It has made 30 recommendations, including that interview questions be "relevant, fair and transparent", that interviews not exceed two hours, that investigators assess whether claimants have special needs and provide additional support such as an interpreter, and that guidelines be established for interviewing minors, such as setting an age limit.
It said the industry should develop a set of best practice standards.
Last year, consumer advocacy group Financial Rights Legal Centre (FRLC) raised alarm that some investigators were "intimidating, threatening and bullying" claimants, some of whom have mental health issues and poor English skills, and made them "feel like criminals".
In a report, FRLC said a lack of standards had led to investigators using unscrupulous methods to extract information - for example, conducting five hour interviews, demanding to be "friended" on Facebook and urging claimants to sign a blank authority form.
Fairfax Media reported on a case where a claimant was asked irrelevant and invasive questions, including about a rape earlier in the year that led to dealings with the police and to giving birth to the child of her attacker.
At the time, the industry's peak body Insurance Council of Australia (ICA) responded by saying the 40 anecdotes didn't amount to evidence of a systemic problem with insurance investigations.
Drew MacRae from FRLC said the committee's recommendations vindicated its work and that there was indeed a systemic problem.
"We believe the recommendations should be implemented straight away because we think the industry has been on notice for enough time," he said.
"One of the key recommendations is communication, because we found that most people had no clue that they were being investigated, and if they did, they had very little information about what the process involved and their rights."
Campbell Fuller, an ICA spokesman, said the committee's inquiry was conducted with its support and that of its member companies.
"Its findings are timely and will form part of the current review of the General Insurance Code of Practice," he said.
"The ICA has recently discussed the use of claims investigators and outsourced service providers with consumer advocacy groups, and will consider how consumer protections could best be incorporated into the next iteration of the Code."
The ICA said 3.2 per cent of the one million motor and home claims lodged in NSW were investigated in 2014-15. Of these, 3250 claims were ultimately denied or withdrawn.