Tackling the growing issue of fake insurance adverts

Many customers who experience road-traffic accidents are having their misery compounded by scammers.

Searching for their insurer online, while stressed and upset following a collision, means it can be all too easy for the customer to mistakenly click on an authentic-looking fake advertisement instead. 

Rogue companies using paid spoof advertising to boost traffic to their website and take advantage of people when they’re at their most vulnerable is a shameless tactic.

Mark Allen, the Association of British Insurers

Before they know it, they are in the clutches of a third-party – a claims or accident-management company, which has no connection with their insurer.

This practice is deplored by the insurance industry. Mark Allen, the Association of British Insurers' head of fraud and financial crime, says: “Rogue companies using paid spoof advertising to boost traffic to their website and take advantage of people when they’re at their most vulnerable is a shameless tactic.”

To tackle this scourge, in November last year, Aviva and the Insurance Fraud Bureau launched a joint campaign to make customers aware of what they could be letting themselves in for, should they fall into this trap and how to avoid it.

Duping tactics

Summing up how the firms seek to farm leads, Pete Ward, head of claims counter fraud at Aviva, says: “A small number of unscrupulous firms pay for search-engine adverts that insinuate that they are associated with a trusted insurer, so they can capture the claim for their own financial benefit.

“Lulled into a false sense of security, the customer enters into expensive agreements without realising what is going on.”

The scammers have plenty of tricks up their sleeves to lure in distracted and unsuspecting people. “These paid-for adverts link to slick, professional-looking websites that can appear to be what the customer is looking for,” says Katie Davies, director of underwriting services and fraud at Ageas UK.

She adds: “Some claims management companies have slick procedures in place, including processes and documentation, to show they told the customer either in the call or in a written statement, who they were and their intermediary role in the claims process. 

The impact is beyond economic and can have long-term implications for innocent policyholders caught up in such scams.

Ben Leech, partner, Keoghs

"Often, in the small print, they will confirm they are not an insurer, and outline that their claims management service is based on a no-win, no-fee agreement.”

Another method they use is to have an apparently credible name. 

“They often use ambiguous company names such as 'The Claims Department', so consumers are duped into thinking they are contacting their insurer,” explains Rick Preston, partner and head of intelligence services at solicitors HF.

Technological developments could also be key in attracting the unwary. 

Ben Leech, partner at solicitors Keoghs, says: “There is no doubt that the use of artificial intelligence makes the content of such adverts more appealing to the consumer.”

Reputational impact

Getting caught up in these scams can be devastating. 

“The impact is beyond economic and can have long-term implications for innocent policyholders caught up in such scams,” says Leech. 

“They face the prospect of court hearings and being placed under pressure to cooperate with rogue claims companies seeking to recover monies from insurers. In the event that these are not recovered, the rogue CMCs will seek to recover the sums from the innocent non-fault motorist, which brings more distress.”

It erodes trust in the insurance industry and undermines consumer confidence, with the potential for increasing the cost of insurance premiums.

Rick Preston, head of intelligence services, Horwich Farrelly

The sums involved can be considerable. 

At the launch of the Aviva/IFB campaign, the IFB revealed a rogue CMC had pursued someone for more than £50,000 in costs.

Preston also notes the damage done from these fake adverts is not just financial. 

He says: “The impact on consumers can be significant. It can lead to confusion, frustration and potential financial harm. They may inadvertently provide personal information to unauthorised entities, risking identity theft or fraud. Additionally, they may receive poor-quality service or be misled about their rights and entitlements.”

While these scams can be disastrous for the victim, insurers and other customers do not emerge unscathed from their effects either.

“Overall, it erodes trust in the insurance industry and undermines consumer confidence, with the potential for increasing the cost of insurance premiums,” says Preston. 

Ward takes a similar view, saying: “As well as the potential financial detriment, there’s the impact on the customer’s wellbeing – they can be left angry, upset, shocked or embarrassed that they have been misled.”

He adds: “Customers can lose faith in insurers when they are unable to intervene, to help them extricate themselves from these companies and the contractual obligations they unknowingly agreed to.”

Why it happens

Those affected may well wonder how this scamming can be allowed, but as Preston explains: “Unless there is a breach of copyright or advertising and claims-management regulations, there is nothing to prevent CMCs from engaging in this activity. 

“Experience shows that many of the companies carefully stay just within the rules, so however questionable it might be, taking meaningful action against them can be extremely difficult.”

Ward says: “The problem occurs when customers don’t understand who they are speaking to, what they are agreeing to or what that means for them. Unfortunately, this appears to happen all too often with these adverts, which are posted by a small percentage of unscrupulous AMCs and CMCs.

“We believe no customer should find themselves in a position where they don’t know who they are speaking to, how they came to speak to them and the potentially very serious financial implications of the agreements they are making. These are incredibly poor customer outcomes.”

Tackling the problem

Action has been taken by insurers and watchdogs to challenge the practice. As part of the UK government’s Online Safety Bill, which became law in October 2023, search engines and social media platforms are required to prevent paid-for fraudulent adverts. 

Ofcom, the new regulator for online safety, is tasked with implementation of the Act, which it is undertaking in phases.

The Financial Conduct Authority became the regulator for claims management companies in 2019 but has a limited remit over some of their activities. 

We are pleased to see stricter checks in place, and certain platforms no longer allowing advertisers to explicitly use other company’s names, but fraudsters quickly find loopholes.

Jon Radford, Insurance Fraud Bureau

A spokesperson says: “Accident management services carried out by CMCs are not regulated by the FCA but, where we see evidence of spoofing by regulated CMCs, we will take supervisory action.”

Ward says: “While Google now requires advertisers to confirm their identity before they can post adverts, the companies behind these adverts are often not authorised by the FCA.”

Jon Radford, head of intelligence, investigations and data services at IFB, describes the new law as a “big step in the right direction” but also points out that it has not solved the problem.

Radford says: “We are pleased to see stricter checks in place, and certain platforms no longer allowing advertisers to explicitly use other company’s names, but fraudsters quickly find loopholes. We see sites taken down, only to reappear a short while later with only the name changed.”

Ward also highlights some sticking points. “It is often difficult to identify the companies involved in this activity. Sometimes we see the use of shell companies registered with Google to advertise, delivering calls to a completely unrelated company, which is the controlling entity in reality.

“It is common where we do identify companies to find that they are dissolved within a year or two of incorporation and seemingly replaced with another linked business through a practice known as phoenixing. We have tracked 16 companies over the last seven years under the control of an individual engaged in this activity.”

Ben Fletcher, director of financial crime at Allianz personal lines, highlights the multiple challenges faced by those trying to tackle this practice given how quickly tactics evolve and the fact fake adverts are far from limited to only road-traffic accidents these days.

Fletcher says: “Recent deceptive tactics have extended beyond motor insurance to products such as home insurance. It is crucial to maintain a continued focus on this issue.”

Alerting the public

What is agreed is how crucial it is to increase public awareness of spoof adverts.

A video was produced as part of the Aviva/IFB campaign to alert the public to the scam. Updating on outcomes, Ward says: “The video has been viewed by a number of consumers – 480,000 of whom saw the advert, with 70,000 clicks on the advert itself, showing there is clear appetite from the public to learn about this.”

We encourage our customers to save the phone number provided on their insurance policy to their contacts in their mobile devices, so they have it to hand in an emergency.

Katie Davies, director of underwriting services and fraud, Ageas UK.

Describing other steps Aviva is taking, he adds: “Where a customer informs us that they have claimed through a spoof advert inadvertently, we work to identify the advertiser and associated companies for further investigation, and intelligence on these is shared with the IFB and relevant regulators.”

Aviva has engaged with the police too, as Ward reports: “We’ve worked with both the College of Policing and Police Service of Scotland, educating officers who may attend road-traffic accidents about the issue.”

Davies also highlights the importance of prevention through practical advice. “We encourage our customers to save the phone number provided on their insurance policy to their contacts in their mobile devices, so they have it to hand in an emergency,” she explains.

In the meantime, the problem remains a significant one. 

Ward says: “We continually receive reports from customers who describe falling victim to these adverts, believing they were speaking to their insurer or an authorised representative.  

"Our best assessment at present is that hundreds of customers across the industry are likely to be claiming via these adverts every month.”