The insurance industry must work together to collate information and case studies if it is to prevent ad spoofing from ‘legitimising fraud’

By Editor Katie Scott

This week, the insurance industry received some good news in the fight against spoof adverts that thwart policyholders’ attempts to reach their insurer via their mobile immediately following a road traffic accident.

On 8 March 2022, the government confirmed that a new fraudulent advertising duty would be included within the scope of the Online Safety Bill (OSB).

Katie Scott_bw_path

Katie Scott

This means that search engines and social media firms will be required to put proportionate systems and processes in place to prevent or minimise the publication and hosting of fraudulent adverts – including, for example, scammers that pay to display online advertising that impersonates legitimate businesses.

Spoof adverts on search engines such as Google have posed problems for the insurance industry recently, with fraudulent agents paying to have adverts impersonating insurers ranking highly in search results.

This aims to trick policyholders into phoning the fraudster directly using their mobiles’ ‘click to call’ functionality following a road accident, rather than contacting the genuine insurer. The scammer is then able to obtain the policyholder’s legitimate claim information.

The practice of ad spoofing has certainly received the wrath of the insurance sector.

For example, speaking during March’s Fraud Charter roundtable event, hosted by Insurance Times and sponsored by Carpenters Group, Donna Scully, the law firm’s director, said: “It’s unbelievable that fraudulent or bad claims management companies (CMCs) can go on to Google, go onto the internet and pretend to be an insurance company. It’s unbelievable that they can pay to do that. It is a major issue.

“It’s that feeling [that] if you pay enough money, you can do what you want. That’s not acceptable and it is causing harm. It just feeds fraud as well.”

Keoghs partner Ruth Needham agreed: “It’s almost legitimising fraud. It’s absolutely taking the mickey out of people at a vulnerable time.”

She continued: “If, ultimately, Google applied [its] own terms and conditions that [it has on its] system, we wouldn’t have to worry about this. But [it doesn’t and it] will say that [it doesn’t] have the ability to police it.”

Karen Mann, partner at DWF, told Fraud Charter attendees that one of the law firm’s clients has “reported seeing a website impersonating them with a disclaimer at the bottom”.

Regulating the internet?

Despite the OSB being viewed as broad step in the right direction by industry commentators, Needham shared her “nervousness” with Fraud Charter attendees about how the OSB will be enforced.

“Who do we make the regulator of the internet?” she asked. “There isn’t an easy solution to that.”

The newly confirmed fraudulent advertising duty, however, pinpoints the UK’s communications regulator, the Office of Communications (Ofcom), as the enforcement body of choice.

The government explained that Ofcom will be setting out codes of practice in due course that will inform platforms on what they need to do to fulfil the new duty.

Measures Ofcom may identify could include making firms scan for scam adverts before uploading them to their systems, checking the identity of firms that wish to publish advertisements and ensuring that financial promotions are only made by organisations authorised by the FCA.

Ofcom will also wield the power of blocking companies’ services in the UK if they fail to adhere to the new duty, or the regulator will issue a fine of up to £18m or 10% of annual turnover.

But, although Ofcom will “oversee whether companies have adequate measures in place to fulfil the duty”, it “will not assess individual pieces of content”.

Scully also questioned the proposed effectiveness of the OSB, especially as the section pertinent for the insurance sector is “such a small part” of the 168-page legislation.

“I can tell that we’re not really confident as a group,” she mused.

Fraud Charter guests concurred that the recent Covid-19 pandemic and ongoing conflict involving Russia and Ukraine have unfortunately further bumped the OSB down the government’s list of priorities too.

Teaming up

For Faye Fishlock, head of defendant services at Carpenters Group, the baton will once again need to be passed to the insurance industry if spoof ads are to be tackled in a timely fashion.

For example, she cited that two insurers in her network have a reciprocal information sharing arrangement around spotting potential spoof adverts – she believes this approach has to be extended so that “disrupting fraudsters can be achieved much quicker and with certainty”.

She explained: “A lot of it will fall to us as the industry to see what we can do while [the government] try and sort out the bill.

“The quick route is certainly not the Online Safety Bill – that’s going to take a long time.”

Both Scully and Fishlock added that the industry needs to collate information and case studies that portray the detrimental impact spoof ads have on consumers - this can then be presented to regulators to emphasise the gravitas of the situation.

The Insurance Fraud Bureau is already doing a lot of work around this too, Scully noted.

Tackling spoof adverts represents yet another area where the insurance industry would benefit from greater collaboration and communication.

This type of fraud hurts insurance businesses, consumers and the sector’s already woefully dented reputation, so teaming up to share insight and information is a sensible next step – OSB or not.