Brokers buying misleading leads could be found liable under ASA and FCA advertising rules
Lead generation websites are pretending to be leading insurance brands in order to dupe customers into applying for life insurance, COVER understands.
Google searches are sending customers to portals which are using well-known life insurance brands on their sites to entice consumers to start quotes.
Brokers who purchase leads appropriated fraudulently could be found liable under ASA advertising rules, which stipulate, under rule 2.1 of the CAP Code, that ‘marketing communications should be obviously identifiable as such and must not falsely claim or imply that the marketer is acting for purposes outside of its trade'.
The ACA has also said that advertisers should not allow their affiliates to have free rein over the content of ads and that this does not excuse them from complying with the CAP Code.
The FCA guidance on advertisement states that promotions must be ‘fair, clear and not misleading' and it is clear many lead generation firms are not including an FCA number as part of footings.
Because life insurance is regulated, the FCA rules state that firms need to be directly authorised or an appointed representative (IAR) for the firm they are introducing. Therefore liability sits with the buyer of the leads in the eyes of the FCA as firms ‘must take reasonable steps' to ensure financial promotion is not misleading.
Lastly, COVER understands that there are question marks around the validity of the ICO numbers registered to some lead generation websites.
Alain Desmier, managing director of Contact State, an advertising intelligence platform said: "The adverts that have appeared and increased in the last few days have been created to trick the consumer into believing they are applying directly to an insurer. This has to stop and intermediaries need to find out if they are indirectly buying leads from these illegal sites."
Desmier added that he had taken a number of panicked calls from major insurance brands recently due to more "rogue suppliers" entering the market to capitalise on COVID-19.
"The only way we can truly protect insurance consumers in this uncertain time is to work together, share information and set up an official certification process that ensures no consumer can be tricked into giving their details away," he said.
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