Insurers Urge Ofcom to Bolster Online Advertising Regulations
Aviva has called on Ofcom to strengthen its reforms to online advertising rules, particularly concerning the Fraudulent Advertising Codes of Practice. The insurer has noted a significant increase in fraudulent activity, with its own ghost broker Cease and Desist notices doubling and website takedowns rising more than eightfold compared to the previous year.
Ghost broking involves the sale of fake or invalid insurance policies, frequently promoted via social media platforms. Aviva attributes its latest figures partly to the diligent work of its application fraud teams in collaboration with law enforcement agencies. However, the company stresses the need for a more coordinated effort to combat this growing problem, highlighting that young people are particularly vulnerable. Research from the Financial Conduct Authority (FCA) indicated that nearly half (49%) of young drivers have purchased insurance through social media or messaging applications.
Aviva stated that key measures to prevent insurance fraud include reforming online advertising rules. They advocate for fraudulent content to be identified and removed before it can cause public harm. Additionally, Aviva is calling for a new coalition involving financial institutions, social media platforms, consumer groups, regulators, and law enforcement to share real-time intelligence and discuss broader trends. The insurer also encouraged social media platforms to enhance intelligence sharing and cooperation with the insurance industry, suggesting they should contribute more proportionally towards enforcement and victim support.
The insurer warned that without updated regulations and more joined-up enforcement, the public risks becoming further victims of scams, which form part of a wider trend of online fraud enabled by technology. This trend includes investment scams and the promotion of unregulated financial advice by ‘finfluencers’. Aviva’s remarks were made in response to Ofcom’s consultation on Fraudulent Advertising Codes of Practice, as detailed on their corporate website (Aviva corporate website).
Impact on Consumers
The reforms proposed by Ofcom and advocated for by companies like Aviva aim to create a safer online environment for consumers. By pushing for stricter rules on online advertising, particularly on platforms where younger demographics are prevalent, the intention is to reduce the incidence of fraudulent schemes. This includes everything from fake insurance policies, as highlighted by Aviva, to potentially investment scams that are often promoted by unregulated individuals online.
A more collaborative approach between industry bodies, social media companies, and regulatory authorities could lead to quicker action against fraudulent advertisers. For consumers in Liverpool and Merseyside, as well as across the UK, this could mean greater protection from financial losses and distress caused by deceptive online marketing practices. Ofcom’s role, as outlined in their broader media research (Ofcom media use and attitudes), extends to overseeing how media impacts the public, and these advertising rule reforms are a significant part of that remit.
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