Morgan: Shocked at involvement of solicitors
An MP has branded law firms that benefit from so-called ad-spoofing as “dishonest” and unethical, and called for action against them in a parliamentary debate last week.
Ad-spoofing involves scammers who use fake websites to appear at the top of search engines to trick drivers into thinking they will be directed to the website of the genuine insurer after they have had an accident.
Helen Morgan, the Liberal Democrat MP who secured the debate on car insurance fraud, said the organisation behind the ad would sort out all the elements of the accident.
But the fees “that have been racked up for the tow truck, the repairs and the car hire are potentially excessive”, she went on.
“They may also have invited you to see a doctor, maybe in a hotel or other obscure location, and convinced you that there is a valid claim for whiplash or other injury as well.
“What is the problem with all this? Basically, behind the fake ad is an organisation that will claim for all these costs in a court case, based on the fact that it was not your fault. If they lose that court case, you are on the hook for the exorbitant costs.
“On top of that, you will have had an accident and failed to tell your insurance company, and there are potential legal ramifications of that as well.”
Ms Morgan said she was “shocked” to find out that there were “qualified solicitors working for no win, no fee firms involved in this type of scam”.
“How can that possibly be ethical? It is clearly dishonest, and for that reason I would argue it is barely legal,” she said.
The MP said the Solicitors Regulation Authority “needs to up its game, because those individuals are bringing their profession into disrepute, seemingly with the blessing of the organisation that is supposed to uphold standards”.
She also highlighted the need to hold tech companies allowing the ad-spoofing to account.
Mark Garnier, the Conservatives’ shadow economic secretary to the Treasury, noted how, while claims management companies were regulated, accident management activities were not.
In response, Lucy Rigby, the economic secretary to the Treasury, said she hoped Ms Morgan “will be reassured by the fact that there is ongoing dialogue on the issue between His Majesty’s Treasury and the [Ministry of Justice] to determine what might be done in this area”.
She pointed too to the Online Safety Act 2023, which placed duties on the largest social media platforms to tackle fraudulent adverts.
“Ofcom is due to consult on those measures later this year,” she said. Once implemented, Ofcom will have the power to take enforcement action when it finds non-compliance, including fines of up to £18m or 10% of qualifying worldwide revenue, whichever is greater.
Further, the government has launched an online advertising taskforce, whose purpose is “to strengthen and maximise the adoption of transparency standards across the wider programmatic ecosystem so that bad actors can be identified, disrupted and, when appropriate, prosecuted”.
At the start of this year, the Advertising Standards Authority banned adverts [1] from three companies it accused of ad-spoofing.