Paid ad spoofing in the car insurance industry

There will be a debate on fraud in the car insurance industry, focusing on paid ad spoofing, in Westminster Hall on 22 April 2026. The debate will be opened by Helen Morgan MP.

What is paid ad spoofing?

Paid ad spoofing refers to where businesses make ads that mimic legitimate businesses and pay for these ads to appear in search results when an unsuspecting customer searches for the legitimate business.

In the context of car insurance, it usually refers to unscrupulous claims and accident management businesses purchasing ads which are shown when drivers try and search for their insurer’s contact details to make a claim following an accident. DirectLine observes that the business model for such companies “rel[ies] on the fact that in the aftermath of an accident, you might not be as vigilant as you’d otherwise be, searching quickly on your mobile and clicking on the first option you see”.

A driver who contacts one of these businesses might be under the misapprehension that they are dealing with their own insurer. The business may in fact just be a scammer looking to harvest personal details from the claimant. Alternatively, the business may arrange various services including a replacement hire car for the driver, with the intention of recovering these costs from the driver’s insurer. However, if the insurer challenges these costs, drivers can be left to pick up the bill.

Legal considerations of paid ad spoofing

There is a distinction between companies which may buy ads to appear high up in searches for insurers but transparently state they are a separate company independent of the insurer, and those that buy ads attempting to mislead a customer into thinking that they are the insurer being searched for.

As discussed in the recent court case of Parker v Skyfire Insurance Co Ltd it is not in and of itself unlawful for a company to pay for its own results to appear when an individual searches for another unrelated company like an insurer.

However, a company using ads to pretend to be an insurer may fall be found liable of:

• Breaching regulation by the Financial Conduct Authority (FCA)
• Breaching regulation by the Advertising Standards Authority (ASA), as demonstrated in
• Fraud and misrepresentation

Scale of the issue

The scale of paid-ad spoofing in the car insurance sector is unclear. In January 2025, the industry-led Insurance Fraud Bureau said it was investigating 140 cases accounting for more than £1.8 million in suspected fraud. However, the organisation said the scale was likely much larger, as many people are unaware when they have been targeted.

Research by the Association of British Insurers published in 2024 found that four-fifths of adults aware of insurance fraud had never heard of ad spoofing.

Government policy and recent action

There have been various efforts to tackle problems associated with paid ad spoofing in recent years.

In 2019, the FCA became the regulator for financial services claims management companies operating in Great Britain. This means firms must become authorised by the FCA to carry out these activities, and firms must follow the FCA’s rules which include communicating with customers in a way that is clear and not misleading. Firms which repeatedly break these rules may have their authorisation removed. Customers who are unhappy with these companies can escalate complaints to the Financial Ombudsman Service.

However, regulation does not extend to all companies who might be buying ads to compete with insurers; in particular certain accident management activities are unregulated.

From September 2021, Google has required companies advertising financial services to UK consumers to demonstrate they are authorised by the FCA, subject to a limited number of exemptions.

The Online Safety Act 2023 will place new duties on large search service providers to tackle paid-for fraudulent advertising. The legislation will not come fully into force until Ofcom categorises services and publishes detail on firms’ additional duties under the act which is expected later in 2026. Law firm Browne Jacobson has said:

Although the relevant provisions in the Act are not yet in force, paid, advertising relating to motor insurance claims has already improved. Those involved in outright fraudulent behaviour are not as prominent as they once were. Some search engines have introduced stricter policies governing advertisements on their platforms.

In October 2024, the government set up a Motor Insurance Taskforce comprised of government, regulatory, industry and consumer bodies to address rising insurance premiums. In December 2025, the taskforce published its final report saying:

Where the FCA identifies unlawful content, including ghost broking, ad-spoofing and material posted by finfluencers, it will seek to get the content removed and work with other partner agencies, including law enforcement, working to combat these activities.