Potentially misleading adverts for protection are still proliferating on social media despite warnings issued two months ago over the rise of such promotions.
Despite FTAdviser highlighting in April the potential problems with "opportunistic" protection adverts being promoted across popular social media platforms, Jiten Varsani, independent mortgage and protection planner at London Money said he had seen a drastic increase in such adverts on Facebook, Instagram and Twitter.
The adverts refer potential protection customers to advisers, but Mr Varsani called the straplines on some adverts “simply shocking”.
Adverts from one lead generation company cited that life insurance cover of £237,000, with monthly premiums at £10, was “still available but prices may rise soon…” Another also stated that “UK families are rushing to secure life cover from only 20p per day”.
Commenting on the adverts, Mr Varsani felt they employed scaremongering to encourage consumers to purchase cover before a potential rise in price, and portrayed a notion of panic buying.
Naomi Greatorex, managing director at Heath Protection Solutions, agreed she had seen a “noticeable increase” in adverts on social media.
Ms Greatorex thought that “playing on people’s fears at a time when [they] are very stressed and worried about their health and the risk of illness could be seen as inappropriate… you are really driving people to buy life assurance through fear”.
She added quoting premiums of £10 a month created a “completely unrealistic picture to consumers of how they can meet their life insurance needs. It can then be very difficult to talk to older clients, and clients with a medical history about the true cost of insurance, once they have a premium like this in mind”.
In April, Dan Thut, director of operations at insurance advertising firm Rocketer, told FTAdviser that consumers’ new sense of need for insurance was one reason behind an increase in “opportunistic lead generators selling on fear and showing misleading ads that may be exploiting vulnerable consumers”.
The Advertising Standards Authority confirmed adverts on social media for UK-based lead generation companies are covered by its rules and fall under its regulatory remit.
For example, the non-broadcast advertising code states: “Marketing communications must not materially mislead or be likely to do so”.
A spokesperson for the ASA said: “Where we find our rules are being broken we will take action to have the ads removed from the platform they appear on. Most often that involves instructing the advertiser to withdraw their ad.
“But where an advertiser is unable or unwilling to work with us we will work with the platform directly to have problem content taken down.”
The advertising regulator said it had previously investigated and upheld complaints in this area.
Johnny Timpson, technical and industry affairs manager at Scottish Widows, agreed the number of protection adverts on social media had “increased sharply” since lockdown.
Mr Timpson noted he had seen some adverts “appearing to lead the consumer to think they are applying directly to an insurer”. He added: “As we seek to retain and improve consumer trust in insurance, this has to stop”.