Misleading as an Insurance Company? The Risks of 'Advertising Sites' Exploiting Loopholes

Insurance consumers are often entering personal information on advertising sites, believing them to be official insurance company websites, 

Insurance consumers are often entering personal information on advertising sites, believing them to be official insurance company websites, only to have their data transferred to General Agencies (GAs) without their knowledge. This issue stems from some GA websites exploiting loopholes in advertising regulations. In this post, we will explore the problems of these sites that mislead consumers into believing they are dealing directly with an insurance company and discuss potential solutions to address these loopholes.

1. The Prevalence of GA Advertising Sites Exploiting Loopholes in Advertising Regulations

Recently, some GAs in the insurance industry have been operating online advertising pages to sell insurance products after receiving compliance approval from the insurance company. These GAs act as sales organizations that sell insurance products on behalf of insurance companies in exchange for commissions. The issue lies in the fact that these advertising pages are designed to make consumers believe they are interacting directly with an insurance company, thus prompting them to enter personal information.

Most of these advertising sites use the corporate identity (CI) and primary colors of the insurance companies, making it difficult to distinguish them from official websites. Consumers, believing they are dealing with an insurance company, enter sensitive personal information such as their name, gender, age, and contact details. However, in reality, this information may end up being used in the GA's sales database.

2. Consumer Risks: Misleading Site Designs and Domains

Many advertising sites use UI and domain names that are almost identical to those of real insurance companies, making it easy for consumers to be misled. For example, the domain for a Samsung Fire & Marine Insurance sales site operated by a GA includes "samsunginsure," while another site for Meritz Fire & Marine Insurance uses "meritzdirectinsu." These domains closely resemble the actual names of insurance companies, leading consumers to mistakenly believe they are on the official site.

The problem is that these sites operate in a way that is difficult to challenge legally. The "Regulations on Advertising and Publicity of Non-Life Insurance" state that GA-operated advertising sites must display the GA's name and information, but there is no specific guidance on where or how this information should be shown. If the GA's information is displayed in small print at the bottom of the page or included in application documents, it is considered compliant with the regulations.

3. Lack of Clear Grounds for Restriction and the Need for Improvement

One major issue is the lack of clear grounds to restrict these misleading advertising sites. The General Insurance Association of Korea sets the standards for advertisements and promotions by insurance companies and GAs, but there are no specific regulations regarding domain names, making it difficult to prevent the use of addresses that could be mistaken for those of insurance companies.

An industry insider commented, "Consumers can file complaints, but these practices have been left unchecked for a long time due to established norms." To protect consumers, clearer regulations and stronger penalties are necessary.

Misleading insurance advertising sites pose significant risks to consumers. Even if the advertising methods of GAs are legally compliant, actions that deceive consumers into believing they are dealing directly with an insurance company and prompt them to enter personal information clearly need to be addressed. To this end, the improvement of advertising regulations, along with more explicit guidelines for consumer protection, is essential. Creating a safer environment for insurance consumers should be a priority.