Is your car insurer selling you out to ambulance chasers?


Let me tell you a story. Man has car accident. Man calls car insurance company. Ambulance chasers call Man, without Man informing them of his car accident, let alone whether or not he is suffering from a heinous injury for which Someone Must Pay. Coincidence? Unlikely.

The insurance company referrals scheme is, essentially, just another way for legal firms to market their services, and for insurance companies to make a pretty penny. Critics of the practice, such as Jack Straw MP, have described it as a "racket" and a "dirty little secret".

Now, the government has pledged to reform the practice which sees your insurance company providing your personal details to so-called ‘ambulance chasers’.

But isn’t this illegal? What about Data Protection?

If a firm discloses your details to a third party without your express or implied consent, then yes, they are in breach of the Data Protection Act and can be fined or ticked off by the Information Commissioners Office.

However, apart from a few unscrupulous claims-management companies, who have been caught cold calling and spam texting consumers without consent, unfortunately for most of us, a clause permitting the insurance company to sell your details to the highest bidder is often included in the teeny tiny small print of your insurance policy’s terms and conditions. In order for your company to NOT sell on your details, you will normally need to specifically opt out.

Is this a new thing?

Well, no. Referral fees have been around for 20 years or more, but the increasingly aggressive nature of some of the cold calls, particularly at a time when people may be hurt and sensitive, has generated public, and now political outrage.

The business of referrals can be highly profitable for insurance companies themselves, meaning they would be keen to retain this income stream, so it is ironic that umbrella groups for both insurance and legal services have called for it to be banned.

Both the Law Society, which represents solicitors, and the Association of British Insurers (ABI) have called for it to be ended. The Solicitors Regulation Authority, has called for solicitors to ensure any referral system "does not compromise their clients' interests". The Legal Services Board, an independent body regulating lawyers in England and Wales, recommended the referrals system be made more transparent, but not actually called for an outright ban.

So far only one major insurer, the French-owned Axa, has so-far pledged to stop accepting referral fees. And presumably from passing on the information, too.

So what is the Government going to do?

The government is worried the current system has created a US-style "compensation culture", in which people are encouraged to launch frivolous claims by law firms who have bought their contact details and are offering to work on a "no win, no fee" basis. The Government is currentlyb pledging reform, although many opposition MPs are calling for an outright ban on the practice.

Those in favour of a ban say it would force lawyers to win clients purely on the basis of quality and cost, as well as bringing legal fees down. Those against think it would be harder for poorer people to get ‘justice’ if there was a subsequent impact on the ‘no win, no fee’ market.

But even if referral fees are banned, would it actually work? Past attempts have failed, and the prohibition of such a successful marketing arrangement is unlikely to succeed, particularly when the ones who will be losing out are the big insurance companies who like to bend the Government’s ear.

It seems the only way to limit or prevent the practice is by consumer power- either by selecting only those insurers who have themselves opted-out of the practice, or by opting-out of your insurance company’s marketing communications yourself.



  • Alexis
    Could you a) find out how much they have sold your details for and b) demand a cut of this sum? I wouldn't mind my details being sold if I got a £200 cut from a £600 referral!
  • The B.
    My missus decided to write off our car semi destroying herself in the process, 2 weeks later the "no win no fee" texts started, she's on the TPS too.
  • Dick
    Even before big business was doing it, it was probably being done by people working for them and they pocketed the cash. I remember stories in the 1970s about travel agents selling details of when their customers were going on holiday to local thieves.
  • james D.
    What really makes me mad about this is insurers often site the rise of claim culture as the reason insurance costs are rising, but if they are the ones selling the data it's their own bloody fault. They sell claim data to make money, then put our insurance up because people claimed. The fuckers.
  • Grumpy
  • Bazinga
    I've not had an accident and I get the texts regardless.

What do you think?

Your comment