Affinity insurance: fraud cases

The Global Federation of Insurance Associations (GFIA) ⁽¹⁾ estimates that fraud accounts for between 5% and 10% of the total amount of affinity premiums worldwide, or nearly 10 billion USD per year.

These types of fraud play out in various fashions such as:

• fictitious contracts,
• unauthorized withdrawals,
• fake compensation platforms.

⁽¹⁾ Created in October 2012, the Global Federation of Insurance Associations (GFIA) brings together 42 federations and associations in 68 member countries, representing 89% of affinity insurance premiums issued worldwide.

Recent events highlight the abuses associated with these practices, as illustrated by the following cases:

• France

Indexia /SFAM scandal (2), an emblematic case in Europe

SFAM, a French broker specialized in affinity insurance, particularly for telephones and multimedia, was convicted in December 2024 for deceptive commercial practices committed between 2017 and 2024.

The conviction relates to forced subscriptions without customer consent when purchasing electronic devices from major retailers (Fnac, Darty, SFR), abusive bank debits, and failure to comply with requests for cancellation or reimbursement.

According to the DGCCRF, there are thousands of victims, with more than 2 500 civil cases being lodged, including consumers who have had recurring and significant debits from their bank accounts despite reported cancellations.

With debts of 500 million EUR, Indexia has been placed in judicial liquidation. The group's CEO and founder has been sentenced by the Paris Court of Justice to 16 months in prison, a fine of 300 000 EUR (the legal maximum), and a five-year ban on corporate management.

Six companies in the group, namely SFAM Celside Insurance, Hubside, Cyrana, Foriou, Serena, and SFK Group, each received financial penalties ranging from 150 000 EUR to 1.5 million EUR.

⁽²⁾ SFAM: Established in 1999, Société Française d'Assurances Multirisques was an affinity insurance broker specialized in telephony and multimedia. It was later renamed Indexia.

Escroquerie à 7 millions EUR liée à de faux contrats d’assurance affinitaire

In March 2025, the Marseille Public Prosecutor's Office opened a preliminary investigation into fraud, money laundering, and deceptive commercial practices, following complaints from consumers who were victims of fraudulent debits from their bank accounts.

According to the DGCCRF, this was a vast fraud scheme organized around the company CSV. The latter, supposedly specialized in the repair of computer equipment, allegedly set up fake direct debit mandates, presented as being linked to alleged affinity insurance contracts. The victims were thus debited 3.99 EUR each month between 2020 and 2025, without any actual service being provided.

• United Kingdom

Affinity Insurance Solutions Ltd, insufficient or misleading information

In 2023, consumers filed a complaint against Affinity Insurance Solutions Ltd, an affinity insurance provider. They accused the company of providing insufficient or misleading information about their home insurance policy. They felt they had been misinformed when they underwrote the policy online.

• United States

American Vehicle Protection Corp., fraud and deceptive business practices

The Federal Trade Commission filed in 2022 a lawsuit against American Vehicle Protection Corp. for fraud and deceptive business practices.

The company sold non-existent "extended vehicle warranties" to thousands of consumers across the country through mass telephone calls and deceptive practices.

The regulatory framework is being strengthened

In response to all these abuses, regulators around the world have taken a tougher stance.

In France, the Hamon law (2014) introduced, simplified termination of contracts beyond one year, requiring clear pre-contractual information.

Adopted in 2018, the European Insurance Distribution Directive (IDD) requires distributors of affinity products to obtain the explicit consent of the insured and to provide them with a standardized information document (IPID) before any subscription.

Since 2022, the French consumer protection agency DGCCRF has been conducting targeted inspections: more than a hundred retailers have received formal notices, particularly in the electronics, telephony, and travel sectors.

In the United Kingdom, the Financial Conduct Authority (FCA) introduced insurance distribution rules in 2023. This is a legal framework governing the sale of consumer insurance products, including affinity insurance.

In the United States, there are no specific federal regulations for affinity insurance. It is at the state level that insurance departments manage this segment, protect consumers, and prohibit misleading or abusive sales.

In Africa, the regulation of affinity insurance remains underdeveloped. In Morocco, ACAPS the Supervisory Authority of Insurance and Social Welfare launched a nation-wide awareness campaign on forced sales in 2023 and is preparing a guide to best practices.

In Egypt, similar legislation aimed at regulating digital distribution and penalizing sales without explicit consent was introduced in 2025 by the regulatory authority.

In South Africa, the affinity products market is not specifically covered by law. However, the Financial Sector Conduct Authority and Financial Advisory and Intermediary Services supervise the sale of insurance products and protect policyholders against, among other things, immoral sales and insufficient information when underwriting a policy.

Shortcomings still lingering

Despite these regulatory advances, some gray areas are still there. Inspections remain occasional, financial penalties are limited (often less than 100 000 USD), and the traceability of margins remains fuzzy.

In response to this situation, consumer associations are calling for public reporting of commissions paid to distributors ⁽³⁾.

This asymmetry of information undermines the legitimacy of the model. For many experts, the future credibility of affinity insurance will depend on complete transparency regarding the actual cost and compensation rate, similar to the standards imposed on traditional insurance.

Affinity insurance is therefore at a crossroads: a protective tool when its terms and conditions are clear, and a source of dispute when its process becomes opaque.

⁽³⁾ Estimated between 30% and 50% of the total contract price, according to FG2A.