Accountability
Exposing Shipping Insurance Fraud in eCommerce
Most checkout “shipping protection” add-ons are not real insurance.
Overview
Exposing Fake Shipping Insurance Practices
Many eCommerce platforms and apps now offer “Shipping Protection” or “Order Insurance” at checkout — but most of these are not real insurance. In fact, many are operating illegally, selling unlicensed coverage and pocketing premiums without regulatory oversight.
Tactics
Common Tactics Used in Shipping Insurance Fraud
- Misleading consumers with terms like “Guarantee,” “Protection,” or “Coverage”.
- Failing to disclose licensing status
- Denying claims arbitrarily or ghosting customers
- Routing funds through offshore entities
Legality
Why It’s Illegal
Under U.S. law, selling a paid promise to indemnify a customer from loss
constitutes the sale of insurance. That means:
What Happens
Consequences
- Regulatory fines
- Department of Insurance shutdown orders
- FTC enforcement for deceptive marketing
- Consumer and competitor lawsuits
Our Role
What We’re Doing
We are building a public library of non-compliant companies so merchants, regulators, and consumers can make informed decisions and file complaints.
