New joint analysis with 4WARN finds three in four insurers targeted by digital opportunists
A new joint analysis by the National Insurance Crime Bureau (NICB) and digital risk intelligence firm 4WARN is warning insurers about the role third-party litigation funding (TPLF) can play in driving fraudulent, high-volume claims litigation across the U.S. market.
Reviewing 783 insurance companies between June and August 2025, NICB and 4WARN found that three in four carriers had been directly targeted by litigation-related digital marketing campaigns backed by outside funders. According to the organizations, those campaigns are instrumental in fueling excessive claims litigation, increase costs, and push premiums higher for policyholders.
“The sheer scope and impact of outside funding in driving insurance claims litigation is even greater than previously suspected,” said NICB President and Chief Executive Officer David J. Glawe. “Excessive litigation and insurance fraud schemes facilitated by third-party litigation funding continue to evolve with more funding pouring in and further aggressive targeting and manipulation of unsuspecting consumers.”
For example, in one documented instance, a single litigation funder backed 13 law firms that “unethically targeted 66 different insurers to drive claims litigation and maximize the investor’s return.”
How TPLF Can Enable Fraud and Excessive Litigation
TPLF, as described in the assessment, involves outside investors and entities—both domestic and foreign—providing financial resources to claimants and/or law firms in exchange for a portion of any settlement. In some cases, these investors may influence case selection, litigation strategy, and settlement posture to maximize their return.
At its most abusive, NICB warns, TPLF-facilitated fraud can involve “outside investors secretly funding litigation that is based entirely on exaggerated, fraudulent, and even fictitious insurance claims.”
NICB’s concerns have been sharpened by its work on the United States v. Constantine case, a $31 million trip-and-fall insurance fraud scheme facilitated by TPLF that “preyed upon the poor and homeless.” Since assisting in that investigation, NICB has continued to document how coordinated networks of unethical lawyers and medical providers use outside funding to drive fraudulent claims and litigation, often amplified through digital marketing.
Digital Opportunists Targeting Insurers at Scale
The joint assessment concludes that outside funders investing in “excessive and opportunistic litigation” targeted U.S. insurers “at significant scale.” Among the key findings made public to raise awareness:
- 74% (585 of 783) insurance companies assessed were directly targeted by opportunistic litigation-related marketing campaigns, many of which were resourced by outside funders.
- Digital manipulation methods used in TPLF-facilitated fraud include search engine diversion, brand impersonation through cloned portals and misleading domains, and AI-generated content aimed at inflating insurance litigation and/or profiting from exaggerated claims.
- While there is a direct correlation between legitimate law firm advertising and SEO activity, the assessment also identified “a separate class of fraudulent digital campaigns that exploit those same channels to drive mass litigation.”
- Schemes often include “runners” who coach, recruit, and coordinate plaintiffs, law firms, complicit medical providers, and digital marketing firms.
“Once again, we have found evidence of funders targeting insurers and initiating questionable lawsuits within the digital ecosystem,” said 4WARN Chief Executive Officer Todd Kozikowski. “Fraudulent third-party litigation creates a high-risk environment where digital opportunists use sophisticated online tools, automation, and large-scale targeting campaigns to deceive plaintiffs and make their activity appear legitimate.”
Call for Transparency and Legislative Action
Beyond documenting the tactics, the assessment calls on lawmakers to adopt what it describes as “pro-transparency reforms” to expose funding sources and address improper incentives that can attract fraudsters.
While some state legislatures have begun to adopt measures aimed at increasing TPLF transparency and accountability, NICB and 4WARN argue that more action is needed at both the state and federal level “to shed light on funders and their impact on the insurance industry, consumers, and costs for all.”
“Our initial findings help reveal the threat of TPLF-facilitated fraud on the industry, but that picture will only become clearer as lawmakers adopt TPLF disclosure obligations and insurance carriers continue to diligently flag questionable claims that contain TPLF indicators,” Glawe said. “Reliable intelligence will help us ensure our ecosystem stays ahead of the threat.”
NICB Urges Insurers to Step Up Monitoring
NICB, described in the release as the nation’s premier non-profit organization dedicated to combating insurance crime and fraud, is urging carriers to increase their vigilance around TPLF indicators, particularly in the digital environment.
The organization is encouraging insurers to report suspected TPLF-facilitated fraud to NICB by calling 1-800-TEL-NICB and to strengthen internal monitoring and investigative efforts by:
- Expanding monitoring of digital campaigns, fake sites, and brand impersonations
- Tracking suspicious activity related to mass litigation tactics
- Investigating known opportunists and tracking suspected opportunistic activity to identify patterns
- Supporting TPLF transparency and reform efforts
- Sharing all insights with NICB
According to NICB and 4WARN, these steps, combined with expanded disclosure requirements for litigation funders, are critical to addressing what they describe as a growing threat of fraud and excessive insurance litigation fueled by third-party funding.
