OFT takes action against 'confusing' keyword-promoted health card firms

The OFT said that consumers had been confused by the companies and that adverts from the firms appeared high in the paid-for search rankings when the free card was the subject of an internet search.

European Health Insurance Cards (EHIC) entitle EU residents to access state healthcare in other EU countries when on holiday. They are free, but the OFT said that online operators were charging a fee, typically £10, to process applications.

It said that applicants were not aware that the card itself was free and that it was the websites, and not the health providers, that charged them.

"The websites supposedly offered a ‘review and forward’ service for the applications, for which a fee was charged," said an OFT statement. "But many consumers believed they were paying for an EHIC via the official site, and were unaware that EHICs are available free of charge from the NHS. Certain sites had purchased sponsored search engine links and therefore featured prominently when consumers searched for 'EHIC'."

Most search engines use keyword advertising, via which an advertiser can have its messages displayed beside natural search results. Ads are ranked by relevance and by who paid the most to have their ads appear beside certain terms.

Many court cases are being conducted in Europe's national courts and through EU courts about whether or not the buying of other people's trade marked terms breaches their trade mark rights. Many of those cases centre on whether that activity causes consumers confusion.

The OFT investigated five companies after complaints were made to Consumer Direct and to the Department of Health.

"The OFT took the view that the online traders had breached the Consumer Protection from Unfair Trading Regulations 2008 and, in certain cases, the Electronic Commerce (EC Directive) Regulations 2002," said the OFT. "The websites were found to be misleading in their presentation as they mimicked the EHIC brand, used an official sounding domain name and omitted important information by failing to clearly disclose that they were not the official provider of EHICs."

The domain names used by the companies included ehic.org and ehic.uk.com. The OFT said that three of the companies had given undertakings to it that they would not engage in deceptive practices in the future.

One other company has ceased trading and a fifth has had its domain name suspended by its domain name registrar on the basis of the OFT's concerns.

The OFT said that the problem with the services was not the activities they were carrying out but the fact that, in its opinion, the companies misled consumers.

"While it is not unlawful to charge money for a reviewing and forwarding service, traders must be clear about the product or service they are offering, and not trick consumers into parting with money for services they don't want," said Heather Clayton, senior director of the OFT's consumer group. "People seeking to obtain government funded services such as an EHIC should check carefully that they are using an official government website."