The Police have warned that thousands of motorists could be unwittingly driving without insurance because of fraudsters known as “ghost brokers” selling fake policies.
Men in their 20s are most likely to be targeted by ‘ghost brokers’ who often contact victims on social media, particularly Facebook and Instagram. They also advertise on student websites or money-saving forums, university notice boards and marketplace websites and may sell insurance policies in pubs, clubs or bars, newsagents and car repair shops.
City of London officers report that detectives have received more than 850 reports of the scam in the last three years, with victims losing an estimated total of £631,000.
These criminals who sell fake insurance policies to unsuspecting drivers are known as ghost brokers; they carry out the fraudulent act in one of three ways:
- Forging insurance documents, so there is no genuine policy of any kind
- Falsifying a driver’s details to lower insurance costs, but the policy can be invalidated when the insurance company finds out the truth
- Take out a genuine insurance policy then quickly cancel it and claim the refund as well as the victim’s money.
A national campaign has now been launched to warn drivers to be wary of heavily discounted policies on the internet or cheap insurance prices they are offered directly.
Some victims only realise they do not have genuine cover when they are stopped by police or try to make an insurance claim after an accident.
Police have taken action in 417 cases linked to “ghost broking” in the last three years, including one man who set up 133 fake policies.
How to avoid a ghost broker
- Buy insurance directly from an insurance company’s website. If you want to use a broker, visit the British Insurance Brokers’ Association website and check the broker is FCA registered
- Be cautious of brokers trying to sell insurance through social media, newsagents and pubs
- Trust your instinct – if an offer looks too good to be true, it probably is.
- Be wary of insurance brokers who only use a mobile phone or email to contact you
If you suspect a ghost broker is trying to contact you, call the fraud bureau on 0800 422 0421.
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