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Drivers warned to ‘steer clear’ of ghost insurance brokers

News story
News story

Derbyshire car owners are being warned about social media insurance scams that could see them lose their licence.

Ghost broking is the name given to a fraud used by conmen who sell fraudulent car insurance online – often with heavily discounted rates.

The fraud is typically carried out in a number of ways: conmen will either forge insurance documents, falsify the driver’s details to bring the price down or take out a genuine policy, before cancelling it soon after and claiming the refund plus the victim’s money.

Between 2014 and 2017, Action Fraud, the national fraud and cyber reporting centre, received more than 850 reports linked to ghost broking, with reported losses for both individuals and organisations totalling £631,000. On average, each individual victim lost £769 from this type of fraud.

Over the past three year, fraudsters including a man who set up 133 fake policies, a teenage ghost broker who was sentenced to jail and a man who made £59,000 from ghost broking have been dealt with by the courts.

However, it is believed that the true number of ghost broking victims may be much higher than this figure, as some motorists may be driving on the roads right now unaware that their policy is fraudulent.

It is only when they are stopped by police, or attempt to make a claim, will they find out that they don’t have genuine cover.

Now Derbyshire Constabulary is backing the #SteerClearOfFraud campaign run by the City of London Police’s Insurance Fraud Enforcement Department.

It is a legal obligation to have valid car insurance and without it victims will experience the severe harm caused by ghost broking, including:

Points on their driving licence

Vehicle seizure and possible destruction of it

A fixed penalty notice

Costs to retrieve impounded vehicle

Liable for claims costs if involved in an accident

This is on top of the money motorists will have lost buying the invalid car insurance and the money they will have to spend to then buy a legitimate insurance policy.

Analysis into ghost broking has revealed that men, aged 20-29, are most likely to get targeted and that the most common method ghost brokers will use to make initial contact with people is through social media, particularly Facebook and Instagram.

Other contact methods include adverts in newspapers and magazines, cold calls and being introduced, either directly or by friends, family members or work colleagues.

How to stay safe when buying car insurance

Trust your instincts – if an offer looks too good to be true, then it probably is.

Ghost brokers often advertise on student websites or money-saving forums, university notice boards and marketplace websites. They may also try to sell insurance policies in pubs, clubs or bars, newsagents and car repair shops.

Be wary of ghost brokers using only mobile phone or email as a way of contact. Ghost brokers have even been reported using messaging apps, including WhatsApp, Snapchat and Facebook. Fraudsters don’t want to be traced after they’ve taken your money.

If you are not sure about the broker, check on the Financial Conduct Authority or the British Insurance Brokers’ Association website for a full list of all authorised insurance brokers: register.fca.org.uk and biba.org.uk.

You can also contact the insurance company directly to verify the broker’s details.

You can check to see if your car is legitimately insured on the Motor Insurance Database website: ownvehicle.askmid.com.

Detective Inspector Debbie King, head of economic crime at Derbyshire Constabulary, said: “With everyone looking for a bargain it can be tempting to go with that ultra-low priced insurance quote.

“But as with every deal – often if it looks too good to be true then it probably is. Fraudsters are becoming ever more inventive in their efforts to scam people and I would urge everyone to take care when ordering any goods or services online.

“Anyone who drives should understand the importance of insuring their vehicle correctly. Without it you could receive a fixed penalty of £300 and six penalty points. And, if the case went to court, you could be looking at an unlimited fine and a period of disqualification.

“For many, that could mean losing their job and possibly their home.

“That’s why it is absolutely crucial to buy your insurance policy from a reputable broker. If you are ever unsure it is best not to take out the policy.”

Ben Fletcher, Director of the Insurance Fraud Bureau, said: “Ghost broking is a complex issue and one that we do not take lightly. Ghost brokers often target vulnerable people or communities, but we do also sometimes see cases where people have knowingly bought fraudulent or invalid policies in an effort to pinch the pennies.

“It is essential that we raise awareness about the issue of ghost broking to stop innocent victims being targeted and to educate those who may consider buying insurance from a disreputable source.

“We work closely with police and insurers to track all those involved in ghost broking scams in order to bring about charges for those guilty parties.”

If you have or think you have been a victim of ghost broking, get in touch with IFED via phone on 0207 164 8200 or email at IFEDIntel@cityoflondon.pnn.police.uk. Alternatively, report it to Action Fraud by calling 0300 123 2040.

You can also report to the IFB’s Cheatline by completing their online form or by calling anonymously and in confidence on 0800 422 0421.