Fraudsters Con Motorists With Fake Insurance Policies
Young people are being targetted but anybody could fall victim, and it can prove extremely costly.
A new type of fraud has emerged in the motor industry and it looks to exploit vulnerable cash-strapped motorists who are desperate to make a saving on their annual insurance premium.
There’s no denying that car insurance is a dreaded expense that none of us looks forward to each year. Depending on your age, driving history, address and countless other metrics, car insurance can cost thousands of pounds. It’s no surprise people are keen to make a saving, but it is this desire to save money which has seen the rise of ‘Ghost Brokers.’
What on earth is a Ghost Broker?
A Ghost Broker is someone who markets themselves as being able to provide extremely cheap car insurance to individuals, usually far too cheap for legitimate insurers to compete with. The broker will then take the victim's vehicle details and purchase a car insurance policy using favourable credentials which bring the price of the insurance right down. The policy documents are then doctored by the broker to suit the victim. The doctored documents will then appear in the post a week or so later and all will seem well to the unsuspecting motorist. Naturally, the victim will pay the broker the cost of the false insurance policy plus a commission on top.
The victim will then be able to do a MID (Motor Insurance Data) check on their vehicle registration and it will show up as insured. The car will sail through ANPR cameras at the roadside and it will not be immediately flagged to ANPR equipped police cars. The victim would essentially be none the wiser about the fact that the insurance policy they have purchased isn’t worth the paper it is printed on.
When things seem too good to be true, they usually are. Car insurance companies are extremely clear with their customers that if they provide false details then the insurance will become void. This is where the victim will be punished.
Firstly, in the case of an accident, the insurance is extremely unlikely to pay out and the victim will have to foot the cost of the repair and compensation for any injuries caused by themselves. Then, even if the victim doesn’t have a crash, the police will impound the offending vehicle, charge the illegitimate driver with a fixed penalty notice of £300, then at least another £150 to have the vehicle returned from the impound, and, of course, the victim will have to pay for a legitimate insurance policy again to drive it away… It’s really not worth it.
What can be done about it?
Statistics show that 17-24-year-olds are 26% more likely to become victims of ghost broking compared to 25-34-year-olds and 197% more likely than 35-44-year-olds. This makes sense as individuals under 25 are charged noticeably more for their insurance and are therefore more desperate to make savings. Another contributing factor is that ghost brokers tend to offer their services on social media platforms, such as Snapchat and Instagram, which resonate considerably more with a younger audience.
To protect yourself from Ghost Brokers we’d always recommend checking to see if the broker has a legitimate website with functioning contact details and a physical address. Don’t trust a social media profile.
Secondly, when buying through a broker, we’d strongly encourage you to confirm with the British Insurance Brokers’ Association (BIBA) https://www.biba.org.uk/ to ensure they are registered. Similarly, if the company claims to be an insurer themselves then check the Motor Insurers Bureau (MIB) https://www.mib.org.uk/ and finally check with the Financial Conduct Authority (FCA) https://www.fca.org.uk/ to confirm that anyone offering insurance advice is registered.