posted 3 weeks ago

Motorists Tricked into Driving Without Insurance via New Scam

How ghost brokers con drivers into buying fake insurance, the penalties for falling foul and how to stay safe

 Ghost brokers modus operandi

Motorists that fall victim to fraudulent, callous, ghost brokers pay for non existent insurance and face penalties if stopped by police, the Steer Clear of Fraud Campaign revealed. The scam is straightforward. The broker promises to find you insurance at a competitive, too good to be true, price. The fraudster then either:

  • Produces fake documents not liked to a policy
  • Starts a policy, but provides false information to reduce the premium – which makes it invalid - then pockets the difference
  • Starts a policy, but cancels it and retains the refund

Penalties for not having motor insurance

The police make no allowance if you become the victim of such crime. Whatever your intention and belief, you have not got valid insurance and that is against the law. Potential sanctions include:

  • Fine
  • Penalty points
  • Vehicle seized (or crushed)
  • Costs to retrieve your impounded vehicle
  • Liable for costs if involved in a collision
  • Immediate requirement to purchase genuine insurance

Number of victims

Action Fraud is the fraud and cyber reporting centre. Between November 2014 and October 2017, it received 850 reports that related to ghost brokers although the true number of victims is likely higher. Reported losses totalled £631,000 which equated to £769 per victim. It found one perpetrator alone set up 133 polices.

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How to avoid ghost brokers

The Steer Clear of Fraud Campaign revealed how to avoid falling victim to a greedy, selfish, ghost broker. The precautions include:

  • Recognise that ghost brokers tend to scout for business via social media, adverts in newspapers/magazines and cold calling
  • Note that if a offer looks too good to be true, it probably is
  • Beware brokers that can only be contacted via a mobile/e-mail
  • The British Insurance Brokers’ Association website has a list of authorised brokers - so check your broker’s credentials
  • The Motor Insurance Database confirms whether your vehicle is insured – so refer to its website

The Association of British Insurers Fraud and Financial Crime Manager, Mark Allen, confirmed: “Driving without valid motor insurance is a crime, full stop. Always be on your guard against someone offering you a deal that is too good to be true.” He added:

“The chance of getting caught without insurance is greater than ever. Furthermore, a criminal conviction for driving uninsured will make getting future insurance much more expensive. Stay legal on the road by shopping around in the competitive motor insurance market for the right insurance at the best price”, Allen concluded.