Motorists are being alerted to the dangers of fraudsters who sell worthless insurance policies to unsuspecting members of the public.
A national campaign launched by the City of London Police this month aims to highlight the dangers of ‘ghost broking’ - where drivers are duped by a fake insurance salesperson.
There are three ways customers can be scammed. Fraudsters can forge insurance documents to make the victim believe they are insured, they can also falsify the driver’s details to bring the price down illegally or they may take out a genuine policy but cancel it after handing the documents to the customer, pocketing the refund and the victim’s money.
National fraud agency Action Fraud says that more than 850 cases have been reported to it in the three years to October 2017, with the average victim losing £769 to the scam.
As well as losing their cash, motorists are also breaking the law by driving a vehicle without the correct insurance. In many cases, victims only find out they’ve been duped when they are pulled over by police or try to claim after a road traffic accident.
These ghost brokers often target men in their 20s, using social media to make contact.
Detective chief inspector Andy Fyfe, head of the City of London Police insurance fraud enforcement department, says: “Ghost brokers trick unsuspecting victims with offers of heavily discounted car insurance, leaving them with a policy that isn’t worth the paper it’s written on and open to the severe harm that comes with driving without valid insurance.
“Being able to drive is vital for a lot people, whether it be to get to work or pick up their children from school or nursery, so if they fall victim to a ghost broker it could not only impact on them financially but also seriously affect their day to day life and make things very difficult.
“As well as the personal harm experienced by victims, ghost brokers also cause financial harm to the insurance industry, driving up the cost of insurance premiums for all motorists.”
Tips for avoiding car insurance fraud
The City of London Police has issued six tips to help motorists avoid ghost broking car insurance fraud.
- 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 as using messaging apps, including Facebook, Snapchat and WhatsApp. 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.
- You can 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.