Guide to Ghost Brokers: Car Insurance Fraud Uncovered

car insurance fraud Ghost brokers are back in the headlines as police launch a national campaign to warn motorists about car insurance policies that go bump in the night. Ghost brokers are fraudsters who sell phantom insurance policies that are nothing more than an illusion, and the really scary thing is that victims often don’t know they’ve been duped.

The Insurance Fraud Department is urging motorists to Steer Clear of Fraud with a campaign that’s designed to shine a light on the growing problem of ghost broking. In the past three years they’ve received over 850 reports of ghost broking, but the problem is likely to me much bigger with one leading motoring organisation claiming it costs the industry ‘tens of millions of pounds a year’.

What is ghost broking?

Ghost broking is a type of fraud where unsuspecting motorists are sold bogus insurance and get a nasty shock when they find the policy isn’t worth the paper it’s written on. Victims are often completely in the dark until they are stopped by the police or it comes to making an insurance claim. Ghost broking is nothing new, but the fraudsters are learning new tricks, and their scams are getting more sophisticated.

What are consequences of ghost broking?

Ghost broking isn’t a victimless crime and the consequences can be catastrophic. Motorists caught without valid insurance could face a fixed £300 fine and six penalty points on their licence. To make matters worse they won’t be able to make any claims and could be financially liable if involved in an ‘at fault’ accident. The financial fallout takes its toll on the wider society with fraud driving-up premiums across the board and law-abiding motorists paying the price.

What are the mechanics of ghost broking?

Bogus brokers are always dreaming-up new ways of defrauding unwitting motorists although the scams typically work in one of three ways:

Forged Documents The fraudster produces fake documentation for a policy that has never existed.

Quick Cancellation The fraudster takes out a valid insurance policy and then cancels and pockets the refund.

Doctored Details The fraudster falsifies personal details to get cheaper cover and then doctors the paperwork before handing it over to the victim.

How can I spot a ghost insurance broker?

Suspicious Minds There’s a saying that ‘if it seems too good to be true it probably is’ and promises of rock-bottom premiums should get the alarm bells ringing. However, fraudsters are quick learners and typically offer 20-30% discounts so they don’t scare-away potential targets. Be suspicious and don’t think you are too smart to be scammed.

Trusted Sources Fraudsters are increasingly using modern technology and motorists are being urged to steer clear of any ‘deals’ they find via social media, messaging apps and online marketplaces. Similarly adverts placed in local newspapers and newsagent’s windows should be given a wide berth.

Check Credentials Don’t be fooled by first impressions and take a few moments to make sure that your broker is registered with the Financial Conduct Authority (FCA). You can also check whether your vehicle is insured on the Motor Insurance Database (MID) which will weed-out some scams but not necessarily ones where the fraudsters later cancel cover.

Contact Counts Criminals don’t want to get caught and often hide behind a phone number without providing a bricks and mortar address. Be wary of cold calls and make sure your broker has a registered physical address with Companies House. It’s also a good idea to ask for a written quote before committing to anything.

Easy Targets Fraudsters aren’t particularly picky about who they scam but tend to target individuals who have difficulty finding affordable insurance (such as motorists with a criminal record or who have just passed their test). Recent findings revealed that victims paid an average of £796 for bogus cover and were most likely to be men aged 20-30.

How can I report a ghost broker?

Insurers and police are working overtime to stamp-out fraud and depend on public help. If you suspect that you have been a victim of car insurance fraud, please file a report via the Insurance Fraud Bureau’s cheatline or Tel: 0800 422 0421.

If you are looking for sensibly-priced car insurance from a broker you can really trust visit Quoteline Direct. With nearly 50 years’ experience and access to some seriously competitive policies you’ll have to go a long way to find a better deal.


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