If you haven’t already heard the term ‘ghost broking’ in the news then you need to be aware of the increasing trend of scammers targeting UK drivers. Last year alone the BBC* reported that over 26 cases of large scale operations were being investigated for ghost broking.
These scam artists are selling bogus car insurance to motorists desperate to cut car motor policy costs. They are touting for business in pubs, clubs and sometimes newsagents and even on social media. By posing as legitimate insurance intermediaries offering policies at a significantly reduced rate, they are able to hoodwink susceptible motorists who are looking at ways to reduce their insurance costs.
This unscrupulous practice is also highly lucrative. In October 2015 a car rental firm owner was jailed for two years after making £65,000 from selling invalid car insurance to unsuspecting clients.** By defrauding a leading insurer using different aliases he was able to obtain short term policies which he then altered the details and sold on. The policies were rendered invalid due to the misinformation given to the insurer, leaving the victim without any insurance.
What to look out for
A ghost broker will operate using these main tactics:
- Creating a false policy by copying a genuine one.
- Taking out a genuine policy but then cancelling it without telling the customer and pocketing the refund.
- Purchasing a legitimate policy but falsifying some of the information, such as driver age or vehicle, to pay lower premiums.
If a genuine policy is purchased fraudulently then it is rendered invalid, meaning ghost broker victims are unknowingly driving without valid insurance.
Those unfortunate enough to fall prey to a ghost broker will not only lose their money but will also risk a criminal record. If the authorities believe you were aware that the policy was being sold illegally you could be arrested for fraud. Therefore, if you suspect fraud, report it immediately. Make sure to only do business with a reputable broker. Find a list of every authorised UK insurance firm at the Motor Insurers’ Bureau website, www.mib.org.uk. Verify that your vehicle or someone else’s is covered by searching the Motor Insurance Database, located at www.askmid.com.
* http://www.bbc.co.uk/news/business-33909656
** https://www.cityoflondon.police.uk/advice-and-support/fraud-and-economic-crime/ifed/ifed-news/Pages/BUSINESSMAN-WHO-MADE-%C2%A365K-SELLING-INVALID-CAR-INSURANCE-JAILED.aspx
Source: Zywave
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