Drive away from the ‘ghost’ insurance scams
A new awareness campaign is warning drivers about fraudsters who sell fake car insurance. Vicky Shaw investigates how to avoid becoming a victim of such scams
A new campaign is being launched to raise the nation’s awareness about “ghost brokers” - fraudsters whose ghoulish practices target drivers with insurance policies that are not worth the paper they’re written on.
These ‘fake’ policies leave people exposed to the risk of driving without valid car insurance, which in turn leads to the risk of having your car seized by police, being issued with fines and other penalties, and getting a criminal record.
Ghost brokers scan social websites or other ‘target market’ forums - some well-organised scams may even run their own websites, or target people in person at roadside cafes.
Their prey are those who are paying the highest insurance premiums, which tends to be new drivers, often young men, hard-up students, people who may have recently arrived from overseas and speak little English and drivers with convictions.
The ghost brokers offer them “cheap”, no-quibble deals which seem like a dream come true.
The truth, of course, is another nightmarish story.
The policies they are selling are typically bought from legitimate providers, but with altered details and false contact information for the customer.
They may be paid for using false or stolen credit or debit cards, sometimes issued by overseas banks, while the buyer may be asked to pay cash.
The new campaign to stop them is a combined effort by the police and the insurance industry, both who are becoming increasingly concerned about the dangers of ghost-broking. The main focus of the campaign is a video - found at www.getarealdeal.co.uk - which has been released on social media sites.
The City of London Police unit dedicated to tackling insurance fraud nationwide, the Insurance Fraud Enforcement Department (IFED), worked with the Insurance Fraud Bureau (IFB) and Crimestoppers to produce the video, which calls on motorists to use common sense when buying insurance and be wary of deals that seem too good to be true.
AA Insurance adds that its own fraud team blocks up to a dozen attempts to obtain car insurance by suspected “ghost brokers” every day.
Simon Douglas, director of AA Insurance, says: “At a time when car insurance has become fiercely competitive, this is a very nasty type of insurance scam that fleeces vulnerable individuals and leaves them with useless car insurance.
“Ghost brokers tend to be IT literate and understand the insurance industry well.”
Douglas says that common tactics used by ghost brokers include guarantees to undercut any policy by a significant percentage or fixed-price policies through a reputable company such as the AA.
Sometimes these fraudsters will only provide a mobile telephone number and will be unwilling to offer contact details for the insurance company with whom the business is being placed, Douglas explains.
He says that if a policy is significantly cheaper than polices available elsewhere, or direct from the insurer’s website, it may well not be legitimate. Douglas adds: “No one knows how many policies that appear legitimate are ghosted. When they do come to light, the ‘broker’ will have disappeared into thin air.
Their customers are left with insurance cover that is no more than an apparition.
“Often the victims are landed with convictions for uninsured driving and their cars confiscated by police.”
So how do you avoid falling victim to a ghost broker?
If you have any doubts about the source you are buying from, make sure you check with an industry body such as the British Insurance Brokers Association; British Insurance Brokers’ Association or the Motor Insurers’ Bureau.
Bear in mind that if the price looks too good to be true it probably is.
Treat adverts that provide only email or mobile phone contact with suspicion.
If you suspect you’re a victim, check www.askMID.com to see if your car is registered as being insured.
If it is, check again from time to time because once an insurer realises the policy has been fraudulently obtained, it will be cancelled.
If you suspect you are a ghost broking victim, check with the company whose name is on the insurance certificate and contact Crimestoppers on 0800 555111.