Acorn Insurance
Acorn Insurance

Ghost Broking – Motor Insurance Fraudsters

Ghost brokers are scam artists. They target  susceptible members of the public with promises of cheap car insurance regardless of their circumstances. It’s a hollow promise that leaves many stranded without insurance. In many cases victims can endure further financial hardship. The Insurance Fraud Enforcement Department (IFED), a specialist police unit dedicated to tackling insurance fraud, reported that people who fall victim to ghost brokers lose an average of £1,209. The Insurance Fraud Bureau stated that at the end of last year ghost broking accounted for a third of its ongoing cases. But how do ghost brokers get away with it? How are so many people fooled in the UK on an annual basis? Let’s look at how you can avoid becoming a victim of this crooked practice.

Ghost broker activity on the increase

In recent years the volume of cases under investigation by the Insurance Fraud Bureau has increased by more than 65%. Ghost brokers prey on the inexperienced and vulnerable with the promise of cheap car insurance. They collect their fee and leave customers stranded with no insurance cover and the potential for further costly losses. This can include fines, legal and medical costs, and additional policy purchases.

How do people become a ghost broker victim?

Ghost brokers are fraudsters taking advantage of those who either cannot afford expensive car insurance or those who may not recognise that they are illegitimate.

This may be high-risk drivers, those in financial difficulty, people who rely on their vehicle for work, or young drivers new to the insurance process.

Ghost brokers target these groups via:

  • Junk mail
  • Social media e.g. Snapchat, Facebook etc
  • Chat forums
  • Online advertisements
  • On-site marketing at locations such as pubs, clubs, newsagents, and motor repair centres

With a professional appearance and convincing industry speak, ghost brokers claim to act as an intermediary between driver and insurer, making it difficult for customers to tell the difference between them and a genuine regulated insurance company. Sadly, the consequences of such a purchase will only lead to further financial hardship with no possibility of a refund or legal recompense.

How ghost broking car insurance works

Ghost brokers operate in a variety of ways, but most commonly they will:

  • Purchase a policy from a reputable insurance company on a customer’s behalf with deliberately misleading information and then alter the documentation upon receipt to reflect the customers’ details.
  • Generate counterfeit documentation outright to sell to the unwary customer that may appear legitimate but will leave them without an insurance policy and at risk of financial and criminal penalties.

Fake policies equal real danger

As car insurance is a legal requirement in the UK being a victim of a ghost broker is the same as having no valid car insurance at all. Many customers of ghost brokers only realise they have been duped when they are pulled over by the police or find themselves needing to make a claim. The outcome of these unfortunate circumstances can be:

  • Your vehicle is seized by police, impounded, and possibly crushed
  • A fixed penalty notice of £300
  • An IN10 driving conviction (driving uninsured) with six penalty points on your licence, or a possible driving ban
  • You must buy an additional policy that will release your car from an impound
  • You will be financially liable for any damages you cause while driving uninsured. This includes compensation for any injuries and medical treatment accumulated during this time

How to protect yourself from ghost broking

To avoid becoming a victim of ghost brokers it is essential that you purchase insurance from a reputable insurance company. We at Acorn Insurance have over 30 years of experience helping people secure competitive car insurance.

Further steps to protect yourself from ghost brokers include:

  • Don’t be hasty. No matter how tempting it is to accept a cheap deal, do your research! This includes making sure the company in question has an authentic website, a UK-based telephone number and a business address
  • Contact the insurance companies directly. Don’t waste time tracking down the broker as they may already be untraceable and moving onto their next victim
  • Check to see if an insurer or broker is regulated by visiting the Financial Conduct Authority
  • Visit the Motor Insurance Database (MID) website to check your vehicle is insured and verify that your insurance provider has your correct details on file

Report the fraud

Insurance fraud is not a victimless crime. Ghost brokers unlawful practices drive the cost of insurance up, funds wider criminal activity, and makes the roads more dangerous for us all. By reporting suspected ghost broking activity, you can help the police and regulators bring them to justice.

If you have been a victim of ghost broking or have information regarding ghost brokers, you can report it to Action Fraud, the national fraud and cybercrime reporting centre, on 0300 123 2040. If you are in Scotland, contact Police Scotland on 101.

You can also call the Insurance Fraud Bureau via its free-to call confidential Cheatline powered by Crimestoppers on 0800 422 0421.

The information you provide will only be used to help detect and prevent fraud and is a vital ingredient in the fight against fraud.