Drivers have been urged not to fall for bogus car insurance deals being offered on social media as fraud investigators report a doubling of cases.
The Insurance Fraud Bureau (IFB) is warning consumers to avoid buying “too good to be true” insurance packages from “ghost brokers” following concerns fraudsters may try to exploit the Black Friday shopping event to lure in victims.
With an increase in online sales driven by the big shopping event and a number of car insurance deals appearing online, consumers are being reminded to ensure they don’t take risks and carry out proper checks before making a purchase.
The insurance industry’s fraud intelligence hub says it is dealing with twice as many investigations into ghost broking as it was four years ago as criminals target young drivers and vulnerable communities.
Not worth the paper it’s written on
Stephen Dalton, head of intelligence and investigations at IFB said: “An enticing offer might seem like a great way to save money but the reality is if you don’t do basic checks to know that you’re buying car insurance from a genuine broker, your ‘policy’ may be worth no more than the paper it’s written on.”
Ghost brokers are con artists who pose as genuine insurance brokers and offer unrealistically cheap policies. They are known to offer illegal broker services via online adverts and social media channels such as Facebook and Instagram and tend to target younger people and vulnerable communities who struggle to find affordable insurance.
While they claim to offer cover at substantially lower prices than other providers, they don’t actually provide any insurance. They usually provide fake or doctored policy documents which are worthless and leave motorists out of pocket and driving without valid insurance.
Read more: Nine ways to reduce your car insurance costs
According to the City of London Police’s Insurance Fraud Enforcement Department (IFED) the average person loses around £769 when taking out a fraudulent policy from a ghost broker.
Fine and a ban
Detective Chief Inspector Andy Fyfe, head of the IFED warns: “Ghost brokers leave victims with a policy that isn’t worth the paper it’s written on and open to the severe consequences that comes with driving without valid insurance. It’s a legal obligation to have valid car insurance, and if you’re caught by police without it you could face points on your driving licence, a fixed penalty notice, having your vehicle seized and possibly destroyed, and being liable for claims costs if involved in an accident.”
“While an offer of cheap car insurance may seem tempting, falling victim to ghost broking will end up costing you far more in the long run.”
How to spot a ghost broker
The IFB has issue tips on how to make sure you’re dealing with a legitimate broker.
- Check the seller is registered with the British Insurance Brokers’ Association (BIBA). If buying directly through an insurer they should appear as a registered member of the Motor Insurers’ Bureau (MIB). Checks can also be made to see Insurance Advisors are registered with the Financial Conduct Authority (FCA).
- Check that the seller has a legitimate website, a UK phone number and address and to look out for any behaviour that may seem out of the ordinary
- Remember if the price looks too good to be true, it probably is
- Members of the public can report suspected insurance fraud via IFB’s Cheatline service through a confidential phoneline that is powered by Crimestoppers on 0800 422 0421 or insurance fraud can be reported online on the IFB’s website.