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Ghost broker social media warning

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Written by: Emma Lunn
09/06/2020
Drivers warned about “too good to be true” car insurance deals advertised online.

Motorists could be driving uninsured after buying ‘cheap’ car insurance via social media scammers, according to GoCompare.

The price comparison site is warning drivers about fraudsters, known as “ghost brokers”, targeting cash-strapped drivers with fake car insurance.

Ghost broker is the name given to a scammer who pretends to be a legitimate insurance broker to sell forged or invalid car insurance policies to unsuspecting drivers.

Unsuspecting victims face serious consequences including being disqualified from driving or a criminal record.

The warning comes after City of London Police arrested a man for selling fraudulent car insurance online and targeting NHS workers with discounts.

Ghost brokers typically defraud victims in one of four ways:

  • Asking for an upfront “arrangement fee”
  • Forging insurance documents
  • Manipulating the customer’s details to lower the premium
  • Using the genuine identity of an unauthorised third-party to set a policy up, and in some cases cancelling the policy soon after to pocket the refund on top of the victim’s fee

Victims are usually unaware they don’t have genuine cover until they submit a claim following an accident or are stopped by the police for driving without insurance.

While the police may be sympathetic to victims of ghost brokers, the consequences of buying fake insurance can be the same as driving uninsured. Victims will still be deemed to be driving illegally and left liable for any claims.

The minimum sanctions for uninsured driving include a £300 fine, six penalty points and, the risk of having your car seized by the police.  Newly qualified drivers receiving six penalty points within the first two years of passing their test will have their licence revoked.

Drivers will also be required to buy a valid policy and may find that they face higher premiums in the future.

Lee Griffin, founder and CEO of GoCompare, says: “Lockdown restrictions have left many people struggling on reduced incomes, making them more vulnerable to fraudsters offering enticing deals. It’s obvious from the recent arrest of a suspected ghost broker who has allegedly targeted NHS workers, that fraudsters don’t have any scruples about who they rip-off. The cost of car insurance can be a significant expense, especially for young or inexperience drivers, or those struggling to make ends meet, which makes them soft targets for criminals.

“We’re warning drivers to be extremely suspicious of cheap insurance advertised on social media or websites, especially where the deal on offer looks too good to be true. This is usually because it is. Being aware that criminals are exploiting drivers desperate to save money and, knowing the warning signs of ghost broking scams, can help people from falling victim.

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