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Ghost broker warning for drivers

Written by: Emma Lunn
Motorists who buy a car insurance policy from a so-called ‘ghost broker’ could be left uninsured - risking a driving ban and a criminal record.

Insurer LV= says ghost broker fraud has increased by 66% in the past two years, with nine in 10 drivers unfamiliar with what ghost broking means.

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. Victims face serious consequences if they drive without insurance, including being disqualified from driving or getting a criminal record.

LV= found that  44% of adults don’t know how to check if an insurer or broker is regulated. When made aware of what ghost broking is, half (49%) didn’t feel confident or were unsure they’d be able to spot it.

LV= is currently investigating 20 organised fraud inquiries linked to ghost broking and policy fraud, equating to £2m in value. 

Worryingly a fifth (22%) of those questioned said they would trust an online marketplace or social media company to buy insurance. 

Nearly six in ten (58%) of those aged under 25 had no idea how to check if an insurer or broker is regulated, with this age group most likely to be targeted on social media sites by a ghost broker. 

Claims farming was also identified as a fraud type that nine in 10 (91%) people are unfamiliar with. This is when a person or business such as a claims management company will encourage someone to make a false or exaggerated claim to make money – usually a personal injury claim – after a car accident. 

Nearly half (47%) stated they weren’t confident or were unsure to spot or prevent this type of fraud, with one in 10 (10%) admitting they’d been targeted or fallen victim in the past.

According to the data, a fifth (19%) of adults wouldn’t know how to go about reporting insurance fraud if they fell victim. This rises to a third (31%) for those aged between 18 and 24. 

Matt Crabtree, head of fraud strategy at LV=, said: “We’ve been cracking down on ghost broking, intercepting much more activity as fraudsters increase their online presence. What’s encouraging is as a result of working to identify those behind the crime we’ve seen a decline in the number of fake policies taken out with us. However, this research highlights there is still more to do to help consumers understand insurance fraud, especially ghost broking and we’re committed to doing just that.

“There are many different types of insurance fraud which can be a little daunting, however checking out the emerging trends and top tips will help us all become much more confident to spot and stop it. We also continue to invest and update our systems and controls to help protect genuine customers and encourage anyone to report suspicious activity to the Insurance Fraud Bureau Cheatline.”

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