Unsuspecting drivers may think they’ve bagged a bargain on their car insurance as prices have rocketed, but they may have been duped by a ‘ghost broker’. Here are the red flags to watch out for.
Fraud cases have more than doubled since the pandemic, with 21,149 fraud and cybercrime offences reported to the National Fraud Intelligence Bureau (NFIB) between April 2022 and March 2023.
‘Ghost broking’ is one of the most prevalent types of fraud when it comes to car insurance.
Fake motor insurance deals, or ghost broking scams, involve criminals pretending to be brokers in a bid to offer unsuspecting drivers cheap policies. But they’re entirely fake and mean people are left out of pocket and are driving without valid insurance.
Victims can face criminal charges for driving without valid insurance as well as a fine, penalty points, and potential vehicle seizure.
Ghost brokers can also pose a cyber threat as they harvest the victim’s personal information to take out policies under the names of individuals – such as experienced older drivers who usually have cheaper insurance – in order to forge and sell on policies in other people’s names.
These crimes often go unreported, with just two out five (43%) of fraud victims reporting the crime to the authorities. Indeed, only 7.5% of cybercrime victims reported the fraud between April 2022 and 2023.
In a bid to help motorists spot the signs and report insurance fraud, One Sure Insurance has revealed top tips to ensure you’re not haunted by a ‘ghost broker’ online:
Unbelievable fake bargains
Ghost brokers lure you in with too-good-to-be-true deals. If an insurance quote seems unrealistically cheap, it probably isn’t genuine.
According to the Association of British Insurers (ABI), the average price of car insurance in the three months to June surged to a record high of £511.
Social media and WhatsApp
Fraudsters and ghost brokers often operate through social media platforms or WhatsApp. They usually don’t have a professional website or contact information beyond just mobile numbers.
If you can’t see a legitimate website or business phone number, then it’s a major red flag.
No FCA authorisation
Real insurance brokers are authorised by the Financial Conduct Authority (FCA). Insurers and brokers will clearly show this information on their websites. Ghost brokers will not be traceable on the FCA’s register.
If you still have a gut feeling you’re talking to a scammer, double-check the FCA database online via its official website.
Dodgy documents
Be wary of blurry or unprofessional-looking policy documents. Authentic insurance providers produce high-quality records and documents without wonky fonts, pixelated images, and spelling and grammar errors.
How to report insurance fraud
If you think you may have spotted an insurance scam online or suspect you’ve been sold a fraudulent policy, contact your insurer and report it immediately to:
- The Insurance Fraud Bureau (IFB) CheatLine
0800 422 0421
- Action Fraud, The National Fraud & Cyber Crime Reporting Centre or call 0300 123 2040.
