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Warning over Black Friday insurance scams

Joanna Faith
Written By:
Joanna Faith

Black Friday bargain hunters are not just being warned about fake goods, they’re also being urged to look out for bogus insurance deals.

The Insurance Fraud Bureau (IFB), which works with UK police to investigate insurance fraud, says fraudsters could try to exploit the shopping bonanza event on Friday with fake car insurance offers.

So-called ‘ghost brokers’ pose as legitimate insurance brokers and sell forged or invalid car insurance policies to unsuspecting drivers, who are lured by very cheap, too-good-to-be-true premiums.

They often use online ads and social media such as Facebook and Instagram to coax in their victims.

According to the City of London Police, the average person loses £769 when taking out a fraudulent motor insurance policy from a ‘ghost broker’.

Last month, Action Fraud warned that people aged 17 to 24, especially men, were most likely to fall victim to this type of scam because they have less experience buying insurance, are more likely to have tighter budgets, and are more likely to use social media.

“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,” said Detective Chief Inspector Andy Fyfe of the City of London.

“It’s a legal obligation to have valid car insurance, and if you’re caught by police without it you could face the following; 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.”

 ‘Ghost broker’ warning signs

  • Be wary of unsolicited calls from insurance brokers – authorised firms are unlikely to contact you out of the blue;
  • Be cautious of being approached by brokers in unconventional ways such as on social media, by brokers selling car insurance in pubs or through adverts in newsagents or universities;
  • Be wary of brokers who only provide scant contact details (e.g. DM only on social media or mobile phone), check to see if they have an office address and landline telephone;
  • Check the broker firm is on the Financial Services Register and authorised by the Financial Conduct Authority or the British Brokers’ Association;
  • If you suspect that you have been contacted by a ghost broker, or have fallen victim to an insurance fraud, you can report it to Action Fraud at police.uk / 0300 123 2040 or to the Insurance Fraud Bureau’s Cheatline at insurancefraudbureau.org/cheatline / 0800 422 0421