As the cost of running a vehicle continues to rise, drivers understandably want to shop around for the best deal.
While many can receive discounts from insurers and insurance brokers through special offers or as a reward for an unblemished driving record, criminals are cashing in on the cost-of-living crisis — and the consequences for motorists they snare can be severe.
What is a ghost broker?
Ghost brokers are fraudsters who pose as insurance brokers and offer fake or misrepresented insurance policies, taking money from people who genuinely believe they are insured to drive.
Their victims include young drivers who are considered a higher risk and face steeper premiums, as well as businesses and professional drivers who are trying to manage the cost of their taxi insurance, fleet insurance, chauffeur insurance and motor trade insurance.
Aviva told the BBC that ghost brokering “was up more than 4% year-on-year and by 22% over the past two years, with young drivers aged 17 to 25 the primary target”.
It added that one suspected ghost broker had made £150,000 selling fake policies to young drivers.
How does ghost broking work?
The Insurance Fraud Bureau warns that these fake policies are either forgeries or have been bought from legitimate insurance providers using false details and altered before being sold on to unwitting drivers.
They advertise cheap cover, offering huge discounts for insurance, with some drivers being promised savings worth thousands of pounds.
When unsuspecting drivers make contact, the ghost brokers appear genuine and ask for details they would expect to give to a legitimate broker.
Once payment has been received, “documents” are sent to unsuspecting drivers who believe they are covered.
Common signs of a ghost broking scam
Ghost brokers mainly share their offers on social media platforms, where it is easier to remain anonymous.
While some might set up fake websites to add to their credibility, others might include links to genuine insurers, although the discounted offer is only available using the contact details or links on the ad.
Ghost brokers ask for payment via bank transfer to an account – which is likely to have been set up using false details – instead of using direct debit or bank cards, making it more difficult to trace and for money to be returned.
The risks of ghost broking
As Admiral warns, the consequences for drivers are severe. While you might believe you are covered, the policy is invalid and you wouldn’t be able to claim for damage or losses.
What is worse is that you are guilty of driving without insurance, which can result in police seizing your car, points on your licence as well as a fine, and being responsible for any damage caused. This could include hefty compensation claim if someone is injured in an accident.
Drivers will then have to take out a genuine policy to get back on the road – and have to declare conviction for driving without insurance, which is likely to push up premiums.
How to protect yourself from ghost brokers
To avoid buying a fake policy, Admiral recommends finding a legitimate broker on British Insurance Brokers’ Association website. It also recommends checking the broker is registered with the Financial Conduct Authority (FCA).
While genuine insurers and brokers do advertise on social media sites, drivers are urged to contact the insurer directly for confirmation or visit the FCA website to verify that it is legitimate.
It also recommends checking that an insurance provider is a Motor Insurers’ Bureau (MIB) member, as well as making sure your vehicle is insured and registered on the Motor Insurance Database.
If you suspect a ghost broker is trying to contact you, call the IFB bureau on 0800 422 0421.
Ghost brokers are criminals who are only interested in one thing – taking your money. Not only does the scam leave you out of pocket, it can have severe consequences for professional drivers.
As Police Service of Northern Ireland Insp Ian Ferriby told the BBC after a recent case, scammers can be very convincing and “motorists should always be wary of deals which seem too good to be true”.
