Protect yourself from insurance scams

It can’t just be us noticing that scams seem to be getting more regular and worse. Phone calls, texts, emails from the supposed likes of Amazon, the Post Office, and various delivery companies are one thing but now we hear of more terrible scams.

This week Trading Standards got in touch with us to tell us about another scam – this time to do with your insurance. Believe it or not, yesterday I received two phone calls, both scams. The first asked me about online trading and the second one pretending to be an insurance broker. Interestingly, the second call was timed perfectly as I had been talking to a previous insurance company. I could have been taken in because of what was being said. Luckily, I have wised up to these phone calls and I ended it.

Ghost brokers

I have never heard of ghost brokers and according to Neighbourhood Alert, only 15% of us have. 

Basically, a ghost broker is someone who is committing fraud by trying to sell fake or invalid insurance policies. As a victim of this crime, you will be sold fake documents for a policy that in reality does not exist. You could also be sold a genuine policy that was set up using false details to lower the price of the premium. These are scams.

There’s a reason why it’s cheap

When we hear the word cheap, especially at the moment, we are often taken in by the hope of saving a few vital pennies. Unfortunately, these people or groups are posing as representatives for well-known insurance companies. They get often make contact through social media or even word-of-mouth, offering supposedly legitimate car insurance at a really cheap price.

In reality, these so-called brokers will either:

  • forge insurance documents
  • falsify your details to bring the price down
  • or they take out a genuine policy but cancel it soon after

How you find out it’s a scam

Scarily, you probably won’t even realise what the scammer has done, that is until you are involved in an accident and try to claim on the policy.

The problem is made worse because these people are targeting the more vulnerable members of the community. This includes young people looking for cheaper deals and people from non-English speaking communities. However, they may not be the only ones who get caught out.

Shocking stats

Last year Action Fraud received ghost broking complaints that amounted to:

  • 694 ghost broking reports
  • 29% came from victims aged 17-29
  • Victims lost a total of £113,500
  • Average loss was £559
  • Men submitted 58% of the reports in 2020

The risks

The worst part is that these ghost-brokers policies are either invalid, non-existent or fraudulent. In plain speak this means you are technically not insured. If stopped or you have an accident your risks are:

  • £300 fixed penalty notice
  • Six points on your driving licence
  • Your vehicle being seized and crushed

Protect yourself

Don’t let these scammers take advantage. Follow the steps set out by Neighbourhood Alert to spot any risks:

  • Social Media – ‘Ghost brokers’ often advertise and communicate via social media, online forums and messaging apps. If a broker is only using a mobile phone or email as a way of contact, this can be a sign of this type of crime. Fraudsters do not want to be traced after they have taken money from their victims.
  • Print – They may also try to sell insurance policies through print adverts in pubs, clubs or bars, newsagents
  • Too Good to Be True – If a deal seems too good to be true, then it probably is. If you are not sure about the broker, check on the Financial Conduct Authority or the British Insurance Brokers’ Association website for a list of all authorised insurance brokers. You can also contact the insurance company directly to verify the broker’s details. You can also check to see if a car appears to be insured on the Motor Insurance Database website.

What to do if you are a victim

If you think that you have been a victim of a ghost broker, you can report your concerns to Action Fraud at Action Fraud – Police UK or on 0300 123 2040.

You can also contact the Insurance Fraud Bureau via its confidential Cheatline on 0800 422 0421 or on the IFB website.