Britons are being warned of a surge in “ghost brokers” taking to the internet to offer fraudulent insurance policies.
With Google seeing around 2,600 queries on the scam a month, analysts at Dayinsure delved into the “crucial facts” about the fraudulent policies, including tips for those most at risk to avoid buying into one.
Ryan Anderson, fraud analyst at Dayinsure said: “Unfortunately, there has been an increasing number of reports of ghost broking circulating in the UK. It is important to be aware of these scams to prevent the repercussions of driving without insurance.
“But what is it? Ghost broking is a form of scam. The scammers will pose as an insurance broker or insurance company to encourage you to take out a policy, usually at a heavily discounted price.”
The scammers operate by either purchasing a legitimate policy and tampering with the information to resell to multiple drivers or they can create completely false documents.
Mr Anderson said: “The most crucial fact about this scam is that it will give you an invalid insurance policy and you will legally be viewed as having no insurance. Therefore, authorities will treat you as an uninsured driver.
“This means that in the event of a claim or a police check, you will suffer the same ramifications as an uninsured driver.”
Mr Anderson stressed the importance for those “at higher risk” to be vigilant, as according to the fraud analyst, people are more likely to be targeted if they have particularly higher premiums.
This can include having a low no-claims bonus, having been involved in an accident, or if they haven’t been driving very long.
Mr Anderson said: “They also often prey on vulnerable people such as younger drivers, or anybody who is new to the country and hasn’t had UK car insurance before.”
Using social media, scammers will pull people in with attractive prices and quotes that state the offer is “too good to be true”.
However, Mr Anderson noted: “No policy should ever be taken out over WhatsApp, TikTok, Facebook or any other social media platform.
“Please always check with the insurer to make sure the policy is legitimate and report any scamming activity.”
To avoid falling victim to a ghost-broking scam, Mr Anderson shared some quick-fire tips.
- Check insurers’ advisors are registered with the Financial Conduct Authority (FCA)
- Those buying directly from an insurer can confirm they are a member of the Motor Insurers’ Bureau (MIB, as well as validate the underwriter on the policy.
- People can also check the MID for a valid insurance policy on the vehicle here. However, companies do have 14 days to upload the record so the cover may not show immediately.
- People can also report all scams to the Insurance Fraud Bureau (IFB).
