Thousands of people could be unwittingly without insurance because of fraudsters known as "ghost brokers" selling fake policies, police have warned.
Police have received more than 850 reports of the scam in the last three years, with victims losing an estimated total of £631,000, according to City of London officers. However figures show that the actual number of victims could be much higher as individuals are often unaware their policy is invalid.
Tactics used by "ghost brokers" include taking out a genuine insurance policy before quickly cancelling it and claiming the refund plus the victim's money.
They also forge insurance documents or falsify a driver's details to bring the price down, police said. Individuals aged in their 20s are most likely to be targeted, with "ghost brokers" often contacting victims on social media including Facebook, Instagram, Snapchat and WhatsApp, by offering “premium much cheaper than other company’s” and “being able to save their customers hundreds of pounds”.
These fraudsters also advertise on student websites or money-saving forums, university notice boards and marketplace websites and may sell insurance policies in pubs, clubs or bars, newsagents and car repair shops.
A national campaign is now been launched to warn customers, in particular drivers, to be wary of heavily discounted policies on the internet or cheap insurance prices that are offered directly.
On average, drivers duped into buying fake car insurance hand over £769. With fraudsters supplying forged documentation to the customer, many customers won’t realise that they have been tricked, meaning they could be driving without valid insurance – which can incur a £300 fine and six penalty points, or result in the car being seized and crushed. Some victims only realise they do not have genuine cover when they are stopped by the police or try to make an insurance claim after an accident. City of London Police warns the true number of ghost broking victims may be much higher than current figures for known cases.
Police have taken action in 417 cases linked to "ghost broking" in the last three years, including one man who set up 133 fake policies and another man who earned £59,000 from the scam.
Detective Chief Inspector Andy Fyfe, Head of the City of London Police’s Insurance Fraud Enforcement Department, said: “Ghost brokers trick unsuspecting victims with offers of heavily discounted car insurance, leaving them with a policy that isn’t worth the paper it’s written on and open to the severe harm that comes with driving without valid insurance. Being able to drive is vital for a lot people, whether it be to get to work or pick up their children from school or nursery, so if they fall victim to a ghost broker it could not only impact on them financially but also seriously affect their day to day life.”
If you need insurance or your renewal is coming up speak to a company you can trust, contact Be Wiser Business Insurance on 0333 999 0802 for a quote or visit our website bewiserbusinessinsurance.co.uk.
For more information about Ghost Scamming visit www.insurancefraudbureau.org/insurance-fraud/ghost-brokers