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Watch out for fraudsters selling fake car insurance on social media, warns the industry body the Insurance Fraud Bureau (IFB). It say 21,169 fraudulent motor insurance policies were reported to it by insurers in the past 12 months which could be linked to the scam.
The IFB describes ‘Ghost Broking’ as a growing scam. Fraudsters pretend to be insurance brokers, to sell unrealistically cheap – and completely fake – policies. The bogus deals are often advertised via Facebook and Instagram. The victims may be young and new drivers, or those less familiar with UK insurance laws. The scam not only leaves victims out of pocket, but facing legal penalties for driving without insurance.
The IFB acts as a central intelligence hub for insurers to tackle organised fraud. Stephen Dalton, Head of Intelligence and Investigations at the IFB, said: “Clearly, fraudsters are attempting to take out a high volume of fraudulent car insurance policies so they can profit at the expense of insurers and honest consumers. This is a serious problem and I believe the figures we’ve identified only begin to scratch the surface.
“With police forces upping their efforts to crackdown on uninsured driving, it’s essential that consumers aren’t tempted by ‘too good to be true’ car insurance deals on social media. They’re entirely fake and will result in the driver’s vehicle being seized for no insurance.
“If anyone has seen evidence of a suspicious motor insurance deal, it should be reported to our confidential Cheatline on 0800 422 0421 or at www.insurancefraudbureau.org.”
Ghost brokers operate by tempting victims with unrealistically cheap prices up front, despite the fact insurance is meant to be priced based on the risk of a driver. Once they’ve caught their victim’s attention, they’ll encourage contact through end-to-end encrypted messaging software such as WhatsApp to keep dealings private.
The IFB reports that has seen its percentage of investigations into ‘Ghost Broking’ double in recent years and believes tens of thousands of motorists could unwittingly be driving with fraudulent cover.
Consumers are urged to only purchase car insurance through reputable sellers. If buying through a broker they should check the seller is registered with the British Insurance brokers’ Association (BIBA). If buying directly through an insurer they should appear as a registered member of the Motor Insurers’ Bureau (MIB). Checks can also be made to see Insurance Advisors are registered with the Financial Conduct Authority (FCA).
Anyone with evidence of an insurance scam should report it to the police and the IFB’s confidential Cheatline; online or via a phoneline (powered by Crimestoppers) on 0800 422 0421. Insurance fraud reports can also be submitted to Action Fraud.
Photo by Mark Rowe; street art, Glasgow city centre.