The old saying really does run true, if it sounds too good to be true…it probably is. This won’t stop many people from falling for the tricks of insurance fraudsters. Currently, the horror of ghost broking is estimated to affect around a million drivers. As specialist commercial vehicle insurance providers, we want to make you aware of what ghost broking is and give you the tools to become a ghost broker buster!
What is ghost broking?
Ghost broking is the act of fake insurance brokers or “ghost brokers” selling fraudulent and invalid insurance to unsuspecting members of the public.
How does ghost broking work?
Ghost brokers have several sophisticated scams, with the most common including:
- Forging documents – The ghost broker will pretend to be an affiliate of a legitimate insurance company and sell you a fake policy. They’ll forge documents such as a certificate of motor insurance or a cover note, leading the victim to believe they’re legitimately covered.
- Invalid Insurance – Ghost brokers will often falsify the victim’s details making the policy cheaper but invalid. They can do this through amending details such as the driver’s age, address/postcode and driving experience/No Claims Discount.
- Cancelling the policy – The ghost broker can take out a genuine policy and cancel it shortly after to claim the refund for themselves whilst leaving you uninsured.
Who is at most risk from ghost broking?
The IFED reports that men aged 20-29 are most likely to be targeted by ghost brokers. If you’re looking to save a bit of money, then often your insurance is the first place you’ll look when it comes to renewing. The fraudsters know this and offer cheap but fake insurance policies that are invalid and will cost you more in the long run.
How could ghost broking affect you financially?
It’s your legal obligation to ensure your vehicle is covered with valid insurance. An invalid policy or no insurance at all will mean you’re not only breaking the law but this will often involve huge financial implications, with victims of ghost broking losing an average of £769.
You could be affected with:
- A fixed penalty of £300.
- 6 penalty points on your licence.
- Becoming accountable for claims costs if you’re involved in an accident. This could include damage to the other driver’s vehicle and costs related to their health.
- Your vehicle being seized by the police costing you £150 to get it back.
How to spot a ghost broker
Here’s some of the platforms and methods that ghost brokers utilise to target their victims:
- Social Media – Ghost brokers often advertise on sites such as Instagram and Facebook with a mobile number for you to call, so look out for this.
- Forums – They’re also well known to target those with a tight budget, advertising on money-saving blogs, marketplace websites and even university notice boards.
- Messaging apps – Ghost brokers don’t want to be tracked once they’ve got your money and often use encrypted messenger apps such as Whatsapp, Snapchat and Facebook messenger.
- Contact details – They’ll often provide a mobile number or email as the only way to communicate so be cautious of those.
How to avoid becoming a victim of ghost broking
Ghost broking scams clearly aren’t going away with reports indicating a 14% rise over the past year. That low initial price can really cost you in the long run, so if it sounds too good to be true, the reality is that it probably is. You can also avoid becoming a victim by:
- Checking whether the insurer is authorised under the Financial Conduct Authority.
- Ensuring that the insurer is registered with the British Insurance Brokers’ Association.
- Finally, by checking that you’re legitimately insured on the motor insurance database.
With the ghost broking scam on the rise, it really does pay to do your research and ensure that you “ain’t afraid of no ghost broker”.