Ghost Broking – What It Is And How To Avoid It.

As the old saying goes, 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 a specialist commercial insurance broker, we want to educate you about ghost broking 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 by amending details such as the driver’s age, address/postcode, driving experience, and 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?

When people are looking to save a bit of money, often they try to cut back their outgoings by looking for a cheaper premium when it’s time to renew their insurance. The fraudsters know this and offer cheap but fake insurance policies that are invalid and will cost you more in the long run.

The IFED reports that ghost brokers are most likely to target men aged 20-29. However, it’s important to remember that anyone can fall prey to a ghost broker.

Recently, these types of fraudsters have been taking advantage of young drivers looking for cheaper premiums as well as foreign UK residents who have just moved these shores.

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 will mean you’re not only breaking the law but will often involve substantial financial implications, with ghost broking victims losing an average of £769.

You could be affected with:

• A fixed penalty of £300.
• Six 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 expenses 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 are 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 for targeting 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, so they 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 aren’t going away, with reports indicating a 14% rise over the past year. That low initial price can 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 ghost broking scams on the rise, it really does pay to do your research and ensure that you “aren’t afraid of no ghost broker.”

How To Report Ghost Brokers

If you are a victim of ghost broking or suspect someone of committing insurance fraud, it’s essential that you contact Action Fraud immediately. Associated with the police, Action Fraud aims to combat scams and support fraud victims.

You can report fraudsters via the Action Fraud website or call its cheatline at 0300 123 2040. If you’re scared to make a report yourself, we can assist. Just call us on 0800 0815 024, and we’ll do what’s necessary to offer our complete support to get this reported.