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The rise of ‘ghost brokers’

We all understand that having fleet insurance or a standard car insurance policy is vital if we are driving a vehicle on the roads, in order to make sure both we are covered in the event of an accident, or if others are injured or cars are damaged. These days, many of us decide to look for a car insurance policy online, often using car insurance brokers. However, it has been reported that unfortunately many motorists across the country are being the victim of fraudulent brokers. The problem has become so widespread they have been giving a name of their own: ‘Ghost Brokers’. In this guide, we are going to take a further look at exactly what they are, what are the implications of the rise of ghost brokers, as well as what you can do to protect yourself from them.

How big is the ghost broker problem?

According to the UK’s national reporting centre for cyber-crime and fraud, Action Fraud, there has been an influx of ghost brokers. In the past three years, it has revealed that it has received over 850 reports in a total of fake car insurance policies. In terms of the average amount lost by these victims as a result of car insurance fraud, it was estimated to be roughly £769.

Who is being targeted by ghost brokers?

Wondering who is the most vulnerable to being targeted by ghost brokers? According to Action Fraud, those who tend to be the victims of ghost brokers in the UK are men who are aged between 20 and 29.

Why are men under 30 the most susceptible to these ghost brokers? One of the main reasons cited by the fraud and cyber-crime reporting body, it is largely down to the fact men in this age category pay some of the highest premiums in the market, and therefore it is more likely that they will be tempted the apparently cheap deals these ghost brokers, hence them then getting ripped off.

What is a ghost broker?

Unsure as to what a ghost broker actually is? We will explain to you how they work as well as how you can take steps to avoid being the victim of a ghost broking scam.

To clarify, a ghost broker is when a company or individual poses as a legitimate car insurance broker, in order to sell to drivers unaware that these are forged or completely invalid car insurance policies. In fact, this is the very reason that the advertised car insurance policies by the ghost brokers are so inexpensive, and have been made to look that way in order to attract drivers in the first place.

The presence of ghost brokers can raise the costs for other motorists too.

Unfortunately, many ghost broker victims remain completely unaware that they do not have a valid car insurance policy in place, only until they try and claim after an accident or have been stopped by police, and are found to be driving without insurance.

The unfortunate thing about ghost brokers mis-selling insurance is that the impact has an effect on everyone who gets legitimate insurance as well. Why is that the case? It is because the presence of ghost brokers in the industry means that it ends up taking business aware from brokers that are genuinely in the insurance sector. You may be wondering how this may end up having an impact on you as a motorist. The way in which it can affect you is that the price of insurance becomes higher for all motorists as a result.

How does a ghost broker scam work?

Now that we have explained how ghost brokers work, let’s explain exactly the way in which a scam typically works.

  • The ghost brokers purchase car insurance policies form legitimate insurers, and are able to do so through buying false information. After this step has been carried out, then the ghost brokers doctor the policies prior to being sold on to unsuspecting customers.
  • Once these policies have been sold on, then the motorists correct information is used, whilst other parts of their details such as their age or address will then be falsified in order to lower the cost of premiums, creating fake policy documents in their behalf.
  • The completely fake policy documents are made to looks as if they are legitimate, then they are sold on to the customers, unaware that they are false
  • Ghost brokers also take out genuine car insurance policies, before quickly cancelling them entirely.  They claim the refund received as well as the victims continued payments.

How do I know if I am a ghost broker victim?

As we have previously mentioned, a large number of victims of ghost brokers do not know that they are a victim. In part, this is usually down to the fact that ‘official documentation’ is often given to the motorist when the policy is taken out, meaning that they believe the policy is completely legitimate.

There are different ways in which you can find out if you have been a victim. For example, you can use an official industry tool that is available online called the Motor Insurance Database. It enables you to check if your motor is registered and insured. All you need to do is provide your vehicle’s registration number and this enables you to check on the database to see if you are genuinely covered.

If I am a victim, could I be prosecuted?

Whilst police may well be understanding if you are the victim of a car insurance scam, it is important to keep in mind you will still be considered to be driving illegally. Unfortunately, that means you are still liable for any claims that are made.

What are the consequences of a fake policy?

Consequences can be extremely similar to having no policy at all, such as:

  • It could be seized by the police
  • You could receive a fixed penalty notice: this may be £300 in total
  • You will also be required to purchase valid insurance
  • You may have to pay for the cost of collecting your car from the pound (that is usually at least £150 in total _


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